    [Senate Hearing 105-374]
    [From the U.S. Government Publishing Office]

    39-858 cc

                                                         S. Hrg. 105-374

      DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES 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. 2107

      AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENT OF THE INTERIOR AND
    RELATED AGENCIES FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1998, AND FOR
                                 OTHER PURPOSES

                                   __________

                            Department of Agriculture
                              Department of Energy
                           Department of the Interior
                        National Endowment for the Arts
                     National Endowment for the Humanities
                           Nondepartmental witnesses
                    Department of Health and Human Services
                            Smithsonian Institution

                                   __________

             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
     39-858 cc                    WASHINGTON : 1998
    _______________________________________________________________________
                For sale by the U.S. Government Printing Office
    Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
                               ISBN 0-16-056253-8

                          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 Department of the Interior and Related Agencies

                       SLADE GORTON, Washington, Chairman
    TED STEVENS, Alaska                  ROBERT C. BYRD, West Virginia
    THAD COCHRAN, Mississippi            PATRICK J. LEAHY, Vermont
    PETE V. DOMENICI, New Mexico         DALE BUMPERS, Arkansas
    CONRAD BURNS, Montana                ERNEST F. HOLLINGS, South Carolina
    ROBERT F. BENNETT, Utah              HARRY REID, Nevada
    JUDD GREGG, New Hampshire            BYRON DORGAN, North Dakota
    BEN NIGHTHORSE CAMPBELL, Colorado    BARBARA BOXER, California
                               Professional Staff
                                  Bruce Evans
                                  Ginny James
                                 Anne McInerney
                                 Kevin Johnson

                                C O N T E N T S

                                  ----------

                            Thursday, March 13, 1997

                                                                       Page
    Department of Energy: Office of the Secretary....................     1

                            Thursday, April 10, 1997

    Department of the Interior: Bureau of Indian Affairs.............   111

                            Thursday, April 17, 1997

    Department of Agriculture: Forest Service........................   177

                            Thursday, April 24, 1997

    National Endowment for the Arts..................................   321
    National Endowment for the Humanities............................   371

                             Tuesday, May 20, 1997

    Department of the Interior: Office of the Secretary..............   409
    Nondepartmental witnesses........................................   673

      DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 1998

                                  ----------

                            THURSDAY, MARCH 13, 1997

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2:35 p.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Ben Nighthorse Campbell,
    presiding.
        Present: Senators Gorton, Domenici, Campbell, Byrd, and
    Dorgan.

                              DEPARTMENT OF ENERGY

                            Office of the Secretary

    STATEMENT OF FEDERICO F. PENA, SECRETARY OF ENERGY
    ACCOMPANIED BY:
            ROBERT S. KRIPOWICZ, PRINCIPAL DEPUTY ASSISTANT SECRETARY,
                OFFICE OF FOSSIL ENERGY
            JOSEPH J. ROMM, PRINCIPAL DEPUTY ASSISTANT SECRETARY, OFFICE OF
                ENERGY EFFICIENCY AND RENEWABLE ENERGY
            ELIZABETH E. SMEDLEY, ACTING CHIEF FINANCIAL OFFICER

                     opening statement of senator campbell

        Senator Campbell. The Appropriations Subcommittee on the
    Interior will be in order. Senator Gorton is detained on the
    floor for a little while longer, so I will go ahead and start
    the proceedings, and I certainly want to welcome my friend and
    colleague for so many years and the new Secretary to our
    hearing today. I personally am very pleased at that
    opportunity. Federico and I go way back. I know his leadership
    is invaluable in a time when we have so many important issues
    to deal with at the Department of Energy.
        Certainly this administration has sent him to the committee
    to justify the request of budget authority of $19 billion. That
    is an increase of almost $3 billion over fiscal year 1997. The
    budget says that a significant portion of that comes from, we
    are told, a change in the financing of construction projects. I
    am a little bit skeptical. Although this change seems sound
    from an accounting perspective, I do worry that it will also be
    used to mask some of the questionable spending changes as well.
        Although it is not the subject of your testimony today, Mr.
    Secretary, I want to point out that Rocky Flats, that you know
    very well and I do, too, is an example of items that really do
    concern me and all of us in Colorado because you are familiar
    with that.
        The administration proposes funding for well under what
    most people, both sides of the aisle, think is necessary to
    contain and manage the plutonium and restore the site in a
    meaningful timeframe, and if you care to venture into that in
    your testimony, I would also appreciate that.
        But before we start, I would like to defer to my colleague
    and a man that has been my mentor in many respects, Senator
    Byrd.
        Senator Byrd. Thank you, Senator. I have a good many
    questions, and if you have to leave soon, perhaps you better go
    ahead with your questions.
        Senator Campbell. I can wait a while. Would you just rather
    go to the Secretary's testimony before you ask questions?
        Senator Byrd. Yes; let us let him speak first. Thank you.
        Senator Campbell. Mr. Secretary, please proceed.

                    summary statement of hon. federico pena

        Secretary Pena. Thank you very much, Mr. Chairman, Senator
    Byrd and members of the subcommittee. Let me thank you for
    giving me the opportunity to testify on behalf of the
    Department of Energy's fiscal year 1998 budget. Having just
    been confirmed I think less than 24 hours ago, I am especially
    pleased to be here.
        Let me introduce the two gentlemen who are with me today. I
    think they are well known to you already. To my left or to your
    right is Robert Kripowicz, who is the Principal Deputy
    Assistant Secretary for Fossil Energy. In the event that there
    are some highly technical questions, Mr. Kripowicz will be able
    to assist me in that.
        To my right or to your left is Dr. Joseph Romm who is the
    Principal Deputy Assistant Secretary for Energy Efficiency. I
    want to thank them very much for their hard work in preparing
    me in a relatively short period of time to be here this
    afternoon.
        Mr. Chairman, it is appropriate that my first hearing be
    before this subcommittee, which has been such a crucial partner
    in the delivery of the Department's energy mission. Although
    the subcommittee is directly concerned with a portion of the
    Department's missions, this subcommittee is a key partner in
    the objective that we list at the very top, and that is the
    enhancement of our national energy security and the development
    and deployment of clean energy.
        Each day Americans depend on the benefits of energy,
    usually without considering the role that it plays in our
    quality of life, but as this subcommittee well knows, when
    energy supplies are disrupted, every American feels it. There
    have been three major oil disruptions in the past 23 years,
    each causing substantial domestic and international turmoil.
        In the next 15 years the United States net oil imports will
    grow to 60 percent of domestic consumption. Persian Gulf oil-
    producing nations will increase their oil exports to surpass
    their peak of 67 percent of global oil exports in the embargo
    year of 1974, and this is, frankly, unacceptable.
        The budget that we present to you advances national energy
    objectives in two broad ways. First, it emphasizes energy
    supply solutions through increased domestic energy production,
    expanded use of natural gas, diversification of oil supply
    options, development of alternative transportation fuels, and
    maintenance of the strategic petroleum reserve to ensure
    economic stability in the event oil supply disruption should
    occur in the future.
        Second, it emphasizes energy use solutions promoting the
    increased efficiency of energy used in all sectors of the
    economy and enhanced competitiveness of the electric utility
    industry and other sectors of the energy industry.
        For energy efficiency programs we are requesting $707
    million, a $137.9 million increase or 24 percent above the
    fiscal year 1997 comparable appropriations.
        Why should we request such a large increase? We believe it
    is a smart investment. Improved efficiency is not only
    achievable, it is essential if we are to avoid serious risk in
    the future. Moreover, it is a proven way to reduce the demand
    for energy while enhancing our standard of living and our
    environmental quality.
        For example, EIA's 1997 annual energy outlook forecasts
    that in 2015 the average home will be 4 percent larger and will
    rely more on electricity-based technologies. Annual per capita
    personal highway and air travel, something that I'm familiar
    with from my former position, are expected to be 12 and 59
    percent higher, respectively.
        Despite this growth, the forecast report indicates that
    energy intensity per capita will remain essentially static. The
    reason--EIA forecasts that improvements in energy efficiency
    will provide higher levels of service without significant
    increases in energy use per capita. So energy efficiency
    products and improvements are built into these forecasts to at
    least keep per capita energy use stable for the next 10 or 15
    years.
        So our budget request is part of this energy efficiency
    strategy to deliver and design cars of the future, improve
    efficiency in energy-intensive industries, develop energy
    efficient buildings in communities for the 21st century and
    increase the use of proven efficiency measures by consumers in
    Federal, State, and local governments as well as low-income
    households.
        This request also recognizes that nearly 85 percent of the
    Nation's energy is supplied by fossil fuels and that this
    percentage is expected to increase to 88 percent by the year
    2015.
        This budget includes $346 million for fossil energy
    research and development. This is a 5-percent reduction from
    the fiscal year 1997 level because many supported gas and coal
    fuel power system projects are entering their final phase of
    development. At this level, the Department will continue its
    support for technologies that develop the clean, highly
    efficient powerplant for the 21st century, boost the Nation's
    production of natural gas and oil, and provide a new option to
    supplement our country's liquid fuels.
        The Department does not propose to sell any oil from the
    strategic petroleum reserve to finance operations for this
    fiscal year. The Department proposes to return approximately
    $153 million of Clean Coal Technology Program funds to the
    Treasury in fiscal year 1998 and defer $133 million that will
    not be required until fiscal year 1999.
        The proposed rescission does not impact, and I want to
    emphasize that, does not impact ongoing projects and returns to
    the Treasury, only funding that becomes available from canceled
    or restructured projects. We believe that this proposal honors
    our commitment to fiscal discipline without jeopardizing the
    already significant accomplishments of this program.
        Mr. Chairman and members, the Clean Coal Technology Program
    began because of the foresight of this subcommittee. It is an
    excellent example of what is possible with Federal research and
    development assistance. The General Accounting Office, for
    example, cites this program as a model of public-private
    partnership.
        One excellent success story concerns the development of low
    NOx burners. This technology now provides utility
    powerplants with a way to reduce nitrogen oxide emissions,
    which contributed smog and ozone buildup to a level that is 10
    times lower than would have been available without the Federal
    investment.
        Today almost 25 percent of coal-fired capacity is now using
    these cleaner burners. Sales have exceeded $750 million and
    will approach about $4 billion by the year 2000.
        Again, in part due to this subcommittee's foresight, the
    program includes a recoupment provision that requires that the
    Government be paid back for its investment, and that the
    technologies are a commercial success, and we're beginning to
    see some of that repayment now in the early years. This
    provision is now beginning to see those repayments,
    approximately $400,000, to the Government.
        Mr. Chairman and members, let me conclude my remarks with
    those very brief statements. Mr. Chairman, you asked me to make
    some comments about Rocky Flats, and there were some concerns
    about the proposed increase in the overall budget which
    addresses a new approach that we're using to try to facilitate
    the upfront funding of major programs for the Department in a
    way which I think will save us money in the long term.

                               prepared statement

        I would be very pleased to respond to both those issues in
    my question-and-answer period, and of course respond to other
    questions that you and other members may have. Thank you very
    much for your courtesies.
        [The statement follows:]
                    Prepared Statement of Hon. Federico Pena
        Mr. Chairman and members of the Subcommittee, I am pleased to
    appear before you today to discuss the fiscal year 1998 budget request
    for the Department of Energy.
        The President, in his State of the Union message to the Congress,
    spoke about our nation's responsibility to keep its commitments and to
    provide for the future. An important commitment he spoke about was
    fiscal discipline, the duty we have to future generations to balance
    the budget. He also spoke of our duty to future generations to maintain
    and refresh our nation's capacity for scientific and technological
    innovation and thereby shape the future.
        These themes, keeping commitments and providing for the future, are
    at the heart of the Department's missions. Our sense of obligation to
    continue investments that ensure the nation's security,
    competitiveness, and improved environmental quality for generations to
    come drives our program objectives. Science, technology, research, and
    development are the common threads running throughout the Department's
    varied missions, providing the tools with which to shape our energy
    future.
                           priorities for the future
        The Department of Energy has four key priorities:
        (1) Enhancing our energy security by improving the energy
    efficiency of our economy and by developing and deploying clean and
    affordable energy supplies;
        (2) Ensuring a safe and reliable nuclear weapons stockpile and
    reducing the global nuclear danger;
        (3) Cleaning up former nuclear weapons sites and finding a more
    effective and timely path forward for disposing of nuclear waste; and
        (4) Leveraging science and technology to advance fundamental
    knowledge and our country's economic competitiveness with a stronger
    partnership with the private sector.
        All of these needs present unparalleled opportunities and daunting
    challenges that will greatly affect the future of our nation and indeed
    the world. However, first among them is energy.
        Each day, Americans depend on the benefits of energy, usually
    without considering the role it plays in our quality of life. But there
    have been three major oil disruptions in the past 23 years, each
    causing substantial domestic and international turmoil. In the next 15
    years, U.S. net oil imports will grow to 60 percent of domestic
    consumption, and Persian Gulf oil producing nations will increase their
    oil exports to surpass their peak of 67 percent of global oil exports
    in the embargo year of 1974. The potential of this situation poses
    serious risks for America's future.
                            a strong energy strategy
        We must have a credible energy strategy that provides for our
    energy security and meets our commitment to be responsible stewards of
    the environment. Our energy strategy must, at a minimum:
      --Increase domestic energy production through smarter regulation and
            technological advances to improve production economics and
            reduce environmental impacts of both oil and natural gas
            development;
      --Expand the use of natural gas;
      --Diversify our oil supply options in areas such as the Western
            Hemisphere, Central Asia and the Caspian Sea;
      --Reduce U.S. dependence on insecure sources of foreign oil by making
            us more efficient in our use of all energy;
      --Develop clean, renewable energy supplies, alternative
            transportation fuels, and clean coal technology;
      --Maintain our strategic petroleum reserve at levels which meet our
            international responsibilities and ensure stability in the
            event of supply disruptions;
      --Maintain the safety of nuclear power reactors;
      --Address the challenge of global climate change; and
      --Enhance the competitiveness of the electric utility industry and
            other sectors of the energy industry.
        The President's energy policies set out to accomplish these
    objectives in partnership with industry. These innovative
    partnerships feature: collaboration with industry to identify
    priorities; cost-sharing of projects; and federal support used
    as a catalyst to develop innovative research and development
    (R&D). These partnerships provide the edge that will help
    achieve our national energy goals.

             partnering with industry to achieve energy objectives

        Recently, government investment in research and development
    and the appropriate federal role have been the subject of much
    debate. This budget request supports a strong portfolio of
    energy research and development which builds on prior year
    commitments to cutting-edge technologies. Fiscal year 1998 is a
    key year in which to steady our research and development
    investments because, after ten years of public-private
    collaboration, dividends are coming to the American people. For
    example, it is estimated that within two to three years, we
    will have successfully developed a ``next generation'' gas
    turbine that will surpass any competing turbine offered outside
    the U.S. Advanced gas turbines will provide the capability of
    generating electric power at efficiencies of over 60 percent,
    and with NOx emissions so low as to allow them to be
    sited in environmentally restricted areas such as California.
        We also will have developed an advanced fuel cell that will
    significantly boost the efficiency and environmental
    performance of twenty-first century natural gas and coal-fired
    power plants. When commercially available, these technologies
    will bring lower electricity costs, more U.S. jobs in the
    energy industry, and a cleaner environment with lower emissions
    for all Americans. In the case of both of these technologies,
    it is federal research and development support which provides
    the difference needed to develop the ``state of the art'' in
    terms of efficiency and environmental quality.
        Similarly, the Clean Coal Technology program was begun in
    1985 in recognition of the national interest in technologies
    which promote the environmentally sensitive use of the nation's
    vast, and relatively inexpensive, coal reserves. Out of 40
    projects, the Clean Coal Technology Program has successfully
    completed its involvement in 20 projects, and the remainder are
    in operation, construction or design phases. The General
    Accounting Office now points to the Clean Coal Technology
    program as a model of public-private partnership. The program
    has resulted in commercial development of 14 technologies, and
    the non-federal cost share now averages 66 percent per project.
    Nevertheless, because there are balances available from
    previously canceled or restructured projects, the Department
    proposes to rescind $153 million in fiscal year 1998, and to
    defer an additional $133 million in balances that will not be
    required until fiscal year 1999.
        In fiscal year 1998 the Clean Coal Technology program will
    produce the following important results:
      --Operation of the nation's first three commercial scale coal
            gasification combined cycle power plants--at Tampa, FL; Terre
            Haute, IN; and Reno, NV--each facility achieving 95 percent or
            greater sulfur removal, and 90 percent nitrogen oxide
            reductions;
      --Startup of a commercial-scale advanced combustor power plant at
            Healy, AK, which will reduce sulfur dioxide by 90 percent or
            more, and nitrogen oxides by 70 percent;
      --Completion of tests at an advanced coal processing facility in
            Colstrip, MT, producing clean fuel with sulfur content as low
            as 0.3 percent and heating value up to 12,000 Btus/lb.
        Research and development is critical if the U.S. is to
    maintain its technological edge. The question is: how should
    our national research and development investment be shared
    between the public and private sectors? U.S. private sector
    spending for energy research and development is down more than
    30 percent since the early 1980s. One reason is that recent
    changes in domestic energy markets, particularly deregulation
    of the natural gas industry and the move toward greater
    competition in the electric power industry, have encouraged
    general corporate cost-cutting but discouraged research and
    development, especially if the payoff is beyond one to three
    years. At the same time, the makeup of the U.S. oil industry is
    shifting from large, multi-national producers to smaller
    companies (who drill 85 percent of all new wells) with limited
    research and development capability and access to advanced
    technologies. In addition, expectations of continued low oil
    prices may be discouraging private research and development
    that could lower the cost of new sources of fuels.
        When the result will clearly benefit the public at large--
    for example through cleaner air, more affordable energy, or
    greater energy security--government involvement is justified
    and can make the significant difference. This is especially
    true when the research and development is beyond the private
    sector's economic capability, or interest. Some research and
    development has no current ``market driver.'' Some research and
    development may be vital in the 21st century, but holds no
    economic incentive today for the private sector. For example,
    few companies can today justify an aggressive research program
    aimed at preventing the generation of the greenhouse gas carbon
    dioxide, much less investing in a means of capturing and
    disposing of it. There is no immediate ``bottom line'' payoff.
    If the public benefits are important--but research is too
    fundamental to offer commercial potential, or the advanced
    technologies pose too great a technical risk or are outside the
    time frame that would justify industry's investment on its
    own--then federal support is justified, and sometimes critical
    to secure public goals and benefits.
        The federal government has unique expertise. Our national
    laboratories have capabilities developed for defense purposes
    that can be adapted through research and development to improve
    domestic energy production. No private sector firm possesses
    these capabilities. With global markets for new energy
    technologies offering lucrative opportunities, other countries
    such as Japan and Germany are using government-industry
    research and development partnerships to develop innovations
    that will compete with U.S. technologies.
        As Americans we have a duty to discipline government
    spending and eliminate the deficit in consideration of future
    generations. However, reducing federal support of energy
    research and development would place an even higher burden on
    future generations. Failing to sufficiently invest in energy
    technology development today sends a signal that we are not
    willing to work for the future. Affordable heating, cooling,
    transportation and cleaner supplies of energy will depend on
    continued innovation that keeps pace with future energy
    challenges. Industry is a critical partner in this effort.

        the fiscal year 1998 budget--ensuring secure supplies of clean,
                               affordable energy

        The Department's fiscal year 1998 budget request ties
    program funding requirements to specific outcomes. This budget
    was formulated to accomplish strategic objectives which support
    our national energy goals.

                               energy efficiency

        According to the 1997 Annual Energy Outlook from the Energy
    Information Administration (EIA), the average home in 2015 is
    expected to be 4 percent larger and to rely more heavily on
    electricity-based technologies. Annual highway travel and air
    travel per capita in 2015 are expected to be 12 and 76 percent
    higher, respectively, than their current levels. Despite this
    expected growth in demand, the EIA report expects that
    ``primary energy intensity on a per capita basis will remain
    essentially static through 2015.'' The Outlook attributes this
    to anticipated improvements in energy efficiency which will
    ``make it possible to provide higher levels of service without
    significant increases in energy use per capita''.
        These projections show the importance of energy efficiency
    technologies. However, these projected gains in efficiency will
    not be enough. The same forecast projected increased foreign
    oil reliance which could pose a severe risk to our energy and
    economic security in the coming years. In consideration of our
    future, we cannot afford to back away from the investment in
    energy efficiency technologies.
        Reflecting the Administration's commitment to energy
    efficiency technologies as a key element of the national energy
    strategy, the Department's total fiscal year 1998 request for
    Energy Efficiency programs is $707.7 million, a $137.9 million
    increase or 24 percent above the fiscal year 1997 comparable
    appropriation. We recognize, of course, that this is a bold
    initiative that may be difficult to achieve in these
    constrained fiscal times. But we believe the program is well
    conceived and essential in order to provide for a more secure
    and environmentally responsible energy future.
        The Office of Energy Efficiency and Renewable Energy
    programs is organized to address the challenges facing the
    major energy use sectors of the national economy--industry,
    buildings, transportation, and utilities. The request for
    Industry sector efficiency programs is $139.6 million,
    Buildings $302.4 million, and Transportation $203.2 million. In
    addition, to directly address the energy efficiency of one of
    the largest consumers of energy, the federal government, $31.1
    million is requested for the Federal Energy Management Program.
        The Department's fiscal year 1998 request continues key
    initiatives, started at the beginning of the Clinton
    Administration, designed to accelerate deployment of existing
    technologies and emphasize research and development
    technologies for the future. The Department has charted a
    course to provide energy solutions into the next century. We
    have outlined major goals and developed this budget request
    with the aim of achieving the following key objectives.
        Designing and delivering cars of the future.--The
    Department of Energy leads the design team of the government-
    wide Partnership for a New Generation of Vehicles (PNGV), a
    multi-agency/industry collaborative initiative led by the
    Department of Commerce. The goal of PNGV is to develop an 80
    mile-per-gallon family car and demonstrate a prototype car for
    the future by 2004. In fiscal year 1998 the Department proposes
    an increase of $22.1 million for PNGV programs, for a total
    fiscal year 1998 request of $128.3 million for PNGV related
    research and development in the Energy Efficiency program.
        The total fiscal year 1998 request for Transportation
    programs, including PNGV related activities, is $203.2 million.
    An increase of $6.2 million is proposed for Technology
    Deployment activities which promote the use of alternative
    fuels through the voluntary Clean Cities programs and other
    activities. The $2 million increase in Heavy Vehicle Systems
    research and development will support increased efficiencies in
    advanced diesel engines and activities to deploy existing
    technologies directed at heavy vehicles such as buses, and
    trucks. Decreases of $2.9 million are proposed in Automotive
    Materials and $3.5 million for Heavy Vehicle Alternative Fuels
    research and development.
        Improving efficiency in energy intensive industries.--The
    Department is working closely with the most energy-intensive
    industries to focus cooperative research and improve U.S.
    competitiveness. Working together with industry to encourage
    the development and application of energy efficiency and
    pollution prevention technologies, our goal is to help achieve
    over $10 billion of industry energy cost savings by the year
    2010. The Department's fiscal year 1998 request emphasizes the
    Industries of the Future public-private partnership program and
    proposes a $9.4 million increase for a fiscal year 1998 program
    total of $55.7 million.
        In addition, the Department is requesting increases to
    support other cost-effective industry pollution prevention
    partnership programs in fiscal year 1998: for Motor Challenge,
    $2.1 million, to continue collaboration with the private sector
    to improve the efficiency of industrial motors; for Climate
    Wise, $2.8 million, to continue efforts to voluntarily reduce
    global warming emissions from industrial energy users; for
    NICE3 partnerships, $6.2 million, to continue the highly
    leveraged deployment of innovative energy efficiency and
    pollution prevention technologies in partnership with State,
    local and other federal agency partners; and Industrial
    Assessment Centers, $1.1 million, to enhance technical support
    available to industries seeking to audit the efficiency of
    their facilities. Proposed for continuation at the fiscal year
    1997 comparable level are: Advanced Turbine Systems, to
    continue development of highly energy efficient turbine engines
    for future use in industrial settings, and Advanced Materials
    R&D, to develop highly efficient industrial materials, such as
    ceramics, which are able to withstand greater heat and stress
    demands, thereby, operating more efficiently with lower energy
    requirements.
        Developing buildings and communities for the 21st
    century.--By working with the building industry, community
    leaders and customers, the program's goal is to develop and
    implement a plan for buildings and communities of the future.
    The typical American family of four spends $2,200 each year on
    energy. The Energy Efficiency program is targeting residential
    energy consumption with the objectives of cutting builder costs
    by 10 percent, consumer costs by 20 percent, and pollution by
    30 percent, saving 3 quads of energy and reducing environmental
    emissions by 60 Million Metric Tons Carbon Equivalent by the
    year 2010.
        Public-private deployment partnerships for the buildings
    sector which are designed to increase energy efficiency are
    proposed to increase by $10 million in fiscal year 1998. One
    recent example of the benefits of this partnership approach is
    the Rebuild America program where $500,000 in Federal funds was
    used to attract nearly $33 million in State, local and private
    funds to implement energy efficiency technologies in commercial
    and government buildings at the State and local levels. The $10
    million increase in building sector programs will support:
    Rebuild America, as well as promote efficient and affordable
    residential and industrialized housing; Energy Star Appliances,
    a voluntary incentive program that promotes market demand for
    energy efficient appliances; and enhanced Building Codes and
    Standards activities with the States. Also supported is
    research and development funding for advanced building
    equipment and materials, including windows and lighting.
        Transferring proven energy efficiency measures to
    consumers.--By applying energy efficiency measures to existing
    buildings and operations, our goal is to increase efficiency
    and reduce government energy consumption 30 percent by 2005
    from a 1985 baseline. Through aggressive deployment of
    technologies available today, we propose to reduce annual
    energy consumption by one quad of energy by the turn of the
    century. To move toward these targets we propose the following
    program levels in fiscal year 1998:
        For the Federal Energy Management Program $31.1 million is
    requested. This is an $11.3 million increase to let the program
    bring a series of new energy technology options to federal
    facilities managers and support the growth of alternate, non-
    Federal financing options to implement energy cost savings such
    as up-front capital financing from energy utilities which is to
    be repaid from the agencies' monthly energy consumption
    savings.
        A $41.3 million increase is proposed for grants. Federal
    support through these grants is cost-effective as the money
    often leverages investments by State, local and private sources
    to deploy energy related technologies. State Grants which
    support innovative energy efficiency programs of the State
    Energy Offices and help to generate $19 million in non-Federal
    investments for every appropriated dollar, are proposed to
    increase $8 million to a total of $37 million in fiscal year
    1998. Also proposed is a $33.3 million increase for the
    Weatherization Assistance Program for a fiscal year 1998 total
    of $154.1 million, to deploy existing energy efficiency
    technologies in households that cannot afford the investment
    without the program. This level of funding will weatherize
    close to 78,000 households in fiscal year 1998. Level funding
    between fiscal year 1997 and fiscal year 1998 of $1.6 million
    is requested for the Municipal Energy Management Program which
    works with urban communities, and leverages four non-Federal
    dollars to every federal dollar.

                     fossil energy research and development

        The budget request for the Fossil Energy program recognizes
    that nearly 85 percent of the nation's energy is currently
    supplied by coal, oil and natural gas. With the use of these
    fuels projected by the Energy Information Administration to
    increase to more than 88 percent by 2015, the Department's
    fossil energy program focuses its funding primarily on ways to
    enhance our domestic energy security and ensure continued
    environmental protection.
        The Fossil Energy fiscal year 1998 budget addresses these
    energy concerns. As a near-term response to a potential oil
    supply disruption, the fiscal year 1998 budget maintains the
    strategic petroleum reserve at 563 million barrels, respecting
    our international responsibilities and providing a powerful
    tool to blunt oil shortages and price fluctuations. For the
    longer-term, the budget continues research and development into
    new oil exploration, production and processing technologies
    that can lower costs and boost domestic oil supplies,
    particularly from properties owned by smaller independent
    producers. The budget also maintains research into alternatives
    to conventional petroleum, including technologies to produce
    high-quality liquid fuels from natural gas and coal.
        The Fossil Energy Research and Development program is
    committed to new natural gas-and coal-fired electric power
    technologies that can produce significantly less carbon dioxide
    and acid rain emissions than current technology, while keeping
    electricity costs affordable.
        The fiscal year 1998 budget moves into the final phases of
    development for several advanced electric power technologies,
    including low emission boilers, advanced generation fuel cells
    and ultra-high efficiency gas turbines, culminating a decade or
    more and several hundred million dollars of prior public and
    private sector investment. DOE's support for these 21st century
    technologies is becoming increasingly important as the U.S.
    industry, confronted by the uncertainties of restructuring,
    continues to cut back financing of longer-range, higher-risk
    R&D, while at the same time demand for new and cleaner sources
    of electricity rapidly increases throughout much of the world.
        The fiscal year 1998 budget request also recognizes that
    U.S. demand for clean-burning natural gas could increase
    significantly in the next decade, particularly in the electric
    power generation market. The proposed budget would maintain a
    major effort to ensure that adequate and affordable gas
    supplies can continue to be produced to meet this rising
    demand. New exploration and production technologies, such as
    innovative imaging and improved fracturing techniques, will
    help the U.S. expand its natural gas production by several
    trillion cubic feet over the next 5-10 years, particularly from
    difficult, low-permeability formations that are currently
    beyond the capabilities of today's technology.
        The fiscal year 1998 request for Fossil Energy Research and
    Development is $346.4 million, which is a five percent
    reduction from the fiscal year 1997 level. This is because many
    of the Department's supported gas and coal-fueled power systems
    are entering their final phase of development this fiscal year
    and will be available to meet market demand close to the turn
    of the century. We plan to redirect our program to focus on
    advanced, high payoff research and development. The proposed
    budget retains a commitment to technology advancement and, in
    most cases, is highly leveraged by joint partnerships with the
    private sector. This budget was developed to address the
    following strategic objectives:
        Develop the Clean, High Efficiency Power Plant for the 21st
    Century.--The goal is to provide the nation's electric power
    industry, between 2000 and 2010, with a new generation of
    natural gas and coal power technologies that progressively
    lower CO2 emissions 30 to 50 percent, reduce
    SO2 and NOx emissions to as little as 1/
    10th the levels mandated by current federal standards, and
    produce electricity at costs 10 to 20 percent below today's
    conventional plants.
        This request includes $66.3 million for Advanced Clean/
    Efficient Power Systems under the Coal program. This funding
    will focus on developing progressively higher efficiency
    systems that emit significantly less CO2 than
    current systems, and exceed environmental compliance
    requirements through processes that prevent, rather than
    control, pollutant emissions. In fiscal year 1998, $5.5 million
    is proposed for the Advanced Pulverized Coal-Fired Power Plant
    program, which will stretch out the Department's schedule, and
    require the down selection of contractors to a lead developer.
        Also included is $31.4 million for continuation of the
    Advanced Turbine Systems Program which also will stretch out
    the Department's schedule and require selection of a lead
    developer.
        Boost the Nation's Production of Natural Gas and Oil.--
    Through the development and application of advanced energy
    technologies, the Department's goal is to improve the
    capability of the nation's petroleum industry to produce
    additional supplies of secure, clean domestic natural gas and
    oil, helping to increase U.S. oil production by an average of
    0.5 million barrels per day and gas production by 3.7 trillion
    cubic feet per year by 2010.
        The budget includes $25.3 million for the supply portion of
    the gas budget to continue to focus on advanced drilling;
    completion, stimulation, and reservoir characterization
    technology and resource assessment methodology; storage
    technologies and engineering techniques; upgrading of low-BTU
    gas; conversion of natural gas to clean liquid transportation
    fuels and feedstocks; and environmental research and analysis.
        The request for petroleum activities is $52.2 million, a 14
    percent increase from the fiscal year 1997 level of $45.9
    million. This increase will support Exploration and Production
    Supporting and Environmental Research to achieve improvements
    in locating, processing and delivery of oil and gas resources
    in a more environmentally sensitive manner. The Supporting
    Research program includes the development of advanced
    technologies for exploration, drilling, reservoir
    characterization, and extraction.
        Provide a New Option to Supplement the Nation's Liquid
    Fuels.--The goal is to provide the nation, by 2005, with an
    alternative source of liquid fuels, costing $25 per barrel or
    less, that can be produced from coal and solid wastes.
        This request includes $15.8 million for the Advanced Clean
    Fuels program which demonstrates advanced concepts for the
    clean production of coal-based transportation fuels, chemicals
    and other high value products that can compete with petroleum
    products.

                          strategic petroleum reserve

        Maintenance of the Strategic Petroleum Reserve is a key
    component of our national energy security policy. No sale of
    oil is proposed for this fiscal year. At the proposed level of
    $209 million, the program will maintain operational readiness
    and facilities maintenance, continue the Drawdown Readiness
    Program, conduct annual exercises, and continue the
    environment, safety and health program. The Department will
    continue its plan to degasify hot and gassy oil in the
    Strategic Petroleum Reserve. As is, this oil is currently
    unusable and presents potential safety concerns. In fiscal year
    1998, the program will degasify 39 million barrels of gassy oil
    at Big Hill, Texas, thereby restoring capacity to the ready
    reserves. In addition, efforts to stabilize Weeks Island will
    continue as will the Life Extension Program, which will be
    completed in fiscal year 2000.

                             clean coal technology

        In fiscal year 1998, the Department continues current
    policy and does not propose to start any new domestic Clean
    Coal Technology projects. Funds available from canceled and
    restructured projects enable the Department to propose a
    rescission of $153 million in fiscal year 1998. In addition,
    the Department proposes to defer the use of $133 million which
    otherwise would have been available until fiscal year 1999. The
    Department has signed cost-sharing commitments for all projects
    in the program, and balances available from previous
    restructuring and cancellation enable a portion of the
    previously appropriated funds to be returned to the Treasury
    without endangering the success of this program.

                naval petroleum reserves and oil shale reserves

        The fiscal year 1998 budget request for the Naval Petroleum
    and Oil Shale Reserves of $117 million provides for continued
    operation of the reserves until their sale and asset transfer
    is completed. The National Defense Authorization Act of fiscal
    year 1996, Public Law 104-106, requires the sale of Elk Hills,
    Reserve No. 1, located in Bakersfield, California no later than
    February 10, 1998. Based on this schedule, the budget request
    provides funding for seven and one-half months of operations
    for NPR-1, including a transition period and full year funding
    for NPR-3 and the Naval Oil Shale Reserves. Available current
    and prior year funds will be invested in the current year to
    conduct sale activities.
        The Department is on track for completion of the Elk Hills
    sale as set forth by statute. Sufficient safeguards have been
    put into place to ensure that Elk Hills will not be sold unless
    the Government receives maximum value for the field. The
    statute requires the Department to hire five experts in the
    valuation of oil and gas fields to assess the value of Elk
    Hills under continued Government ownership. The Department may
    not sell Elk Hills for an amount less than the higher of the
    average of the five assessments, or the average of the middle
    three assessments (excluding the high and low assessments).

                       energy information administration

        The fiscal year 1998 request for the EIA totals $67.8
    million, comprised of $62.8 million in direct appropriations
    and $5 million in activities coordinated through the Office of
    Energy Efficiency and Renewable Energy. This level of funding
    will continue to support the data and analysis requirements of
    EIA's wide variety of customers with a streamlined portfolio of
    products in comparison to prior years.
        In fiscal year 1998, EIA estimates that it will produce
    approximately 240 reports and analyses covering a wide variety
    of energy issues. The office anticipates the need to address
    approximately 300,000 inquiries and requests for energy
    information in fiscal year 1998 alone. The most significant
    change to EIA's core activities in the fiscal year 1998 request
    is the proposed addition of analysis and data collection in
    response to electric industry restructuring. Several changes
    are also proposed which will significantly alter the depth and
    scope of EIA's traditional programs by fiscal year 1998. These
    include: elimination or scale back of several publications;
    elimination or reduced frequency of data collections;
    elimination of the in-house mainframe computer; and release of
    the Residential Energy Consumption Survey on a quadrennial,
    rather than triennial basis. The funding proposed as an
    appropriation from the Office of Energy Efficiency and
    Renewable Energy will support the core EIA data and modeling
    activities needed to support energy efficiency program needs
    and measure program results.

                         office of hearings and appeals

        The Department requests level funding of $2.7 million to
    continue to process and resolve applications for refund
    requests and other petroleum overcharge activities required
    under the Emergency Petroleum Allocation Act of 1973. The
    request will support personnel compensation and benefits,
    travel expenses, and support services within the Department's
    Working Capital Fund for rent, supplies, printing, and
    information technology.

                              a balanced portfolio

        The Department's fiscal year 1998 budget request represents
    a balanced portfolio of investments in energy technologies
    required for the nation's advancement into the 21st century.
    This budget request stays on course to ensure that America's
    future includes sufficient supplies of energy needed to fuel a
    growing economy without sacrificing environmental quality. Now
    is the time to maintain the government's investment in energy
    technologies and finally deliver the benefits of these long-
    term efforts to the American people. These investments are
    critical, now more than ever.
                                    ------

                  Biographical Sketch of Hon. Federico F. Pena

        Federico F. Pena, the 12th U.S. Secretary of
    Transportation, compiled an outstanding record of increasing
    the global competitiveness of the transportation industry,
    improving the safety of travel, and streamlining the Department
    of Transportation, while investing more in America's
    infrastructure than any Secretary in history.
        In the area of global competitiveness, the transportation
    sector is the healthiest it has been in decades; 500,000 of the
    10 million jobs created since President Clinton took office are
    in transportation services.
        Secretary Pena helped revitalize the U.S. airline industry
    and signed aviation agreements with 40 nations opening
    lucrative markets for American airlines and cargo carriers and
    promoted easier travel for Americans and tourists to the U.S.
    At the President's request, he conducted commercial diplomacy
    efforts around the world, and he was credited with helping
    American businesses sell billions of dollars in exports to Asia
    and the Middle East. He also orchestrated for President Clinton
    the revitalization of shipbuilding, leading to the sale of the
    first American-made large vessels to foreign countries in 38
    years.
        He was responsible for bringing airline consumers the same
    level of safety for all flights--from jumbo jets to a 10-
    seater, and he spurred the truck, bus, and rail industries to
    promote safety.
        As for streamlining the Department of Transportation,
    Secretary Pena downsized the work force by 11,000 positions,
    while upsizing investments in America's infrastructure by 10
    percent. He rewrote the rule book on financing highway
    projects, which encouraged private financing and sped up
    construction of more than 75 projects by 2 or 3 years at no
    cost to the Federal taxpayer.
        He also led the way for cities to use new technologies to
    manage traffic congestion and set a national goal to cut
    American's commute time by 15 percent in a decade; and he
    emphasized consumer protection, by improving an auto safety
    hotline and ensuring proper airline ticketing and advertising
    practices.
        As the Service Secretary for the U.S. Coast Guard, he
    provided leadership for the nation's fifth armed service to
    save lives and protect our environment. On his watch, the Coast
    Guard rescued 56,000 Haitian and Cuban boat people, and fought
    devastating floods and hurricanes.
        From 1983-91, he was Mayor of Denver leading an urban and
    economic renaissance, reversing Denver's mid-1980's decline
    through a series of bold initiatives. Most notably, he won
    approval for the construction of one of the largest and most
    technologically advanced airports in the world, Denver
    International, which, as Secretary of Transportation, he
    dedicated in February 1995.
        Pena also has served as a Colorado legislator and a civil
    rights lawyer.
        He has received many honors. In 1995, he was named Father
    of the Year by the National Father's Day Committee. In 1994,
    the American Subcontractors Association of Colorado named him
    Man of the Year, and he received the Senor Internacional Award
    from LULAC Council 12, the American Heritage Award from the
    Mountain State Anti-Defamation League, the National Leadership
    and Service Award from the Travelers Aid Society of Washington,
    and the Person of the Year Award from the American Association
    of Port Authorities.
        Secretary Pena did his undergraduate work at the University
    of Texas, where he also received his law degree. Florida
    International University awarded him an Honorary Doctor of
    Public Service degree in 1995.
        Born in Laredo, Texas, in 1947, Secretary Pena is the third
    of six children of a cotton broker. He and his wife, world-
    class marathon runner and attorney Ellen Hart Pena, live with
    their two children in Alexandria, VA.
                                    ------

                   Biographical Sketch of Robert S. Kripowicz

        Robert S. Kripowicz was appointed U.S. DOE Principal Deputy
    Assistant Secretary for Fossil Energy on March 4, 1996. As
    Principal Deputy Assistant Secretary he is assisting the
    Assistant Secretary for Fossil Energy with the internal
    development of a working budget and the external negotiations
    with appropriators in Congress. Mr. Kripowicz will also help
    the Assistant Secretary with strategic planning. One of his
    main duties will be to build a unified focus for the Fossil
    Energy coal, oil and natural gas programs for the long term.
        Mr. Kripowicz previously was appointed Acting Deputy
    Assistant Secretary for House Liaison in April 1995. As House
    Liaison he was responsible for coordinating all interactions
    with members and staff of the House of Representatives on
    departmental programs. He was also responsible for establishing
    legislative and budget strategies and for coordination of
    hearings, floor, and conference action on all legislation in
    the House affecting the Department.
        Previously, he was appointed Deputy Assistant Secretary for
    Building Technologies in January 1995. The Office of Building
    Technologies, within the Office of Energy Efficiency and
    Renewable Energy, is responsible for Department of Energy's
    (DOE) programs to increase the energy efficiency of the
    nations's residential and commercial heating and cooling
    systems; solar systems; high efficiency lighting, windows, and
    equipment; and advanced building materials.
        Prior to joining DOE, Mr. Kripowicz was on the staff of the
    House Interior and Related Agencies Subcommittee of the
    Committee on Appropriations. He was responsible for
    appropriations for DOE programs in energy efficiency, fossil
    energy, clean coal technology, and Strategic and Naval
    Petroleum Reserve activities, as well as Interior Department
    energy, scientific, and land management programs. He also
    served as Staff Director of the House Energy Subcommittee of
    the Committee on Science and Technology, responsible for energy
    efficiency, renewables, fossil energy, high energy and nuclear
    physics, and basic science programs at DOE.
        Mr. Kripowicz began his government career in the early
    1970's in program analysis and budgeting activities at the
    Atomic Energy and Nuclear Energy Commissions and the Energy
    Research and Development Administration.
        In the private sector, Mr. Kripowicz managed research and
    development programs at Mechanical Technology Inc.;
    construction contracts for Consolidated Edison of New York; and
    financial planning and budgeting at NUMEC, a nuclear subsidiary
    of ARCO, and was a chemist for Dupont. He also served as an
    officer in the United States Army. Mr. Kripowicz received his
    B.S. in chemistry (cum laude) from Lafayette College in 1963,
    and his M.B.A. from the University of Pittsburgh in 1970. A
    native of Butler, Pennsylvania, Mr. Kripowicz currently resides
    in Silver Spring, Maryland.
                                    ------

                       Biographical Sketch of Joseph Romm

        Dr. Joseph Romm was named Acting Principal Deputy Assistant
    Secretary for Energy Efficiency and Renewable Energy in August
    1995. In this capacity, Romm helps the Assistant Secretary,
    Christine Ervin, manage the $800 million portfolio of research,
    development, and deployment of clean industrial,
    transportation, building, and utility technologies. He is co-
    author, with Deputy Secretary Charles Curtis, of the April 1996
    Atlantic Monthly cover story, ``Mideast Oil Forever.''
        From July 1993 to July 1995, Romm was special assistant for
    policy and planning to the Deputy Secretary of the U.S.
    Department of Energy, where he advised the Deputy on energy
    efficiency, renewable energy, pollution prevention, and
    industrial competitiveness. He served as the Executive Director
    of the Department's Pollution Prevention and Waste Minimization
    Executive Board, which works to minimize the Department's own
    waste stream and to coordinate its pollution prevention R&D.
        Romm is author of the recent book Lean and Clean
    Management: How to Increase Profits and Productivity by
    Reducing Pollution (Kodansha, 1994), a ``how to'' book for
    companies that want to improve their energy and environmental
    performance. The book documents two dozen case studies of
    companies that have increased productivity through energy-
    efficient building and office design, industrial energy
    efficiency, of pollution prevention.
        From mid-1991 to mid-1993, Romm worked with Amory Lovins at
    Rocky Mountain Institute. Romm holds a Ph.D., in physics from
    M.I.T., and has written about pollution prevention and
    manufacturing for Forbes, Technology Review, Foreign Affairs,
    Industrial, the New York Times, and USA Today.
                                    ------

                  Biographical Sketch of Elizabeth E. Smedley

        Elizabeth E. Smedley was appointed Controller for the U.S.
    Department of Energy (DOE) on September 6, 1985 and named
    Acting Chief Financial Officer (CFO) when the Department
    established a CFO organization in August 1991. She served in
    that capacity until DOE's first Presidentially appointed,
    Senate confirmed CFO, Joseph F. Vivona, was sworn in on July
    25, 1994. She was again named Acting CFO on January 17, 1997.
    As Acting CFO she manages the Department's budget and
    accounting operations which total over $20 billion in resources
    annually, as well as in the development of financial policy and
    for conducting a compliance review program which ensures that
    proper financial procedures are followed by Headquarters and
    field offices.
        Mrs. Smedley has been with DOE since December 30, 1979,
    serving first as the Director of the Office of Financial
    Policy, and then as Deputy Director, Office of Budget. She
    served as the Agency Budget Officer from June 1981 until June
    1983, and most recently, as Assistant Controller for Budget,
    Policy and Compliance.
        Prior to her assignment to DOE, Mrs. Smedley spent four and
    one-half years as Head of the Operating Forces Branch within
    the Office of the Comptroller of the Navy. In this position,
    she was responsible for formulation, defense and execution of
    the portion of the Navy Budget which provided operating funds
    for the Atlantic and Pacific fleets. From 1964 to 1975, she
    served in positions of increasing responsibility with the
    Public Health Service, Department of the Army, Defense
    Communications Agency, and Department of Navy.
        In recognition of her work at DOE, Mrs. Smedley received
    the rank of Distinguished Executive in the Senior Executive
    Service in 1982; the DOE Meritorious Service Award in 1984 and
    1990; the rank of Meritorious Executive in the Senior Executive
    Service in 1988; the Secretary's Award in January 1989; the
    Donald L. Scantlebury Memorial Award in 1989; and the Superior
    Performance Award in 1989, 1990, 1991 and 1992.
        Mrs. Smedley received a Bachelor of Arts degree in
    International Relations from Goucher College in 1964 and did
    graduate work in Business and Public Administration at George
    Washington University. She has been active in community
    affairs, and from 1969 to 1973, served in a part-time elected
    capacity as Councilwoman for the city of Bowie, Maryland.
        Born in Baltimore, Maryland on November 9, 1943, Mrs.
    Smedley currently resides in Boonsboro, Maryland. She is
    married to Jerry Morgan Smedley of Mishawaka, Indiana. They
    have four children: John, Jeremy, James, and Jennifer.

                                  rocky flats

        Senator Campbell. Thank you. Let me come back to Rocky
    Flats for a minute, but based on your testimony, I think as you
    mentioned, the dependency we are now facing in getting up to 60
    percent I believe is the figure you mentioned, it really is
    unacceptable to me, too.
        You focused on production of natural gas, alternative
    fuels, efficiency, and so on. I commend you for that. I think
    that's all great.

                     naval petroleum and oil shale reserves

        One thing I did want to deal with a little bit is the study
    that was due from the Department of Energy. I know you did not
    have anything to do with it, you were not there, but we did
    request a study sometime ago, and it was supposed to be
    delivered to us last summer on the Naval petroleum and oil
    shale reserves.
        We have yet to get it, and yet we have seen some press
    releases and copies of memorandums that were released to the
    press that said that that had been done sometime ago. I was
    wondering if you know why we had not got it yet.
        Secretary Pena. Mr. Chairman, I am aware generally of the
    problem. It is not completed, and I understand that staff has
    had conversations with others about the delay, and it is my
    understanding that the report will be finished in a very timely
    fashion, I hope in the next few months.
        Mr. Kripowicz. Actually by the end of March.
        Secretary Pena. The end of this month hopefully.
        Senator Campbell. The end of March? OK. I would appreciate
    if you would focus on that and make sure we get one.
        Secretary Pena. We will. We think it's very important and
    we want to comply with the requirements.
        Senator Campbell. It is also my understanding that the
    Department plans on introducing some legislation disposing of
    the oil shale reserves. I would draw your attention to a bill
    that I introduced that I will probably be reintroducing that
    would transfer the authority from Department of Energy to the
    Department of Interior to lease the natural gas that may
    measure in the trillions of cubic feet under the oil reserves.
        We did not really get anywhere in the 104th with that bill,
    but we are going to try to move that this time with your input.
        My question really is, first of all, is the administration
    going to introduce some legislation to sell the oil shale
    reserves or part of it?
        Secretary Pena. Mr. Chairman, I do not believe we are yet
    at the stage of proposing legislation for the specific purpose
    of leasing or selling the oil shale reserves. However, we are
    very aware of the issues you have raised in this regard.
        The Department has had preliminary conversations with the
    Department of Interior pursuant to the suggestion you raised, I
    believe, last year about how one might go about looking at
    either, if not sell, a lease of the minerals in that part of
    the reserve. We're going to continue those conversations.
        I believe that by bringing in some independent experts we
    can get better judgment about that. In the context of an
    overall report that the Department will be providing to the
    Congress I think in September of this year dealing with the
    whole naval petroleum reserve and other reserves, I think we'll
    be able to comment much more specifically about the direction
    we're going to head in, but I would be pleased to work with you
    on that. I know it's a high interest of yours to determine how
    we can best approach that particular problem.
        Senator Campbell. I know we are catching you a little bit
    flat-footed, but I was wondering if there had been any dialog
    with the environmental community. I was worried about wildlife,
    the ranchers that have grazing permits in that area and a
    number of other things, but I assume you will be taking all
    those into consideration and visiting with them at least before
    we----
        Secretary Pena. That is correct, Mr. Chairman, and there
    are some concerns that have been raised, particularly about
    subsurface treatment. Of course, we do have some issues we are
    raising with the Department of Interior. Again, we hope to
    resolve those. Now that I'm official I can have those
    conversations with my good friend Bruce Babbitt to see how we
    can address this issue.

                         national renewable energy lab

        Senator Campbell. Thank you. In addition, you know that the
    National Renewable Energy Lab is very important in our State,
    in fact very important to the Nation. They have done just some
    marvelous research there. I visited two or three times and was
    really impressed with some of the new technology that they are
    developing. Could you perhaps explain a little more in detail
    about the funding for the National Energy Resource Lab or
    perhaps your colleagues can.
        Secretary Pena. Let me start, Mr. Chairman. I guess
    fortunately I'm also familiar with that very important lab
    since it's in Colorado, and I remember the very fine work it
    has done over the years, as you have, and I look forward to
    perhaps taking some time to visit again with you when you have
    some time and we can both be there together. That's a very high
    priority lab for us. We want to continue to be supportive in
    terms of funding. As far as I know our funding is in good
    shape. Let me ask Mr. Romm if he wants to add to that.
        Senator Campbell. Would you identify yourself for the
    record.
        Mr. Romm. Sure. Dr. Joseph Romm, the principal Deputy
    Assistant Secretary for Energy Efficiency and Renewable Energy
    at the Department.
        Yes; we have requested in the energy and water account,
    roughly a $70 to $80 million increase in renewable energy
    technologies over fiscal year 1997. Much of this is either done
    at the National Renewable Energy Lab or passes through, and
    they help manage that, so a pretty significant increase in
    renewable energy funding.
        Senator Campbell. Thank you. Senator Byrd, do you have some
    comments or questions, please?

                                 fossil energy

        Senator Byrd. Thank you, Mr. Chairman. Mr. Secretary, I
    join with others in congratulating you on your new assignment
    and wishing you well.
        The use of energy in so many facets of the daily routines
    of the American public has a huge impact on the U.S. economy.
    The Energy Information Administration estimates that end users
    of energy spend $560 billion per year in the United States.
    Thus our energy security has a direct bearing on our economic
    and national security. These factors, when coupled with the
    environmental concerns associated with energy use, are at the
    root of the programs that are supported by the DOE budget.
        Is it accurate that fossil fuels are the dominant source of
    energy in the United States and are projected to remain so in
    the foreseeable future?
        Secretary Pena. That is correct, Senator Byrd.
        Senator Byrd. Would you agree that based on the
    Department's own projections there remains a very important
    role for fossil fuels and particularly for coal in meeting our
    energy requirements for the future?
        Secretary Pena. We agree with that statement. I personally
    agree with that statement, Senator, and that's why we're very
    supportive of the Clean Coal Program in particular.
        Senator Byrd. How will the program investments in the
    fossil energy budget help us to continue to meet the demand for
    energy in this country?
        Secretary Pena. Senator, in a number of ways. First of all,
    as I stated in my testimony, we will continue to be supportive
    of the Clean Coal Technology Program, which is a demonstrated
    success. We believe the efficiencies we have already
    demonstrated in that program where we have 40 individual
    projects, 20 of which have been completed, 20 which are now
    either in construction design or in operation are all, we
    think, going to have the potential for increasing the viability
    of the use of clean coal in the future. It is a very important
    part of that strategy.
        The remainder of the investment we are making in other
    clean energy programs will do the same in other technologies.
    We believe that given what we are observing in the private
    sector, which is a decrease in the amount of investment for
    research and development, that as a matter of national policy,
    we as a government, as an American people need to make a
    decision about how much more we want to ensure that research
    and development, particularly in the long term, in this very
    important area, continues to be a high priority, so that we are
    not left behind, particularly compared to our competitors in
    Germany and Japan, which are making, at least compared to GDP,
    higher if not comparable investments in this kind of research
    and development.
        It is my judgment that we need to continue to make this
    research and development investment. It is good for the
    country. It sustains a very important public policy, and given
    the conversations we had this morning about the need to
    establish an energy independent strategy for our country, this
    is a very important part of that strategy.
        Senator Byrd. I am glad to hear you say that, Mr.
    Secretary. I am concerned about the impact that the proposed
    fiscal year 1998 funding levels for fossil energy will have on
    our ability to complete development of some of the major
    technologies in a timely manner. What makes this a particular
    concern is that increased funding is proposed in other areas of
    the Department of Energy budget.
        One of the largest programmatic increases requested for
    fiscal year 1998 is for the energy efficiency programs within
    the Interior bill which are proposed to grow by nearly 25
    percent above the fiscal year 1997 level.

                  renewable energy--use and future projections

        How much of our current energy use is from renewable
    sources and what are the future projections?
        Secretary Pena. Senator, I would be happy to get you the
    specific estimates of what our current renewable energy use is
    and what our projections are. Let me generally state and agree
    that they are not at the levels that we would like them to be.
        [The information follows:]

                  Renewable Energy--Use and Future Projections

        Current U.S. renewable energy capability is over 93
    gigawatts. Nearly 85 percent of that is conventional
    hydropower. Future use of renewables is dependent on economic
    growth, rate of technology introduction, the price of oil and
    other factors affecting market penetration of nonhydro
    renewables. Minimally we expect the 15 gigawatts of nonhydro
    renewable capacity to at least double by 2015. In the Office of
    Energy Efficiency and Renewable Energy's aggressive technology
    and market penetration approach we expect installed capacity of
    more than 30 gigawatts and as high as 40 gigawatts 5 years
    sooner, by 2010. In most every scenario, nonhydro renewables
    are expected to comprise virtually all the domestic growth in
    the utility sector's use of renewables. As a point of
    reference, Royal Dutch Shell Oil Co.'s strategic planning
    group's growth scenario expects the world's renewable use to
    increase on the order of fivefold by 2015.

                     decrease in domestic production of oil

        Secretary Pena. However, we fundamentally have two problems
    we must face. One is the fact that we are seeing a decrease in
    domestic production of oil in particular, and that slope
    continues to go down, and second, we continue to see a very
    significant increase in consumption of energy.
        If we do nothing and allow those two trends to continue
    over the next 10 or 15 years, we are going to be even more
    energy insecure. So our approach in the budget we have
    submitted is to deal with both, the production side and the
    consumption side.
        We address the consumption side by our increased investment
    in energy efficiency. We can detail that with more specificity,
    and by continuing to work on the production side.
        I stated several weeks ago in one of my confirmation
    hearings that one of my priorities will be to establish a
    credible and specific strategy on the production side to find a
    way, if at all possible, however difficult it might be, to get
    us to a position of becoming more energy independent, and that
    includes having timetables and targets and measurements and
    evaluation of our progress over a period of years. It will be a
    combination of both consumption and production strategies which
    I think we as a nation need now rather than waiting for the
    next century when we have a real crisis.

                     energy efficiency and renewable energy

        Senator Byrd. What funding is proposed in the fiscal year
    1998 budget in total for efficiency and renewable energy
    research and development?
        Secretary Pena. In the area of energy efficiency,
    approximately $517 million for research and development. I'm
    sorry, Senator, the first part of your question was?
        Senator Byrd. What funding is proposed in total for
    efficiency and renewable energy research and development?
        Secretary Pena. The total amount, Senator Byrd, is a little
    over $1 billion, $1.017.4 billion in total.
        Senator Byrd. For energy efficiency and renewable energy
    programs. So the budget proposes to spend about $1 billion on
    programs that account for about 8 percent of our energy use. We
    are talking here about the nonnuclear, nonfossil sources; $1
    billion on programs that account for about 8 percent of our
    energy use and about $350 million for programs that account for
    85 percent of our energy consumption, we're talking there about
    fossil fuel. Now, to me that seems out of balance. What is your
    perspective?
        Secretary Pena. Senator, I think we may have a
    misunderstanding of how you have reached your particular
    calculation, and we would be happy to sit down with you to have
    a better understanding of what we are trying to compare. Mr.
    Romm is indicating to me that there may be a different way in
    which we're characterizing that, and if I may ask him to at
    least share with you the way we're looking at that particular
    question, let's try to answer it for you.
        Mr. Romm. Senator Byrd, the efficiency and renewables
    budget does not all go toward renewable energy, which
    constitutes, as you know, just a few percent of the Nation's
    energy supply. Most of the $1 billion goes toward the efficient
    use of energy, most of which is fossil fuels, if you see what
    I'm saying.
        We work on automobiles that run on gasoline more
    efficiently, we work on gas turbines that industry might use,
    and we support technologies that would use electricity more
    efficiently. I would say the bulk of the technologies in the
    efficiency side which the Interior Committee supports are, in
    fact, for the efficient use of fossil energy, and, therefore, I
    don't think it's correct to characterize our $1 billion as
    going toward supporting technologies that just constitute a few
    percent of the Nation's energy supply.
        Senator Byrd. What type of reductions in our use of fossil
    fuels does the Department anticipate as a result of the energy
    efficiency improvements? What do you think will result from the
    energy efficiency improvements with respect to the kinds of
    reductions in the use of fossil fuels that will come about?
        Secretary Pena. Senator, let me, if I might, come back and
    answer that question more specifically, and let me give you a
    general answer now. One of the questions that I have been
    asking as the new Secretary of Energy is this: As we make
    multimillion dollar investments in these strategies, I believe
    it is incumbent upon us to give you and the American people a
    much more specific answer on what we are producing, what is the
    product of these investments.
        The question you're asking is one that I have been asking,
    too, and so let me at least today ask that I come back to you
    with a much more specific answer to that question. It is a very
    important question, one that I need to refine with my
    colleagues at the Department of Energy.

                 federal energy technology center consolidation

        Senator Byrd. Very well. In response to--let us talk just
    briefly about Morgantown, the Federal Energy Technology Center.
    In response to declining budgets and pressures for changes in
    the way that the DOE does business, last year Congress and the
    administration reached an agreement regarding changes in the
    Fossil Energy Program. As a result of this the Morgantown and
    the Pittsburgh Energy Technology Centers are being consolidated
    as one administrative organization with two sites, two
    locations.
        This new entity is being called FETC, F-E-T-C, the Federal
    Energy Technology Center [FETC]. Could you state for the
    record, now, what is the status of the consolidation, what
    major hurdles have been cleared, and what are the next big
    issues to be addressed?
        Secretary Pena. Senator, generally speaking, the
    consolidation is moving on a timely path and is meeting its
    objectives. We believe that with the consolidation we'll be
    able to reduce both our administrative overhead and some of the
    cost of duplicative contracting services at both facilities.
        We have some money in the budget for 1998 to make sure we
    have a smooth transition so that we will avoid any major
    disruptions, as we have discussed before. We know that there
    may be some concerns that in the event we don't meet our
    milestones, there may be some problems.
        We will watch that very carefully and obviously work with
    you because of your great concern there and make sure that we
    meet those milestones. As of today I've been informed that we
    are on target, the program and the consolidation are moving
    smoothly, and we expect to meet the milestones that we set out
    in the consolidation to begin with.
        Senator Byrd. Would you agree that we need to remain
    flexible in terms of providing FETC the resources necessary to
    chart its new course in a manner that is as minimally
    disruptive as possible to the two sites?
        Secretary Pena. Yes; I would, Senator. Again, we think that
    the money we have in the budget for this year to reach our goal
    of the consolidation is the appropriate amount. However, as we
    go through this process, if we determine that for some reason
    we're not meeting our goals and there needs to be an
    adjustment, we will obviously take appropriate action and work
    with you on that matter.

                  federal energy technology program direction

        Senator Byrd. I appreciate that very much, Mr. Secretary.
    The budget proposes a reduction of $6.2 million in fiscal year
    1998 for the FETC program direction budget, and I hope you will
    keep me fully apprised as to whether the remaining funding will
    be sufficient to allow the consolidation to proceed in an
    orderly way. You have indicated already that that is what you
    expect to do, but we will talk about it and work together on
    it.
        Secretary Pena. We will do that, Senator.
        Senator Byrd. I would like to touch on one other program
    area that is important to the Federal Energy Technology Center.
    How much time do I have left?
        Senator Campbell. We haven't been timing it, Senator, but
    we might--I don't know how long Senator Domenici can stay, but
    we might go to him and come back to you depending on how long
    you will be.
        Senator Domenici. That is all right, Senator. Thank you.
        Senator Campbell. All right.

                 environmental management program at morgantown

        Senator Byrd. I would like to touch on one other program.
    That is with respect to environmental management and the
    technology development program. While funding comes from the
    Energy and Water appropriations bill, which is chaired by the
    distinguished Senator from New Mexico, Mr. Domenici, the
    environmental management program plays a strong role in helping
    FETC to have a diverse portfolio that works for many different
    clients within the Department of Energy.
        Morgantown currently manages some $85 million annually in
    environmental management programs to develop new technologies
    for use in the cleanup of environmental contamination resulting
    from nuclear weapons production. FETC brings some unique
    capabilities to this program--vast experience in implementing
    projects with industry and other governmental organizations
    that involve creative and complicated contractual arrangements,
    broad technical and engineering expertise, and an ability to be
    an objective partner in the decisionmaking process.
        So, given the strengths that FETC can bring to the
    Environmental Management Program, is this a partnership that
    the Department will continue to support?
        Secretary Pena. Senator, generally speaking, the answer is
    ``yes.'' We think there is an important role in the
    environmental management area and whatever contributions FETC
    can make, we believe we can continue to work with the
    organization.
        Senator Byrd. Very well. One of the successes in FETC's
    participation in the Environmental Management Program has been
    its use of the capabilities of the International Union of
    Operating Engineers Hazardous Materials Center in Beckley, WV.
    How has this partnership benefited the environmental management
    program?
        Secretary Pena. Senator, I'm going to have to turn to my
    associates here. I'm not familiar with that particular
    relationship. Let me ask Mr. Kripowicz to talk about that.
        Mr. Kripowicz. Bob Kripowicz. The particular contract looks
    at human factors, engineering, and hazardous waste operations,
    and we find that to be very valuable to the cleanup of our
    nuclear sites that have contamination problems, and that has
    been a very successful operation with the operating engineers.
        Senator Byrd. It is because of the people's concerns about
    the safety issues that are associated with handling
    contaminated materials. I am glad to hear that you feel that
    the center has been helpful in addressing the end user issues
    associated with the Environmental Management Program.
        Well, I close, Mr. Secretary, by thanking you for your
    testimony, and I look forward to working with you in support of
    programs that will contribute to the continued use of coal
    through more efficient power generation systems and improved
    environmental performance.
        The Federal Energy Technology Center plays a key role in
    fostering these technologies. The facility in Morgantown
    employs some 550 persons, so I will stand ever vigilant to
    protect its role in promoting advanced fossil energy
    technologies. While the fossil energy budget is a relatively
    small part of the overall DOE budget, I encourage you to take
    an active role within the administration in defending this
    program against budget reductions and policy decisions that
    will jeopardize our ability to prepare for the energy
    challenges of the next century.
        I am somewhat troubled by indications that the
    administration is not fully involving the Department of Energy
    and its vast expertise when policies and regulations are
    considered that will have a considerable impact on the energy
    producing and consuming aspects of our economy.
        With respect to the budget, I will be working with Chairman
    Gorton to ensure that the subcommittee takes an approach to our
    energy research and development programs that is consistent
    with where our energy comes from and how we use our energy.
        While dollars are constrained, I do not believe that this
    is the time for us to abandon our support of the technology
    development efforts already underway. We need to complete these
    programs so that the technologies will be commercially
    available in a timely manner to help us meet multiple goals.
        Now, I have additional questions that with your permission,
    Mr. Chairman, the permission of the subcommittee, I would like
    to have answered for the record.
        Senator Campbell. Without objection.
        Senator Byrd. Thank you again, Mr. Secretary. I thank your
    associates, and I thank Senator Domenici for his characteristic
    courtesy in allowing me to proceed and thank you, Mr. Chairman.
        Senator Campbell. We will now turn to the Senator who has
    corrected many of our colleagues on the pronunciation of your
    name.
        Senator Domenici.

                      opening remarks of senator domenici

        Senator Domenici. We did have a good time, Mr. Secretary,
    the other day in full session, a lot of people there. Did you
    hear about that morning we had in the Energy Committee?
        Senator Campbell. He was not there that morning.
        Senator Domenici. I know, but have you heard about it?
        Secretary Pena. Generally I have.
        Senator Domenici. Well, there was a huge crowd, you know,
    and I thought they were all there just because we were going to
    approve your nomination. They were there for an electric
    generating reform seminar, so we had lobbyists from all over
    and all these great Senators called you by your wrong name. So
    I told them how to say it. I said it's very simple, like pen, a
    fountain pen, with a y-a, Pena. I think we're getting it.
        Secretary Pena. Thank you very much, Senator.
        Senator Domenici. Mr. Secretary, first, I am glad you are
    here. I am hopeful that the long wait, with all its pressures
    have not been too difficult on you and your family, especially
    with your wife being pregnant. I hope she is feeling well and
    that everything is going fine.
        Secretary Pena. She is, Senator. Thank you for your
    thoughts.
        Senator Domenici. Please tell her that for me, will you?
        Secretary Pena. I will.
        Senator Domenici. I am glad Senator Byrd is still here, and
    I want to give you, my good friend, an observation about what
    is probably not going to happen with the President announcing
    what he has about the Consumer Price Index. I believe any
    chance of getting a negotiated budget agreement between the
    Republicans and the President are finished. I believe----
        Senator Byrd. Why are you telling me this?
        Senator Domenici. Well, because I want to tell you what is
    probably going to happen. It does not sound too good.
        Senator Byrd. Why are you singling me out to be the victim?

                increases in fiscal year 1998 president's budget

        Senator Domenici. I think that perhaps you might be able to
    carry a message. I note here, Mr. Secretary, the President's
    request in energy conservation, represents a 24-percent
    increase.
        Senator Byrd. I am not a homing pigeon.
        Senator Domenici. The President's request for energy
    conservation research and development----
        Senator Byrd. They carry messages.
        Senator Domenici [continuing]. Represents a 24-percent
    increase; the transportation sector, a 16-percent increase;
    industrial sector, a 19-percent increase. Oh, here is a good
    one. Federal energy management, it is not a big account, but it
    has a 57-percent increase. Policy management, a 20-percent
    increase. Well, I have a whole list, but that is just a
    smattering.
        Let me say to the subcommittee, and I am preaching to the
    choir in terms of my good friend the chairman because he
    understands as a member of the Budget Committee, that it seems
    to me we are left with no alternative other than to freeze
    discretionary appropriations for 5 years, and that probably
    means that all of these things we talked about here are gone.
    Forget about 24 percent increases and 19 and 16, and so on.
        A freeze means a freeze. It means no more to spend 1 year
    than the next, and spend no more this year than last. It means,
    Mr. Chairman, that you have got competing interests, so some
    have to go up because they must, which means some have got to
    go down even below a freeze.
        Now anybody that knows me understands that this is not my
    desire, but I am going to tell you right now, and I am telling
    the public from this day forward, this President's budget puts
    Republicans in a position where they have no alternative.
        The President will not cut entitlement programs. If we
    touch them, it will be the end of the world. He has cut
    Medicare $82 billion and claims it is $100 billion, and one-
    half of that is phony. We have to produce a balanced budget. He
    is $160 billion off the mark on economics in the same period of
    time, and we are supposed to produce a budget.
        Well, we will do one. Just be patient. We will do one, and
    I am guaranteeing you when we are finished, it is not going to
    be a pleasant life for the President and all these programs he
    wants. We will not be dumb because we will not cut the programs
    that he wants to resonate out there with the public. We will
    increase them. Let us see where the rest of it goes. Let us see
    where the Department of Commerce goes. I just came from one of
    the subcommittee meetings there. It might mean a nice 20
    percent cut after you pay the personnel.
        Senator Byrd. I have a suggestion.
        Senator Domenici. Well, I am finished and I hope you do. I
    only have two little questions.
        Senator Byrd. My suggestion would be that the President and
    the Republicans back off from their proposals to cut taxes at
    this time.
        Senator Domenici. My distinguished friend, let me suggest
    that while I am not prepared to tell you that you are right,
    what I have just described is the case even if we do not cut
    taxes because of the lack of entitlement savings and the desire
    to get the budget balanced in 5 years. What I have just given
    you assumes no tax increase.
        Senator Gorton [presiding]. No tax cuts.
        Senator Domenici. Excuse me, no tax cuts. Now, having said
    that--and thank you for the thought.
        Senator Byrd. Thank you.

                               sale of elk hills

        Senator Domenici. Now let me ask you about the Elk Hills
    Naval Petroleum Reserve. Are you familiar with it?
        Secretary Pena. Yes; I am, Senator.
        Senator Domenici. For many years we have been trying to do
    something about this. It is never the right time, but I guess
    we finally authorized the sale last year as part of the defense
    authorization bill. Could you tell the committee where are we
    in this sale? Is it going to be completed? I think we mandated
    it in February 1998.
        Secretary Pena. That's correct.
        Senator Domenici. Could you tell us about that, please.
        Secretary Pena. I can, Senator. I've been briefed about
    this. Generally speaking, the work we have to do in complying
    with the congressional requirements for having the sale is
    moving along. In particular, we have already hired an outside
    financial advisor as required by the statutory guidance. We
    have hired five independent experts and will be doing the five
    independent analyses. These independent analyses will be used
    to formulate the minimum price, which cannot be lower than the
    higher of the average of the five or the middle three
    evaluations.
        We are having discussions, as you know, with our partner we
    have in this, which is one particular oil company, but we are
    moving along with this, and at this point our target is still
    to comply with the February target.

                          strategic petroleum reserve

        Senator Domenici. One last question. The President's budget
    proposes to sell $1.145 billion of oil from the strategic
    petroleum reserve. Are you aware of that or----
        Secretary Pena. Yes; I am, Senator, I think that's in 2002?
        Senator Domenici. Right. Now, the way it is structured,
    that is a mandatory spending proposal. Are you all familiar
    with mandatory versus discretionary?
        Secretary Pena. I am, Senator. I think we are.
        Senator Domenici. Now it is going to be difficult--the
    chairman can speak for himself and look at it perhaps even much
    more in depth--but it's going to be difficult to meet the
    subcommittee's 602(b) allocation and continue to fund the DOE
    programs at the 1997 level which included a $220 million offset
    from these oil sales.
        In your opinion, which would be preferable, selling the
    $220 million of the strategic petroleum reserve to fund its
    appropriation or reducing DOE's other programs by $220 million?
        Secretary Pena. Senator, neither. Let me try to answer your
    question more specifically.
        Senator Domenici. I gathered that.
        Secretary Pena. No. 1, it is at least my view, and I
    believe the administration's general view, that we not make
    additional sales from the strategic petroleum reserve. Later on
    this year, I believe in October, we will present a report for
    the Congress on the overall administration's position on the
    reserve. I believe the reserve is very important. We have only
    67 of 90 days of net import equivalent in the reserve today.
    There have been sales in the reserve. Some proposed by the
    administration, some by the Congress.
        Senator Domenici. Yes.
        Secretary Pena. But I think now that the dust has settled
    from those sales, and as we all begin to focus on the need to
    develop an energy independence strategy, the need for the
    reserve looms even greater. So let me respectfully suggest,
    Senator Domenici, that while there is the mark in 2002 for the
    sale of over $1.1 billion in the reserve, that that is a mark,
    and it will be my view, at least, that we have some discussions
    within the administration about how we can look to other
    options other than that mark.
        It is a ways out. There is time to make adjustments, and as
    you know in this multiyear budget sometimes some of these place
    markers are there for a reason, but I think that--I believe we
    ought to at least look for other ways of dealing with that kind
    of a cut.
        Senator Domenici. Mr. Chairman, I guess you know I would
    agree with that last statement. I do not know how you feel,
    but, you know, I think we are perpetrating somewhat of a fraud
    on the American people.
        We spend all their money telling them we need this big oil
    reserve and we go through all these expenditures and every time
    we run into a budget crunch we sell some oil. The world did not
    change any. The world is the same old world, oil dependence is
    growing.
        But that is $1.145 billion more that the President's budget
    is off in the year 2002. It is already off $70 billion, so now
    we throw this one away, that is $71 billion. I mean, everywhere
    we turn it is one of these kind of things we find in this
    budget.

                        increases in president's budget

        Since I talked about it, I think I should be fair and say
    to my good friend Senator Byrd that it is most interesting, the
    President's budget has the deficit going up $25 billion under a
    steady-as-you-go, growing economy next year over this year, $25
    billion. I do not understand how that is deficit reduction.
        In fact, deficits do not significantly start down until the
    fourth year. So obviously these budgets are full of these
    increases--16 percent, 20 percent, 12 percent, and so on.
        I just came from Commerce. The whole Commerce Department is
    up 12.4 percent in the budget. Did you know that, Slade? It is
    just a big fat budget. Now we are going to have to change it,
    and the President is going to say, I could pay for all that
    stuff. You are all bad guys up there.
        If I sound a little bit upset with the situation, I am. I
    am going to do my share to do what is right. I do not want to
    cut discretionary spending, but I do not know how else we can
    do it. Thanks for the time.
        Senator Byrd. Well, we have already cut it to the bone. We
    have been cutting it to the bone for years, and I do not know
    how we can cut it much more. But I think it is absolutely folly
    to suggest that we ought to cut taxes, and I fault both parties
    for that, the administration as well as the Republican Party.
    It is no time to cut taxes. If we mean business about reducing
    the deficits, we ought to put that money on the deficit.
        Senator Gorton. Well, Senator Byrd, as Senator Domenici
    said, given the situation we are in today, I think you are
    going to get your way, but I do not think that is going to
    solve the problem that we are going to face in this
    subcommittee.
        First, Secretary Pena and Senator Byrd, I want to apologize
    for being late to my own wedding here, as it were, my own
    committee meeting. Only the importance I ascribe to the debate
    on the floor to emasculate the first amendment could have kept
    me away. Senator Domenici was there and knows the reason that I
    was there.
        But I do want to welcome you to this job publicly, as I
    have privately, and express my delight that you are finally in
    office. This I guess is your first public appearance, is it
    not, since you have been sworn in?
        Secretary Pena. That's correct, Mr. Chairman.
        Senator Gorton. Well, I find that to be delightful, and an
    honor to this subcommittee. As I also told you in our private
    conversation yesterday, this subcommittee has been a matter of
    real gratification to me as chairman, in large part because of
    the wonderful education and support that I have gotten from
    Senator Byrd, who is the repository of so much that is great
    about the history of our entire Senate and the way in which we
    operate here. I hope that this year we're going to continue to
    work together, even under very, very difficult circumstances.
        I'm not sure whether the materials that we gave you have in
    it this colored chart. Well, if it doesn't, we'll give it to
    you. When I took----
        Secretary Pena. Mr. Chairman, I was not provided any
    materials.

                           allocation to subcommittee

        Senator Gorton. OK. Well, when I took over this
    subcommittee, because I didn't understand an awful lot of it
    and because I thought pictures were so significant, I started
    putting together colored charts like this that show the overall
    appropriation allocation to this committee and where it goes,
    just so that we can understand it conceptually.
        Here you are, way down here in the orange for energy
    programs. Obviously the largest single use for our money is the
    various land management agencies--the Park Service, the Forest
    Service, and the Bureau of Land Management and the like--the
    heritage of the American people, and a field in which there is
    huge public interest, most particularly in the National Park
    Service.
        The second area is the unique responsibility that Congress
    and every administration has for Indian programs. And then we
    get to science programs, your own, finally even smaller than
    yours, cultural programs, which I know my two colleagues here
    agree with me create much more in the way of correspondence and
    calls from our constituents than is warranted by the absolute
    size of each of those appropriations. But because they have so
    much to do with the culture and the heritage of this country,
    they are very, very important, and that puts you in a tough
    situation.
        Your programs probably have smaller constituencies from the
    point of view of the general public than any of the other major
    or significant programs subject to the jurisdiction of this
    subcommittee.
        That's not for 1 minute to say that they're less important.
    I am convinced that a large number of them are of vital
    importance to the future of the country, but it does impose on
    you a set of challenges in dealing with Members of Congress in
    both Houses that's perhaps greater than the other Secretaries
    or administrators of these other programs.
        Second, I must, with great regret, join my colleague,
    Senator Domenici, in saying that I think the failure of the
    abortive but very sincere negotiations over an overall budget
    that result in an administration that does not want to make any
    significant changes in entitlement programs is likely,
    ultimately, to brutalize the discretionary appropriations
    process in general terms and very specifically in terms of this
    subcommittee.
        I want to say across party lines that I agree totally with
    Senator Byrd on the proposition that budget cuts over the
    course of the last several years have been very
    disproportionately imposed on discretionary spending, spending
    that goes to the education of our young people, to our own
    direct responsibilities as landowners, to the advancement of
    knowledge, to the building of our infrastructure.
        In extensive conversations over the last year with Senator
    Domenici, we had agreed that we just had to seek a budget this
    year that allowed discretionary spending once again to be able
    to rise at least to a modest extent, rather than consistently
    to be cut.
        But it is not realistic to expect a closely divided
    partisan Congress to take on entitlement programs that the
    President won't take on or to go through the exercise it went
    through 2 years ago, and I deeply fear that that means that the
    allocation that Senator Byrd and I will eventually get for this
    subcommittee will not be at the level that the President
    recommended. I would like very much for it to be so. I might
    have some different priorities within it, but I would like very
    much for it to be so.
        And again, as I told you privately and can now say
    publicly, I'm not today going to ask you to set priorities or
    state what you would cut first. That would be an unwarranted
    imposition on you.
        You're a member of the Cabinet, you're going to support the
    President's budget, but as we work forward, assuming that we
    are going to have to make significant reductions, I want to
    make them in the least harmful way that I can. I hope that we
    will be able to have your constructive suggestions as we go
    forward and that in your own mind, at least, you're going to
    set a number of priorities that will help us with this very
    difficult set of questions.
        Secretary Pena. Mr. Chairman, if I could just briefly
    respond. Absolutely I will work in a very constructive way with
    you and members of the subcommittee to prioritize what we need
    to get done in the Department.
        Having gone through, I think, four of these already in the
    last several years, I'm accustomed to the give-and-take of the
    budget process, but I've always tried to have a very
    constructive relationship with the important committees that
    must make these very difficult decisions.
        So you have my commitment, Mr. Chairman, that we'll do that
    in a very honest and constructive way and tell you what our
    bottom line is and what our priorities are, and we understand
    that in any budget discussion there are going to be
    adjustments, and we're happy to work with you on that.

                            electricity deregulation

        Senator Gorton. Another of my responsibilities, and now
    that Senator Dorgan is here, his as well, in the energy
    authorizing committee is the debate over competition and the
    form of deregulation in the electric power industry. That isn't
    our responsibility, of course, but in your research and
    development budget there are a number of programs that relate
    to power.
        Have you had an opportunity yet or does your budget in any
    way reflect any dramatic changes in the way in which electric
    power is both produced and distributed in the United States?
    And if not, will that be a priority of yours?
        Should we follow the same sorts of programs and priorities
    that we followed in the last several years if, in fact, we're
    going to see a rather dramatic change in the structure of the
    industry?
        Secretary Pena. Mr. Chairman, if I understand your
    question, it is this: We are already observing significant
    reductions in our private sector partners' budgets in research
    and development generally. We have seen that in the overall
    deregulation of key industries in our country, and we are very
    troubled by that.
        With respect to electric restructuring or deregulation, we
    would anticipate the same. That is to say, that if we move
    toward a deregulated environment, the kind of pressure that
    will be put on these now very fierce competitors who will be
    competing in a way that they have not been competing before
    will mean that they will make significant efforts to reduce
    their costs, to be more competitive, and the programs that are
    likely to go first are their research and development budgets.
        Having said that and recognizing the kinds of challenges we
    talked about earlier about trying to develop an energy
    independent strategy for our country, recognizing we've got to
    deal both with the consumption and the production side, it is
    my view that we are going to have to make sure that from the
    Federal side we have the kinds of investments in research and
    development to ensure that as a nation and as a matter of
    public policy we continue to make these kinds of investments
    despite the reduction from the private sector side that we'll
    see with competition, to make sure that we're continuing to
    think about the future and to develop those kinds of
    technologies that are critical to our ability to reduce
    consumption and to find more production.
        So it's a concern of ours. We're aware of it. We haven't
    yet quantified it because we're not in that deregulated
    environment, but as we move through this year and all the bills
    that will be introduced to look toward deregulation, obviously
    that will be one aspect or byproduct of deregulation that we'll
    follow very carefully.

             fossil energy research and development accomplishments

        Senator Gorton. Can you tell us what we've gotten from our
    investment in, say, fossil energy research and development over
    the last 4 or 5 years; what tangible results this society has
    obtained?
        Secretary Pena. Mr. Chairman, I can. In fact, I have asked
    my associates at DOE to compile a list, and we would be happy
    to get that to you to give you a comprehensive view, but let me
    just give you a couple of examples, and I asked my associates
    to give me things that we could relate to.
        [The information follows:]
     Examples of DOE/Office of Fossil Energy Accomplishments for Programs
                  Funded Under Interior Appropriations Account
        Built Strategic Petroleum Reserve, world's largest emergency
    petroleum storage reserve, designed to drawdown inventory of 563
    million barrels of crude oil at sustainable rate of 3.9 million barrels
    per day within 15 days of direction from President. Ongoing
    accomplishments will extend SPR facility and systems capability to 2025
    with highest level of reliability and operating cost efficiency.
        Operated, maintained, and produced Naval Petroleum and Oil Shale
    Reserves (NPOSR) to achieve greatest value and benefit to United
    States. Since Reserve opened to full development in 1976, program
    through fiscal year 1996 has generated $16.5 billion in revenues
    against cost of $3.4 billion.
        Supported Development and testing of powerplant technologies that
    have already had major economic and environmental impacts, and will
    form the foundation for future benefits. Technologies include:
      --Low-polluting atmospheric fluidized bed coal combustor, the most
            significant advance in coal-fired boiler technology in more
            than half a century. Federal investment has contributed to more
            than $6 billion in domestic sales, $2 billion in foreign sales,
            and more than 250,000 jobs.
      --Low nitrogen oxide (Nox) burners, which significantly
            lower costs of reducing Nox compared to other
            options. Domestic sales to date total more than $250 million,
            supporting 1800 U.S. jobs.
      --Integrated gasification combined cycle technology, and advanced
            coal-fired power generation system that will be one of the most
            important powerplant options of the 21st century. The potential
            global market (undiscounted) for this technology is estimated
            at more than $400 billion in capital investment by 2030, and
            about $150 billion in domestic market.
        Supported development and testing of technologies and use of other
    approaches, resulting in increased domestic production of natural gas
    and oil through major improvement in recovery costs. Examples of
    technologies and approaches include:
      --Mudpulse telemetry, which is one of the most important innovations
            used today and allows measurement while drilling. Savings are
            estimated at $5 billion.
      --Insulating doughnut for steam flood in deeper oil wells, which
            reduces heat loss in the wellbore and will save industry
            hundreds of millions of dollars over the next decade.
      --Hot oiling paraffin treatment that reduces paraffin buildup in
            wellbores which cause lifting equipment failures, reducing
            industry operating costs by more than $150 million per year.
      --Assistance to states in implementing risk-based management
            approaches in effectively regulating oil and gas injection
            wells. Streamlining savings to domestic gas and oil exploration
            and production industry are estimated at $1 billion through
            2020.
           office of energy efficiency and renewable energy--recent
                                accomplishments
        The Clinton Administration has launched a series of initiatives in
    energy efficiency and renewable energy research, development and
    deployment that are moving our nation toward a future with improved
    environmental quality, greater energy security and increased global
    competitiveness. By the year 2000, these Clinton initiatives are
    estimated to save consumers and businesses over $10 billion in annual
    energy savings and cut annual carbon emissions by 25 million metric
    tons of carbon equivalent. By 2010, these savings are projected to rise
    to $50 billion per year, 500 million barrels of oil per year, and 80
    metric tons of carbon equivalent. Specific recent accomplishments
    include:
      --Implementing the Climate Change Action Plan which, by the year
            2,000, will reduce carbon emissions by 15 metric tons of carbon
            equivalent.
      --Initiated 16 Climate Change programs that have attracted over 2,000
            voluntary business, industry and government partners.
      --Signed more than 100 climate challenge agreements for emissions
            reductions with more than 600 utilities.
      --Established 52 new state and local building retrofit programs,
            leveraging more than $200 million of private sector investment.
      --Established eighteen Motor Challenge showcase agreements to
            optimize electric system efficiencies resulting in more than
            1,000 partners and an investment of $15 million, exceeding
            goals by 700 partners and $5 million.
      --Leading the industry and government design and research for an 80
            mile per gallon car for the future. Technologies already in the
            fleet are saving nearly 1 billion gallons of gasoline a year.
            Signed contracts for developing hybrid vehicles with the three
            major car companies and their suppliers. In fiscal year 1997 we
            will demonstrate a ``no-compromise'' 50 mpg proof-of-concept
            family sedan, maintaining or improving vehicle cost, safety,
            comfort, and performance factors.
      --Displacing nearly 10 million gallons of gasoline annually through
            the more than 30,000 alternative fuel vehicles introduced to
            Federal and local fleets in 55 Clean Cities.
      --Transferring proven energy efficiency and renewable measures such
            as technologies used in ``Greening of the White House'' to all
            Federal buildings to support reduction of federal energy
            consumption by 30 percent by 2005 compared to the 1985
            baseline.
      --Initiated Federal Greening Models such as the White House, the
            Pentagon, the Presidio in San Francisco, and the DOE Forrestal
            Building.
      --Developed 6 major private sector/government energy service
            contracts, attracting millions in private sector investments to
            Federal energy projects, building a new business sector and
            saving federal dollars.
      --Weatherized over 300,000 low-income homes (employing 8-10,000
            people) and upgraded more than 1,000 schools and hospitals
            annually.
      --Developing partnerships with energy-intensive industries such as
            refining, pulp and paper and metals, to develop research
            programs, strategies and technologies that will lead to
            dramatically improved energy and resource efficiency and
            competitiveness by the year 2000, and energy cost savings of
            $10 billion by 2010. Signed Visions agreements with five of the
            seven industries and expect to complete Chemical and Refinery
            Visions before the year is out. Eleven related technology and
            research roadmaps are underway.
      --Developed an Industry Vision and Technology Roadmap for the future
            in partnership with the Pulp and Paper industry that they
            estimate will save them $8 billion in environmental control
            costs.

                               electronic ballast

        Secretary Pena. One was work that we did in the electronic
    ballast, which is the ballast that goes into the fluorescent
    lighting. That one technology success has produced $3.7 billion
    in energy savings. The work that was done on refrigerator
    compressors has produced $6 billion in savings.
        Senator Gorton. In each of those cases, what was the
    public-private split on the cost of the research?
        Secretary Pena. I would have to get that information for
    you, Mr. Chairman. We can break that down. Some of these have
    different variations. But I've got five before me here--
    advanced windows, flame retention heat oil burner, building
    design software. If you add all those up we estimate we saved
    consumer energy costs about $28 billion, and that's just a
    flavor.
        [The information follows:]

                      Energy Conservation Accomplishments

        The Department's investment in buildings efficiency R&D
    over nearly two decades has yielded a number of highly
    successful energy conservation technologies. Five technologies
    in particular are estimated to have saved consumers over $28
    billion--savings that continue to accrue at a rate of more than
    $5 billion each year. These five technologies are: building
    design software; efficient refrigerator compressors; electronic
    fluorescent ballasts; flame retention heat oil burner; and
    advanced (Low-e) windows. The total public investment in these
    five technologies was $45 million and the total direct private
    cost share amounted to over $27 million. The cost share for
    building software design was 19 percent; for efficient
    refrigerator compressors 12 percent; for electronic fluorescent
    ballasts 50 percent; and for advanced (Low-E) windows 68
    percent. There was no private sector funding for the
    development of the flame retention head oil burner, which has
    saved consumers an estimated $5 billion.

                            new fuel cell technology

        Secretary Pena. I haven't even talked about the much more
    aggressive things we're doing in the Partnership for a New
    Generation Vehicle Program, where already just a few months
    ago, even though that work is far from complete, we saw
    Chrysler announce a new fuel cell technology which is cutting
    edge, that no one thought would be able to be announced so
    early in this 10-year research program.
        So we believe that there are demonstrable savings that we
    have been able to demonstrate with the technology investments
    we have made in the past, and what I want to do, as I said
    earlier, is develop a much more strategic direction on this
    question of how we can become energy independent by looking at
    both the consumption side and the production side and asking
    the question of all these dollars we're investing in technology
    what is the product, what are the gains we'll see, what are the
    reductions in energy use we can measure, what are the savings
    to consumers that will result from these kinds of investments.
        And I'll be working very hard to develop that much more
    strategic focus because I share what I believe to be your
    concern, and that is we've got to show product. We have to show
    progress. We have to demonstrate that there is some significant
    improvement in the result of these very significant investments
    which I think are worthwhile, and I will work very hard on that
    issue.

                              repayment provisions

        Senator Gorton. The first cousin to that question is, some
    of your programs have a recapture or repayment provision that
    when research and development is commercialized you get some of
    the money back. How have they worked? Should they be broader?
    Have they worked? Have we actually recaptured any money through
    them?
        Secretary Pena. Mr. Chairman, we have. In the Clean Coal
    Technology Program, for example, which GAO has cited as a model
    public-private partnership venture, there were provisions in
    the early days in the investments we were making there for
    recapture, and we have received, I think, $400,000 or so thus
    far, and that's only in the early stages.
        So we think that by being very strategic in where we will
    require these kinds of recapture provisions, we can begin to
    get a repayment.
        Now, we have to be very thoughtful about it and not impose
    such stringent requirements that our private sector partners
    will back off. But I think there will be occasion, and clean
    coal is one where it's working, where I think that will make a
    lot of sense.

                              codes and standards

        Senator Gorton. One more set, then I am going to defer. One
    of the really controversial areas that we had to deal with in
    my first 2 years as chairman had to deal with codes and
    standards; 2 years ago we actually were frustrated in letting
    the Department go ahead with them. Last year I think we did.
        Where are you on lighting and appliance standards? Is the
    cooperation in the private sector sufficient now so that
    they're no longer going to resist? Where are we there? I find
    this to be an extremely important area. I would like to
    continue it, but, again, are we making some real progress and
    is it a cooperative progress?
        Secretary Pena. Mr. Chairman, I've been advised that 1 year
    or so ago the Department made extraordinary efforts to develop
    a much more cooperative working relationship with, in
    particular, the large manufacturing companies that are the
    subject of these standards and that a new relationship has been
    established. I think that was tested a year or so ago on the
    new refrigerator standard, which is still in discussion at the
    moment.
        I want to say that I have had some experience with this new
    approach in what we call the negotiated rulemaking process, and
    I would hope that we could establish a constructive
    relationship with the private sector to agree on a public
    policy objective, a public policy goal, and then find a way to
    get there if at all possible in a mutually reinforcing and
    positive manner. I think that is a far more constructive way of
    dealing with these issues.
        The President has asked us to be more creative in doing
    these rulemakings contrasted to the old process of simply
    publishing a rulemaking, having comments come in, and then
    finally issuing a final rule which may or may not be the
    appropriate thing to do.
        So we want to work on this, obviously keeping in mind the
    important public policy objectives, but I think there is room
    for a very constructive relationship that we can establish with
    the private sector.
        Senator Gorton. At this point, Senator Dorgan is a new
    member of the committee, of the subcommittee, and a welcome
    one. I have a bunch of questions, Senator Dorgan. I want to
    give you an opportunity either to make a statement or to ask
    your questions now, and then stay as long as you want. I think
    it was just before you came in that I passed out these charts
    that I hope will help you understand the relationship between
    or among all of the various programs. I know it has been very
    helpful to me.

                           remarks of senator dorgan

        Senator Dorgan. Mr. Chairman, I have a Commerce Committee
    hearing going on. That is why I was delayed, and I have to go
    back as well, but I appreciate being here. I am going to enjoy
    being a part of this subcommittee, and I appreciate having the
    opportunity to visit with the Secretary at this hearing.
        You showed me this chart last year, and I found it
    enormously interesting and helpful. This is the only chart of
    its kind that I have seen that actually describes in bar graph
    form exactly what we are spending and how we are spending it. I
    think it is very useful.
        I would just like to say that I'm a newcomer to this
    subcommittee and a newcomer to the issue of priorities in these
    areas, but I really think that the fossil fuels research area
    is one account that we would want to beef up, not reduce, given
    the challenges we face and given the circumstances that exist
    in our country.
        We have in North Dakota an example of a wonderful facility,
    the Energy and Environmental Research Center at the University
    of North Dakota, which I think is almost the model in the
    country of the partnership in public sector-private sector
    research, and I'll be visiting with the subcommittee about
    that.
        I hope as we work through this and establish our priorities
    here in Congress that we will find a way to enhance rather than
    retreat on the issue of fossil fuels research. I know that
    we're faced with enormous challenges in every part of the
    budget. There isn't any question about that. But this is an
    area that truly is a critically important investment, and so I
    would hope that it would be the priority.
        Again, I missed the presentation by the Secretary. I wish
    the Secretary well in this new job and I look forward to
    working with him very much on a wide range of issues.

                               prepared statement

        Mr. Chairman, thank you very much for this instructive
    chart as we move ahead.
        Let me just ask unanimous consent to have my statement
    inserted into the record.
        Senator Gorton. Without objection.
        [The statement follows:]

                      Prepared Statement of Senator Dorgan

        Mr. Chairman, Senator Byrd and other members of the
    Subcommittee. Since this is my first hearing as a member of the
    Interior Appropriations Subcommittee, I want all of you to know
    that I am very pleased with this assignment and I look forward
    to working with all of you in the days and months ahead.
        As I familiarize myself with the many agencies and programs
    funded in the Interior appropriations bill, I have able mentors
    in the Chairman and ranking member. I would like to note that
    many of the funding decisions made by this subcommittee will
    have a direct impact on the health and economic welfare of the
    people of North Dakota, and I look forward to working with you
    on a host of crucial issues affecting my State as the
    appropriations process proceeds.
        I would also like to welcome Secretary Pena to his first
    subcommittee hearing as Secretary of Energy and to congratulate
    him on his confirmation by a vote of 99-1 just yesterday. I
    look forward to working with you, Mr. Secretary, as you assume
    your new responsibilities as the head of the Department of
    Energy and I wish you well as you take over your new
    responsibilities.
        I would like to take a minute to make a few general
    comments on the proposed fiscal year 1998 funding levels for
    the Department for Interior before I address the items to be
    covered in today's hearing. While I am pleased that the total
    budget request of $7.5 billion for the Department of the
    Interior represents an increase of $462 million over last
    year's enacted level, it is still less than the 1994 level.
    Like most agencies, the Department of the Interior has had to
    learn to live with downsizing. While we all support the concept
    of streamlining--of doing more with less--we must make certain
    that we are not sacrificing long term policy interests for
    short term budgetary goals.
        There are many high priority programs funded by the
    Department of Interior ranging from our national parks to
    wildlife refuges to our cultural institutions, all of which, in
    my view, deserve continued government support. I know hard
    choices have to be made in this era of shrinking federal
    resources, but those decisions are particularly difficult in a
    bill which funds so many meritorious programs.
        Before I leave the topic of the Interior budget in general,
    I want to advise the subcommittee of one area of real and deep
    personal concern to me, namely, a woefully underfunded budget
    for Native Americans. The ever shrinking resources allocated to
    Native Americans are, in my view, a national tragedy and a
    national disgrace, and I will address this matter in more
    detail at the April hearing.
        Fossil energy research and development within the
    Department of Energy, which is funded in the Interior
    appropriations bill, is the topic of today's hearing. This is
    an extremely important issue for the people of North Dakota and
    the nation. Since 85 percent of our national energy fuel
    consumption currently comes from fossil fuels and will remain
    our primary energy source far into the future, it is in all our
    best interests to ensure that fossil fuels energy is both
    efficient and environmentally safe. It seems strange to me,
    therefore, that the Department of Energy's Fossil Energy
    Research and Development Program funded in the Interior
    Appropriations bill is slated for a significant reduction in
    fiscal year 1998, from $365.8 million to $346.4 million.
        I realize that I am a newcomer to this subcommittee, but I
    would think that fossil fuels research is one account we would
    want to beef up, not reduce. I know Senator Byrd has a
    longstanding interest in this matter, but I want the
    subcommittee to know that North Dakota also produces a
    significant amount of coal so this program is of great interest
    to me as well.
        On a happier note, I would like to take just a few minutes
    of the Committee's time to talk about the outstanding fossil
    fuel and energy research that is being conducted by the Energy
    and Environmental Research Center (EERC) at the University of
    North Dakota under DOE's Cooperative Research and Development
    program. We in North Dakota are extremely proud of the high-
    quality work being produced by the EERC, and I am pleased that
    the President has recognized the EERC's contribution to the
    research and development of clean and efficient energy
    technologies by requesting $1.96 million for EERC under the
    Jointly Sponsored Research Program (JSRP). The JSRP combines
    DOE and private sector support for commercialization of
    advanced technologies. Commercialization of cutting edge
    technologies is the key to our energy security, improved
    efficiency and environmental health and safety, and this
    partnership between government and industry is crucial if we
    are to be successful.
        This JSRP program is complemented by a basic research
    component devoted to research on innovative concepts which have
    commercial potential as well as scientific and engineering
    fundamentals targeted to overcoming commercialization barriers.
    Unfortunately, the Department's budget request did not include
    funding for this basic research component.
        I am pleased, however, to see that the Department's request
    included $1.86 million for cost-shared coal related research
    that is approved by DOE and is consistent with the Fossil
    Energy mission. I am somewhat concerned and puzzled as to why
    this research program does not include oil and gas research,
    given both the EERC's programmatic expertise in these areas as
    well as the fact that Fossil Energy's mission includes oil,
    coal and gas.
        The EERC is a leading U.S. Center for Excellence in coal,
    oil, and gas technologies, placing particular emphasis on low-
    rank coals found in the western United States, Alaska, Central
    Europe, Australia, Russia, China, and Indonesia. Low-rank coals
    represent approximately half of the coal reserves in the lower
    48 States, with much larger potential reserves in Alaska. The
    EERC is uniquely designed to combine cutting-edge basic and
    applied research with market forces to advance the goal of
    supplying clean and secure energy to sustain a high standard of
    living in an unpolluted environment and in increasingly
    competitive marketplace.
        The technologies that are being successfully developed by
    the EERC would simply not be possible without some government
    assistance. Government support plays a vital role in the
    initial stages of research and development by fostering basic
    research that is not immediately rewarded in the marketplace.
    But government must have partners if the basic research is
    going to move forward to development, demonstration and
    ultimately to commercialization. That is the beauty of the DOE
    Cooperative agreement. After the basic research identifies
    promising new technologies, DOE works with industry to resolve
    the intractable barriers to full commercialization of
    technologies that will lead to more efficient and
    environmentally safe fossil fuel energy. Government doesn't
    pick the winners, the marketplace does.
        I am attaching to this statement some examples of projects
    developed by the EERC through both the basic and jointly
    sponsored research components of the DOE Cooperative Agreement
    which I hope the subcommittee will find of interest. I hope
    these examples will convince the subcommittee of the
    exceptional work being performed by the EERC and that the
    subcommittee will fully fund the Administration's fiscal year
    1998 request for EERC of $3.8 million.
        I have a number of questions which I have not been able to
    ask today and I would request that they be submitted for the
    record.
        Again, I want to thank the Chairman and Ranking Member for
    their patience.
                                    ------

      Examples of EERC Projects Funded Under the DOE Cooperative Agreement

                                 basic research

        Combustion 2000: A high performance power system is being
    developed and demonstrated by the EERC in partnership with
    industry and the DOE which will provide a strong leap forward
    in the performance of coal-fired powerplants. The EERC has
    teamed up with United Technologies in developing technology for
    indirect firing of coal in a gas turbine combined-cycle system,
    with construction nearing completion on a pilot slagging
    combustor and high-temperature alloy heat exchanger at the
    EERC. This system will increase thermal efficiency from 33
    percent to 47 percent while reducing emissions by 90 percent as
    well as reducing the costs of electricity. If this system were
    to replace existing systems, it would reduce by one-fourth the
    current carbon dioxide emissions from coal-fired utility
    boilers.
        Trace Element Emissions: Trace elements plug hot-gas
    filters, poison fuel cells, and pollute the environment. This
    EERC project provides an understanding, for the first time, of
    the release, transformation, emission and capture of trace
    elements in advanced coal gasification systems. Results have
    been incorporated in a computer code that is being used by
    industry to understand and predict the fate of trace elements
    in gasification systems and to optimize operating conditions
    and the design of hot-gas filtering systems to minimize
    plugging, improve reliability and efficiency, and lower
    emissions.

                           jointly sponsored research

        Advanced Gasification and Hot-Gas Cleanup: The EERC is
    currently playing a key role in demonstrating an advanced
    fossil fuel gasification and hot-gas cleanup technology based
    on the M.W. Kellogg transport reactor, a sophisticated high-
    velocity circulating gasifier. Once commercialized, this
    combined-cycle technology will substantially decrease the
    emission of sulfur, particulate, and nitrogen species and, by
    improving efficiency, reduce the release of carbon dioxide
    which contributes to global warming. This program involves a
    large number of domestic and foreign participants.
        Coal Ash Behavior in Reducing Environments: Ash and slag
    have severe impacts on the performance and reliability of
    advanced coal gasifiers as well as environmental control
    systems. This two-phased program, also supported by a large
    number of foreign and domestic energy companies, is developing
    methods to improve gasifier design and operating procedures and
    to minimize emissions. It has received significant
    international attention because of its contribution to
    improving advanced gasification systems that are being exported
    outside of the United States.
        Freeze-Thaw/Evaporation Process to Treat Oil and Gas
    Produced Waters: Eighty percent of the waste resulting from the
    production of oil and gas in the United States is saline water.
    A demonstration project jointly conducted by the EERC and B.C.
    Technologies (BCT) has demonstrated the economic advantage of
    coupling a natural freeze crystallization process with
    evaporation to reduce dramatically the volume of saline
    wastewaters and produce water for beneficial use. This process
    has been successfully demonstrated by the EERC and BCT over the
    past 2 years with the Amoco Production Company and the Gas
    Research Institute at a commercial Amoco Production Company
    coalbed methane facility in New Mexico. This process has the
    potential to increase domestic oil and gas production by
    extending the economic life of marginal wells and opening new
    reserves in areas where high volumes of produced water have
    prevented economic production. It also has the potential to
    help meet a global need for the desalinization of water to meet
    the demands of an ever expanding population base.
        The Alaska Initiative: This initiative, managed by the EERC
    for DOE's Federal Energy Technology Center (FETC), provides a
    working affiliation under which DOE and Alaskan partners are
    demonstrating new technologies to meet the current and future
    needs of Alaska in an environmentally acceptable way. This
    activity has two distinct focuses: (1) the relocation of an
    existing Clean Coal Technology demonstration project, and (2)
    demonstration of remote-site power technologies. A number of
    milestones have already been achieved.
        Clean Coal Demonstration: This project has already been
    relocated from Easton, Maryland to Fairbanks, Alaska. The
    partnership is currently working to finalize the nonfederal
    funding that must be in place by July 1997. Successful
    completion of this demonstration activity will meet the
    University of Alaska (Fairbanks) need for additional energy
    using indigenous fuels, reduce dependence on diesel fuel,
    create a new research focus at the University, create export
    potential for Alaskan coal resources, and create a showcase
    project with international appeal. This coal-water fuel
    technology under demonstration was developed under Cooperative
    Agreement.
        Remote-Site Power Generation: The use of indigenous
    resources in remote areas for power generation offers a
    worldwide opportunity. The feasibility of applying fluidized-
    bed combustion technology to meet the power needs of the
    village of McGrath, Alaska, using indigenous fuels will be
    determined by April 1997. The EERC is coordinating the
    assessment evaluating local fuel resources, including coal,
    municipal solid waste, and biomass (wood), as a replacement for
    the fuel oil currently used for electrical generation and
    heating in this village. This showcase project, if successful,
    will lead to commercializing this remote-site power generation
    technology worldwide.
        An assessment is also underway to evaluate the feasibility
    of a demonstration project in interior Alaska to use coalbed
    methane in a fuel cell to provide electricity for remote
    villages. EERC's project currently underway in New Mexico is
    proving coalbed methane produced waters can be cleaned in a
    cost effective manner. Successful completion of this
    demonstration will result in superclean and efficient
    electricity production using local resources and creating local
    jobs.

                        clean coal technology rescission

        Senator Gorton. Senator Byrd, since I wasn't here on time,
    did you ask about and get sufficient answers to questions on
    clean coal technology and rescissions?
        Senator Byrd. Mr. Chairman, I asked some questions, but I
    indicated that I had a good many additional ones that I would
    just submit for the record, and so I do not propose to ask any
    more questions now. I just want to thank you for your being so
    courteous, as always.
        Mr. Secretary, let me add before I leave, I was chairman of
    this subcommittee for several years, and Senator Gorton has
    mastered the details of it in 2 years. As a matter of fact, he
    mastered the details in the first year far more than I had ever
    been able to accomplish, and he's been a very energetic and I
    would say accomplished and competent chairman and as far as I
    have been able to determine in my membership here, he is just
    what--you get just what you see. He is right upfront and frank,
    and I am glad to have him as my chairman of this subcommittee.
        If we have to have a chairman of the other party, I will
    buy this one any day and anywhere. I close by saying I know you
    are going to have a good relationship with our chairman and our
    committee, and this bright new member over here, Senator
    Dorgan, he is one of the shining new stars in our Senate.
        I am not just passing out compliments today, but I have
    long ago come to the conclusion if you have got some good
    things to say, do not hesitate to say them about people, and
    say them right upfront, and if you cannot say good things, why,
    do not say anything until you have to, and then say it loud and
    clear.

                       federal energy management program

        Senator Gorton. That is great advice. I thank you very
    kindly, Senator Byrd. I hope I can live up both to that
    reputation and to your advice about how to deal with other
    people.
        Again, Mr. Secretary, a few more questions before we submit
    a significant number to you in writing. Cooperation and support
    that you are getting from other agencies on energy management,
    can you comment on that? Are there some that are doing well and
    some that are doing poorly and how do you set your priorities
    when you have to deal with your equals in other agencies and
    attempt to persuade them to help you with your mission?
        Secretary Pena. Mr. Chairman, I believe that the other
    department heads know that this is an important matter, and the
    President has made it a priority. I look forward now that I
    have the primary responsibility among the other Cabinet members
    in encouraging them to also act and take more appropriate steps
    here to work with them to be much more aggressive and more
    thoughtful about how all of the departments can focus on energy
    efficiency, so that's something I think we can do. We've made
    some improvements already, but I think there's much more that
    can be done.
        As I begin to elevate the discussion within the
    administration on this priority of developing an energy
    independent strategy, which I have talked to the President
    about, I believe that that particular issue you've raised will
    take on a bigger importance because, after all, the Federal
    Government is one of the biggest users of energy in our
    country, among the various players who use energy, and so we
    have a responsibility to lead if we're going to work with the
    private sector and others to encourage them to take some steps.

                          epa standard on particulates

        Senator Gorton. Another subject in which I am sure Senator
    Byrd will be interested in as well--the new proposed
    Environmental Protection Agency standards on particulate
    matter, coupled with what seems to be a less than robust
    support for research and development on some of the very
    technologies that may be essential if we are ever to impose
    such standards. Do you think that the two are realistically
    related to one another?
        Do you have any degree of confidence that we are going to
    have advanced our technology sufficiently to meet these
    standards, if they are actually imposed, without tremendous
    economic dislocations?
        Secretary Pena. Mr. Chairman, I can't answer that question
    today. I can't answer it yet. Obviously, in the months to come
    all of the departments will be engaged in an administrationwide
    effort looking at these new proposals, and the question you
    have raised is obviously one that we're going to put on the
    front burner.
        So hopefully in the next several months I'll be able to
    answer your question much more specifically. But obviously
    there are concerns about whether or not we're going to have
    enough investment in those technologies that will help us meet
    those goals, and that is something that, since I am new to the
    Department, I will need to focus on very, very quickly.
        Senator Gorton. That is going to be really important. We
    have how long, do you remember, Senator Byrd, to determine
    whether or not we would approve or disapprove of those
    regulations? Aren't they due out in June?
        Senator Byrd. I do not recall.
        Senator Gorton. When is that?
        Secretary Pena. I believe you're correct, Mr. Chairman. I
    think the final rules would come out some time in June, at
    least under the current schedule.
        Senator Gorton. Well, any help you can give us in your
    predictions as to whether or not the society is realistically
    going to be able to meet them, and what contribution our
    research and development will make to being able to meet them,
    I think is going to be very important because I strongly
    suspect we are going to be debating that issue here in
    Congress, don't you?
        Senator Byrd. Yes; I bet we will.

                             arthur d. little study

        Senator Gorton. Some time ago Arthur D. Little performed an
    analysis of the Department's quality metrics. It seemed to show
    an overestimation of some of the programs that were funded in
    this bill. Do you have a response to that study and, if so, is
    that response in any way reflected in this budget request?
        Secretary Pena. Mr. Chairman, I have not had a chance to
    review that Arthur D. Little study, but Dr. Romm would like to
    make a comment on that, with your permission.
        Senator Gorton. Fine. Yes.
        Mr. Romm. Yes; there's been some confusion in the press.
    That study was actually commissioned by the Department of
    Energy, it was commissioned by my program, in particular, as a
    peer review for our estimates of what the benefits of our
    programs would be so that we could present the most accurate
    estimates to Congress as possible.
        The fiscal 1998 budget request that you have in front of
    you reflects all of those peer reviewed analyses, and Arthur D.
    Little wrote a letter, in particular, praising the Department
    for pursuing an independent peer review of its benefit claims,
    and at every point in time we have attempted to present as
    accurate information as possible about the energy and
    environmental benefits of our programs.

                  partnership for a new generation of vehicles

        Senator Gorton. Another subject, and I am going to ask this
    in general terms, as Bruce Evans has written a number of
    specific questions which you can deal with in writing. I have
    become increasingly interested, and I think obviously the
    country is becoming increasingly interested in the research and
    development of alternative engines for automobiles--
    electricity--I cannot remember the proper name, but the
    flywheel technology and different forms of diesel and the like.
        Could you give me an overview of that research and
    development and perhaps say where you think we might be fairly
    close to a breakthrough, and what the future in the next half
    dozen years looks like given the contribution of your funded
    research and development? Any of the technologies seem to you
    particularly significant?
        Secretary Pena. Mr. Chairman, I would be happy to. Probably
    the area where we believe we will see the most significant
    advancement is in the Partnership for a New Generation Vehicle
    Program that we started a couple years ago.
        While it had, I must say, a somewhat rocky start, I would
    say that today the program is working quite well. The
    Department of Commerce is the overall lead of that program, but
    the Department of Energy is the technical leader of that
    program. Our goal is to produce a new car that is three times
    more efficient than cars today, that perhaps can do 80 miles
    per gallon in terms of efficiency by about 2002.
        Mr. Romm. 2004.
        Secretary Pena. 2004. Thus far what is very positive about
    this relationship.
        Senator Gorton. 2002 just seems to be a magic year. It
    seems to just sort of drop off my lips every time whether it is
    relevant or not.
        Secretary Pena. It's supposed to be, I think, a 10-year
    program, but we're already beginning to see some products.
    Chrysler very recently announced a new fuel cell that was a
    byproduct of the work we were doing jointly with the
    partnership. This is a fuel cell that will be able to take
    ethylene, ethanol, methanol, almost any fuel and have a fuel
    cell that operates in an effective fashion, and they rolled out
    that new technology.
        So we believe there is great promise here. It is, I think,
    so likely that 2 years ago when I participated in the European
    ministers conference where I represented the Department of
    Transportation from the United States, our counterparts in
    Europe were so fascinated about the relationship we had
    established here that they are now doing the same thing, and
    establishing a partnership with their automakers to see if they
    can also produce a new car of the next century.
        I think this is the area where we will see the greatest
    promise and thus far I think all the parties to this have
    worked very well. We're matching our investments one to one. We
    are basically on target. Mary Good, as you know, is the overall
    coordinator of this, but our Department is there working hard
    to make sure we're meeting our milestones.
        So that is one example of where Government and the private
    sector can work together for a public good, for an enormously
    important objective given the tremendous use that
    transportation plays in terms of consumption of oil, about 70
    percent from transportation.
        So we know that on this issue of energy independence,
    unless we tackle and address the transportation part of this,
    it will be very difficult for us to make substantial gains in
    the next century. So I think that's one example of a program
    that's working well.
        Senator Gorton. Is there any implication in your answer
    that we are spreading our efforts across too many alternative
    technologies and too thinly, and that we should concentrate on
    one? Or are we still at an early enough stage that we ought to
    be going down a number of alleys, hoping that at least one of
    them is not a dead end?
        Secretary Pena. Mr. Chairman, at least on this program, and
    that is the development of a new car, a new engine, as you
    describe it, this is the focus, and we are all concentrating
    our resources and our time and our energy on it, and again,
    this is a very significant public-private relationship, one
    that is unique in the world.
        I think that given the growing confidence that we have
    established among the parties, some of the early milestones and
    some of the byproducts that are developed already, that both
    industry and the Government are developing even a higher degree
    of confidence in the work that we're doing.
        It's difficult. There's no question about that. But I think
    so long as we continue to be partners by bringing the Federal
    commitment to the table, the private sector will do the same,
    and I think we may surprise a lot of people when we can produce
    that new car in the next century.

                    home energy rating system pilot program

        Senator Gorton. You will certainly please a lot of people
    if you succeed in doing that.
        One small request that you have in your budget here, the
    home energy rating system pilot program in seven States. How
    long have the pilots gone on? How long will the pilots continue
    to go on? Are we getting anything out of it?
        Secretary Pena. If this is, Mr. Chairman, the program where
    we're going to rate homes, there are a number of States beyond
    the seven that already have State programs. I think it's 20 or
    so. So from our perspective, we are continuing to work on this
    program to determine if we should have a national effort here
    in rating the efficiency of homes, if that's the subject matter
    you're asking about. Let me have Dr. Romm amplify that
        Mr. Romm. If you're speaking of the seven pilot States, the
    pilots are scheduled to go for about 2 years, and I think on
    average they have gone on about 1 year, so those pilots would
    be expected to continue for only about 1 more year.
        Senator Gorton. Will there be more pilots after that?
        Mr. Romm. If funding permits, basically.
        Senator Gorton. Just tell me in general terms what you
    think your most important functions are with respect to natural
    resources, mining and the like, your natural gas programs,
    methane programs and coal mines, and the like.
        Secretary Pena. Mr. Chairman, there are a number of
    priorities. For example, slant well drilling has already been
    successful and tested in a number of States where we have been
    able to generate very significant increases in output in wells
    that were essentially inefficient and almost ready to be
    abandoned.
        Our 3-D seismic technology program has been extraordinarily
    successful and now there's a question whether we should move to
    a 4-D seismic technology program. There are a number of
    technologies like that which we think have already been quite
    helpful.
        I think where we want to continue to place emphasis is in
    working very closely with the independent producers. These are
    essentially the small companies, the small operations that are
    only in the production phase. They're not in marketing. They
    are not in other aspects of that, and since they play such an
    important role in production, we think that by working more
    closely with them and sharing that technology, providing
    advice, we can make them even more efficient.
        We are very concerned about the fact that we are losing
    about 16,000 to 17,000 marginal wells a year. That I think is
    not good news, and so that is a very high priority if we can
    find a way to help those small firms be more productive and
    stay in business and continue to produce. So in that area, I
    think that is a very high priority for the Department of
    Energy.

                        arctic national wildlife refuge

        Senator Gorton. The quest for energy independence has not
    caused you to begin to reconsider your position on ANWR, I take
    it?
        Secretary Pena. Mr. Chairman, as you know, the President
    had established a position on ANWR sometime ago, and the
    administration position has not changed.
        Senator Gorton. Let me just ask an open-ended question. We
    have a full series of questions on specific programs here that
    we will submit to you in writing, but what have I omitted? What
    area would you like me to focus on or know something about that
    has not been discussed here this afternoon? Do you have any
    last set of messages that you or any of your staff would like
    to leave with me?
        Secretary Pena. In reviewing, Mr. Chairman, all the
    questions we covered today from fossil energy to energy
    efficiency, we didn't cover the Energy Information
    Administration but that work is superior. Let me turn to my
    colleagues here and ask, are there any other matters that they
    suggest we pursue?
        I think we've covered the high points, Mr. Chairman, so we
    look forward to working with you and to answering the very
    specific questions that the subcommittee members would like to
    submit to us.
        We're very much aware of the budgetary challenges that we
    all face, but let me say that this area of research and
    development, and even though it is a small portion of your
    portfolio here, is critical to our country, and while it may
    not receive the kind of constant support in terms of at least
    vocal expression as you see in other areas, I will make a
    significant effort to elevate the importance of the work we do
    in this area to the country.
        The American people need to understand that we are facing a
    very significant challenge, and this is the time to do
    something about it and not wait until the year 2004 or 2005
    when it might be too late.
        It seems to me that I have the responsibility, given the
    fact that I have the knowledge to help educate the American
    people to help educate other Members of Congress about the
    importance of these kinds of programs. Otherwise we are going
    to have a very significant problem, I believe, in the next
    century if we're not careful and prudent in how we conduct
    ourselves now.
        Senator Gorton. Well, Mr. Secretary, you are a very quick
    study for the first day in office. You get an A for this
    performance.
        Secretary Pena. You're very kind.
        Senator Gorton. I hope we continue to work together
    constructively when the questions get tougher and more
    difficult, as I am afraid they will as this year goes on, but
    thank you very much for your coming and for your
    forthrightness.
        Secretary Pena. Thank you, Mr. Chairman.

                         Additional committee questions

        Senator Gorton. There will be some additional questions
    which will be submitted for your response in the record.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing.]
                         Additional Committee Questions
                        electric industry restructuring
        Question. As a member of the Energy and Natural Resources
    Committee, I spent this morning in another of a series of workshops
    that the Committee is holding on electric industry restructuring. It is
    a highly complex issue about which the Committee, and the Senate as a
    whole, is trying to educate itself. Perhaps you can help us in this
    regard on one aspect of the issue.
        In my tenure as chairman of this subcommittee, I have heard from
    both the Department and from industry that private sector funding for
    energy R&D is becoming more scarce as companies seek to reduce costs in
    order to survive in increasingly competitive and deregulated markets.
    Both the Department and industry have argued that this makes Federal
    R&D support more critical.
        At the same time, uncertainty generated by market restructuring has
    made utilities wary of making major capital investments in new power
    generation, particularly if there are technological risks associated
    with the technology involved. As a result, it seems that several
    technologies developed with DOE support will be slow to be deployed in
    domestic markets.
        I also understand that some states have recognized the relationship
    between deregulation and energy R&D, and have established R&D funds to
    assist in the development and commercialization of innovative,
    ``clean'' technologies.
        How do you view the relationship between changes currently taking
    place in the electric industry and the R&D programs funded by this
    subcommittee?
        Answer. The transition to competition in the industry will have
    near-term and long-term impacts on R&D programs. For the near term,
    utilities are already anticipating the transition to competition. Many
    companies are focusing intensively on reducing their costs, including
    research costs, and are making deep cuts, sometimes to survive and
    sometimes to gain market share. In either case, R&D is often seen as a
    non-vital expenditure, except for projects that promise immediate cost
    savings for the company. As a result, corporate commitments to internal
    R&D and to joint efforts with the Electric Power Research Institute
    (EPRI) are declining. Virtually all research sectors have been
    adversely affected, but some have been hit harder than others. R&D
    pertaining to program areas that have historically led to higher
    utility costs, such as energy efficiency and renewable generation, has
    been cut severely, while R&D that could reduce costs in more mainstream
    areas of utility operations has probably been less affected.
        For the long term, we expect that those utility companies that
    survive the transition to competition will eventually feel comfortable
    enough about their future to resume some of their R&D efforts. However,
    we also think that the nature of the R&D utilities support will change.
    Utilities will emphasize R&D on consumer products and marketing, and
    less on basic research and pre-commercial technologies. Today, electric
    utilities cooperate on R&D, but increasingly, companies will be
    reluctant to commit funds to R&D that could benefit a competitor just
    as much as themselves. The industry may rely more on generating
    technology R&D funded by equipment suppliers in the future. R&D related
    to ``public goods,'' such as environmental protection and reliability,
    may be more difficult to support in a competitive industry.
        Question. If Congress acts on deregulation legislation, how can it
    best ensure that U.S. leadership in energy R&D is maintained?
        Answer. One potentially effective way to ensure that U.S.
    leadership is maintained is to include in the legislation a provision
    to establish a reliable and predictable mechanism for funding
    electricity-related R&D.
        Question. Does the Administration intend to address this issue
    directly in the legislation it is developing? If so, how?
        Answer. The Department believes that funding for research and
    development should be addressed in restructuring legislation. One
    option that might be considered would be to establish a federal/state
    system benefit fund that would fund state-level R&D programs, as well
    as other state-level public benefits programs such as universal
    service, conservation programs, and support for renewable technologies.
    The Federal part of the fund might be funded through a charge (capped
    at one mill/kilowatt-hour) on all generation sold into the bulk power
    system. States would be eligible to tap the fund to the extent that
    they raise matching funds.
                              r&d and the economy
        Question. The Executive Summary in the Energy Efficiency portion of
    the budget justification (p. 254) states that ``Since 1992, private
    industry R&D has stagnated. And today, less than one-third of private
    R&D is dedicated to research; the rest is being spent on product and
    process development.'' What is the cause of this ``stagnation'' in your
    view?
        Answer. The stagnation in private industry R&D is caused by several
    factors, including increasing international competition, the structure
    of our financial markets, and, for energy R&D, pending utility sector
    restructuring.
        The increasing globalization of international markets has led to
    increased competition among the many international players. For some
    companies to continue to be competitive in the short-term, they have
    focused on various areas to cut back on their investments, including
    personnel and long-term research and development. Many market
    structures place pressures on publicly traded companies in the U.S.,
    including the need to show positive growth each fiscal quarter. Such a
    focus on short-term pay back has a negative effect on longer-term
    investment planning such as utility research and development. In the
    case of energy-related research and development, the uncertainty due to
    the pending industry restructuring and the forecast drop in electricity
    prices has many utilities and energy industry participants also
    searching for ways to restructure themselves to be poised for
    competition. This near term market response has for many companies
    resulted in cutting back on energy R&D. Such cuts recently drew the
    comments of Kurt Yeager, President and CEO of the Electric Power
    Research Institute, who warned ``Do not let short term expenditures * *
    * sacrifice the engine of prosperity [R&D leading to innovation and
    productivity improvement] * * * entitlements cannot be paid if national
    productivity growth does not continue.''
        Question. Is it the Department's view that in the energy sector the
    Federal government must ``make up the difference'' in R&D?
        Answer. Historically, research and development in energy-related
    R&D has worked through a partnership between the energy industry and
    the Department. Public investments helped underwrite the risks of long-
    term R&D, and funded activities that helped move technologies which had
    high social returns into the market. The net effect was to stimulate
    private investments that yielded social returns to society, including
    job creation, export growth potential, and cost-effective pollution
    prevention. However, the private investment in research, development
    and deployment has decreased by more than two thirds in the past 15
    years. Restructuring and the uncertainty it creates for the market has
    accelerated this decline. In addition, Federal energy R&D has been cut
    by 75 percent since the late 1970's.
        Our fiscal year 1998 budget request would begin to put us on the
    path toward addressing this decrease on both sides of the public and
    private partnership in R&D by attempting to maintain at a minimum a
    level of Federal investment consistent with that of our international
    competitors, not increase it. The role of the Federal government and
    this investment is critical to ensure continued advances in energy
    efficiency and renewable energy technologies which would decrease our
    dependence on imported oil, increase our competitiveness, improve our
    balance of trade, and improve our national health and environmental
    quality.
        Question. Since about 1992, the economy has been growing at a
    fairly steady rate and the stock market has skyrocketed. How do you
    explain this seeming contradiction between stagnating private sector
    R&D and continuing economic growth?
        Answer. Economic growth occurs for many reasons, including national
    and international fiscal policies, domestic and international market
    condition and socio-political-economic change and disruption. Economic
    growth also tends to be cyclical in nature, with peaks and troughs.
    Much of the growth of today may be attributable to prior investment in
    our national economy, including private and public sector investments.
    In addition, some companies may be currently performing well in the
    market due to the cuts they have made in long-term investments, such as
    personnel and research and development. However, the effect of these
    short-term cuts may not be felt for several years out, even though
    investments made during economic upswings may very well carry the
    companies through economic downturns.
                                    examples
        Question. In considering funding for programs that run to the
    hundreds of millions of dollars, I think it is often helpful to have
    some specific examples of how this money is being spent. Would you
    describe for Committee some specific examples of technological advances
    that have been made in the Fossil R&D or Energy Conservation program in
    the last fiscal year?
                          energy conservation examples
        Answer. The Office of Energy Efficiency and Renewable Energy has
    been recognized globally as a leader in applied research and
    development. In this decade alone, the Office has garnered over 40
    major awards for our research, development and deployment. Some
    examples of technological advances developed by our program activities
    with labs and partners that received recognition for this past year
    include:
        The oxygen enriched air staging process which integrates two
    previously competing technologies, simultaneously reducing
    NOx emissions and energy use in the glass making process
    improving process efficiency, energy efficiency and domestic industry
    competitiveness.
        The Benchmarc Catalytic Converter using either electric preheating
    or chemical catalysis to significantly improve cold start combustion
    efficiency and significantly reducing emissions and energy waste during
    cold start in the transportation sector.
        The thin film rechargeable Lithium batteries developed with our DOE
    basic research partner, the Office of Energy Research, in which ceramic
    deposition technology is used to create battery cell layers small
    enough to create batteries ten micrometers thick that are capable of
    nearly infinite recharging. The impact of this development, while
    important for existing battery applications, is that near nano size
    technologies that previously were only contemplated are now possible,
    affordable and reliable.
        The UV Waterworks water purifier using the electricity of a
    lightbulb (40 watts) to kill waterborne pathogens responsible for
    diseases such as cholera, dysentery, and typhoid that kill millions
    every year.
                             fossil energy examples
        In the past fiscal year, examples of technological advances
    resulting from Fossil Energy's Coal and Power Systems R&D program
    include:
        Successfully demonstrating two fuel cell power plants leading to
    ultra-clean, high efficiency distributed and on-site power
    applications; demonstrating an atmospheric fluidized bed combustor at a
    Veteran's Administration (VA) Medical Center for safely and cleanly
    disposing of hospital ``red bag'' waste and using the waste to generate
    clean and cost-effective electricity on site; and operating three
    utility-scale integrated gasification combined-cycle demonstration
    power plants.
        Identifying promising, innovative technologies for cost-effective,
    ultra-clean emission controls, reflecting the culmination of over 20
    years of research and development in concert with the Clean Coal
    Technology Demonstration program, to meet future, more stringent
    emissions standards at a fraction of today's cost.
        Completing a product development unit test run on co-processing of
    waste (e.g., plastics, tires) with coal for a direct liquefaction
    process proving out favorable economics and environmental benefits;
    extending the commercialization of the Microcel technology, advanced
    microbubble fine coal cleaning technology developed over the last two
    decades, to use cleaned coal fines in power generation.
        Examples of technology advances in Fossil Energy's oil and gas
    program in the last fiscal year include: Demonstrating and transferring
    to industry, using National Lab expertise, six new geophysical imaging
    technologies that will improve exploratory well success rates from a
    current average of 40 percent to 50 percent, Demonstrating five new
    data processing and simulation methods for applying advanced computing
    technology developed by national laboratories for other government
    programs to improve domestic prospects for producing natural gas and
    oil, and
        Michigan Technological University, teaming with an operator in the
    Michigan Basin, targeted production from the Dundee Formation in the
    Crystal Field, one of 137 older fields that are nearing abandonment.
    The application of horizontal drilling strategies coupled with new
    computer modeling and analysis methods has resulted in a demonstration
    well producing at a rate of 100 barrels of oil per day, 20 times the
    best conventional well in the field. The successful results have caused
    9 new horizontal wells to be permitted for drilling in the Crystal
    Field and 20-30 additional horizontal wells to be permitted in some of
    the other fields in the basin.
                  benefits to the public--energy conservation
        Question. Can you also describe for those examples the benefits to
    the public resulting from the technology, as well as the reasons why
    the particular advance would not have occurred without Federal
    financial support?
        Answer. One example is the technology developed related to the
    glass industry. In addition to the direct and competitive benefits to
    the U.S. glass industry, this technology is one of the components of
    our Glass Vision of the Future ($100 million in customer savings by
    2000, one-half a million metric tons of carbon emissions displaced, and
    avoided consumption of more than 20 billion cubic feet of gas). Other
    work in our Industrial Technology Industries of the Future includes
    work on a Catalytic Converter. The cold start engine ignition is one of
    the least efficient combustion processes in the internal combustion
    engine, and on commuter trips it can be the equivalent of reducing
    vehicle fuel economy on the order of 1 mile per gallon. This new
    technology is one element of our advanced vehicle technologies program,
    the Partnership for a New Generation of Vehicles, which will develop a
    family sedan capable of 80 mpg without sacrifices in performance,
    safety or cost. These technologies will enable the U.S. to turn the
    corner on growing oil imports in the first decade of the 21st century
    and will result in annual consumer savings of $10 billion and
    concomitant carbon reductions of 25 million metric tonnes by the year
    2010.
        An additional example is our work on advanced batteries. The
    potential commercial impact of this development is to leapfrog current
    battery technology, with cheaper, smaller, more efficiently made and
    yet to be determined how many times more rechargeable batteries. While
    important for existing battery applications, its larger potential
    payback is that near nano size technologies that a decade ago were only
    imagined in science fiction will soon be possible, affordable and
    reliable.
        Our work on UV waterworks saves energy compared to conventional
    water treatment, where it exists. A more important contribution is that
    it makes water treatment easy and affordable and can readily be applied
    in parts of the world where it would not otherwise take place.
    Applications of the UV waterworks kill waterborne pathogens responsible
    for diseases such as cholera, dysentery, and typhoid that kill as many
    as four million children yearly.
        Funding from our budget request provides at least three value added
    components to these and all of our programs. The budget provides
    resources and incentives for a public policy component to business
    growth while providing simultaneous productivity, economic, and
    environmental benefits at equal or lower cost and certainly lower
    current and future social cost. In cases where technology adoption is
    at least potentially possible and socially desirable, Energy Efficiency
    and Renewable Energy programs accelerate a possible future providing
    the energy, environment and economic benefits much sooner than would
    have been likely and extending the life of existing hydrocarbon stocks
    for their highest value added contribution. A third element of our
    involvement and support is to provide a diverse resource pool of
    technologies that collectively maintain pressure on price and stability
    on narrowly held fuel supplies by continuously advancing energy science
    and technologies and providing a wide variety of options that are
    appropriate/competitive for many markets and could readily be
    accelerated and diffused widely if fuel prices or supply became
    unstable.
                     benefits to the public--fossil energy
        The examples in the Coal and Power Systems program have resulted in
    the following benefits. First generation fuel cells are now
    commercialized with 120 units sold. Demonstration of the advanced
    generation technology is needed to expand the commercialization of fuel
    cells for clean, quiet, flexible and portable electricity for
    distributed and on-site power generation. They can be used in areas
    where local and regional emissions have difficulty complying with air
    standards, in remote locations, and in U.S. military installations and
    facilities around the country and around the world to enhance
    operational security of these military bases. The development of a
    domestic fuel cell industry will lead to the creation of thousands of
    high value, domestic jobs through the launching of a new domestic fuel
    cell manufacturing industry. The atmospheric fluidized bed (AFB) unit
    at the VA hospital demonstrates the benefits of AFB technology as a
    safe and clean way of disposing of ``red bag'' waste while utilizing
    that waste to produce clean on-site power. The Integrated Gasification
    Combined-Cycle (IGCC) advances will lead to world sales of advanced,
    clean, high efficiency coal based power systems that can use a wide
    variety of coals. Worldwide deployment of IGCC will allow coal to be
    used cleanly with reduced emissions, contribute to stabilizing
    greenhouse gas emissions, and create thousands of domestic jobs through
    international sales.
        The latest concepts for environmental controls are the culmination
    of twenty years of R&D advances and the Clean Coal Technology
    Demonstration projects on environmental systems which have resulted in
    lower cost and more effective SO2 scrubbers for coal-fired
    power plants. Currently one-quarter of all U.S. electric capacity (77
    gigawatts) use these scrubbers which represent a reduction of $40
    billion in compliance cost according to a report done by Energetics,
    Inc. on the benefits/costs of the U.S. DOE Clean Coal RD&D program.
    While coal use for electric power generation more than doubled from
    1970 to 1995, SO2 and particulates came down by 27 percent
    and 90 percent respectively. In the same period, the average plant
    emission rate was lowered by 70 percent for SO2 and 90
    percent for particulate matter. In addition, a new generation of low
    NOx burners and post-combustion devices have been developed
    in partnership with industry. Burner sales have exceeded $750 million,
    and are projected to approach $4 billion by year 2000. Previously
    available technology would have cost an order of magnitude more to
    achieve the same NOx reduction. Sales of post-combustion
    technology (like Selective Catalytic Reduction) are projected at over
    $2.5 billion by year 2000. Previously, this technology cost twice as
    much as today's version.
        The advances in clean coal fuels technology have both environmental
    and long term energy security benefits. The tests on co-processing of
    waste with coal have confirmed the potential for favorable
    environmental and economic benefits for a direct liquefaction
    technology which can address the long standing environmental concerns
    with the large volume of waste plastics and mountains of used tires
    that continue to grow. Equally important, this technology offers an
    important option for addressing energy and oil security concern
    associated with our continued reliance on oil imports. The
    commercialization of the Microcel coal cleaning technology, being sold
    worldwide, is the culmination of research that started in 1980 and
    funded by the Federal Energy Technology Center. The benefits of this
    technology are that it provides a cost-effective means for emissions
    compliance prior to coal burning, it can use the over 2 billion tons of
    coal fines currently sitting in refuse ponds as fuel in clean power
    generation, and it is being used for various non-coal mineral
    processing applications around the world.
        Prototype devices for five geophysical imaging technologies have
    been completed and are undergoing field trials, and one technology has
    been commercialized. The exploratory well success rate has improved to
    48 percent for the first four months of 1996, and continued
    improvements are expected as new geophysical technologies, including
    those developed by DOE, are adopted by industry.
        The five new data processing and simulation methods projects
    successfully completed interim products. These improvements are
    expected to increase U.S. oil and gas production by 1 million barrels
    of oil equivalent starting in 2001. Accomplishments to date include:
    computer code that provides a three-fold acceleration for parallel
    processing of subsalt seismic data; multiphase fluid simulator for
    underbalanced drilling; publications on prototype computer model to
    predict geopressured reservoirs; prototype data server available on the
    Internet; and synthetic seismic data sets for a subsalt structure and
    an overthrust structure available for industry use in calibrating
    processing systems.
        Additional development in the Crystal Field alone is expected to
    recover 2 million barrels of oil. The redevelopment of other fields is
    anticipated to produce between 80 to 100 million additional barrels
    with an anticipated tax revenue of about $210 million.
                              performance measures
        Question. In reviewing the Energy R&D budget, it appears as if the
    Department has a program in virtually every area where there is a
    potential for energy savings (buildings, transportation, power
    systems). Is it possible that the Department is striving too hard to
    maintain a program in every energy ``niche'' without taking a hard look
    at the energy conservation benefits derived from these programs?
        Answer. Energy conservation, fuel diversity, social and economic
    benefits to consumers and business, public needs, and the longer-term
    are all integral to our portfolio--we strive for an energy portfolio
    that is sustainable. While striving for sustainability and diversity in
    fuel and efficiency technology, the Department works with industry and
    the public to develop the critical few technologies that meet their
    expected needs, satisfy their market demands and are responsive to the
    charge of government to meet social needs not addressed by commerce and
    States. The process we use is to engage the business and consumer
    public in describing a likely and desired future and to work together
    to develop a sustainable future--government focusing on the social and
    high-risk components of that vision and industry, business and the non-
    federal government/public sector focussing on their direct
    constituency. Working together we prioritize and integrate the work and
    outcomes into a solution in which the parts work together better and
    the social and economic sum is greater than the sum of the parts would
    have been. Excellent examples of this strategy and the prioritization
    of our program focus are working in our Industry of the Future
    programs, Clean Cities, the Partnership for a New Generation of
    Vehicles, and our Federal Energy Management Program. A parallel process
    in underway in our buildings programs.
        Early in technology development when the risk is high and the
    outcome/value uncertain, we solicit input from the energy community. As
    technologies mature, we add partners with social and potential business
    interests, increasing their involvement and commitments as we advance
    elements of a technology into tools that can be adopted by the public.
    This involvement improves products and provides researchers with near
    real-time feedback for improvements, next generation technologies,
    market signals of completion, and other needs to which program
    resources might more productively be spent.
        Question. The budget justification lists performance measures such
    as ``Quads of energy saved'' for each of the major program areas. Do
    you intend to use these performance measures as a tool in formulating
    departmental budgets?
        Answer. Energy saved, energy produced, energy cost savings,
    pollution prevented, results and performance and others are integral to
    the representation of our technologies and the public and internal
    dialogue used to determine allocation of resources and a balanced
    portfolio. However, portfolio balance is not limited to these
    performance measures. Portfolio balance includes considering work that
    will be performed by others, what will not be performed if we do not
    play a role, economic risk, technology risk, hedging, intergenerational
    equity, scale, need for catalysis, and many other factors. Some of
    these factors that go into considered judgment, business decisions and
    wisdom, are neither readily quantified nor even listable. Performance
    measures are integral to budget formulation but are more fundamentally
    important indicators to determine how we are doing our work, what is
    working, what needs mending, what can be emulated, what can be
    improved, setting goals, modifying plans, helping individuals measure
    the benefit of their effort and providing the public with some measure
    of what their investment has provided.
        Question. Please provide for the record a table that shows a side-
    by-side comparison of budget levels for major areas (i.e.,
    transportation, buildings) and the principal performance measures or
    ``metrics'' being used to measure program success.
        Answer. The attached table details budget levels for our major
    programs and progress and outcome metrics:

                                                  [Dollars in millions]
    ----------------------------------------------------------------------------------------------------------------
                                                                         Fiscal year 1998  Fiscal year 2010 outcomes
                 Sector               Budget     1998 progress metric   --------------------------------------------
                                                                          MMTCE    Quads        Goal and savings
    ----------------------------------------------------------------------------------------------------------------
    Industry........................    $139  Three IOF visions; 2            48      1.5  Seven visions and road
                                               signed and 1 developed.                      maps implemented, saving
                                                                                            industry $10 billion.
    Transportation..................     203  Demonstrate a 50 mpg            25       .6  An 80 mpg family sedan
                                               family concept car.                          prototype in 2004,
                                                                                            saving consumers $10
                                                                                            billion.
    Buildings, States, communities..     302  Develop a strategic             67      1.6  Implement the vision and
                                               vision for buildings,                        road map with partners,
                                               weatherize 60,000 plus                       adding +$20 billion to
                                               homes.                                       consumer savings in
                                                                                            2010.
    Federal energy management.......      31  Cut $700 million from the        1       .2  Cut government energy
                                               Government's energy bill                     consumption by 30
                                               over a 1985 baseline.                        percent by 2005 over a
                                                                                            1985 baseline.
    ----------------------------------------------------------------------------------------------------------------

                      state and local partnership programs
                             (performance measures)
        Question. The performance measures for Weatherization and the State
    Energy Conservation Program indicate that the Department expects the
    two programs in fiscal year 1998 to result in the conservation of .0014
    and .007 quads of energy, respectively. The fiscal year 1998 request
    for Weatherization is $154.1 million, the request for SECP is $37
    million. In light of the projected energy savings--which would seem to
    be the primary goal of the two programs--why is the Administration
    requesting the same increase for both programs on a percentage basis,
    and a vastly larger increase for Weatherization in absolute dollars?
        Answer. Although both the Weatherization Assistance Program and
    State Energy Program (SEP) have the goal of creating energy savings,
    and, indeed, significant returns are realized through both programs,
    the Administration's budget request takes into account the two
    different program structures. With regard to the SEP appropriation
    request, the Department has addressed some of the needs for SEP
    activities by complementing them with DOE end use conservation program
    activities which also were targeted for implementation by States,
    consistent with states' Annual State Plans under SEP. These SEP Special
    Project activities funded from other DOE conservation programs are
    expected to continue in fiscal year 1998.
        Under SEP, annual appropriations are allocated to States by formula
    and are used for program projects specified in each State's approved
    plan. SEP has consistently leveraged $4 of Petroleum Violation Escrow
    (PVE), State, local and private funds for every $1 of appropriated
    funds. The addition of SEP Special Projects has expanded the program,
    allowing States to implement State-oriented building, industrial,
    transportation and utility sector projects. Special Projects
    contributions from DOE end use programs of $11.2 million in fiscal year
    1996 and $9.8 million in fiscal year 1997 represented an increase of 38
    percent over the total of $55 million appropriated for SEP in those two
    years. SEP enables States to address both local energy priorities and
    National energy initiatives. The Administration's budget projects an
    overall energy savings of .007 quads from all sources of funding.
        In contrast, the Weatherization Program utilizes partnerships
    between State and local-level weatherization agencies. Specifically,
    DOE awards grants to States, which then award grants to the local
    agencies, usually community action agencies or other nonprofit or
    government organizations, to perform the actual services. Nearly 14
    percent of currently eligible households have received weatherization
    services. Low-income households spend about 14 percent of their annual
    income on energy vs. 3.5 percent spent by other households. The program
    provides a benefit of $2.40 for every dollar invested in Weatherization
    and leverages an additional $3.39 from other Federal, State, local, and
    private sources. Additional benefits include: improvement of
    neighborhood housing conditions, reduction of power plant emissions,
    and providing education and practice with regard to newly developed
    conservation tools, materials, and techniques. The Administration's
    1998 budget anticipates direct energy savings of .0014 quads from the
    DOE funding only. Thus, total savings from all funding sources are
    approximately three times greater.
        Question. Are we getting the biggest ``bang for the buck'' with
    this allocation of Federal dollars?
        Answer. Both the Weatherization Assistance Program and the State
    Energy Program (SEP) are cost-effective energy programs. The Department
    has recognized the impressive program impacts of SEP by utilizing it to
    implement State-oriented Special Projects in the buildings, industrial,
    transportation, and utility sectors. Special Projects contributions of
    $11.2 million in fiscal year 1996 and $9.8 million in fiscal year 1997
    from DOE end use programs represent an increase in the dollars
    allocated to SEP by 38 percent over the appropriated total of $55
    million for fiscal year 1996 and fiscal year 1997. SEP Special Projects
    funding from DOE conservation programs is expected to continue in
    fiscal year 1998.
                              energy conservation
                             arthur d. little study
        Question. Some time ago, Arthur D. Little performed an analysis of
    the Department's ``quality metrics.'' That study seemed to show that
    the Department has overestimated the benefits of many of the Energy
    Conservation programs funded in this bill. What is the Department's
    response to the Arthur D. Little study?
        Answer. The Arthur D. Little (ADL) study was used by DOE in
    formulating the fiscal year 1998 request. DOE used the most
    conservative estimates at hand while formulating the budget, and these
    estimates were very close to the final numbers arrived at by DOE with
    ADL review and assistance. While the final numbers in many cases were
    smaller than the preliminary energy savings, the benefits to the nation
    in energy productivity improvements, pollution prevention, and national
    security still demonstrate that energy efficiency and renewable energy
    technology programs are important to the nation. ADL stated ``Overall *
    * * the selection of technologies in the DOE (Energy Efficiency)
    portfolio are very reasonable. They are in line with R&D programs of
    other industrialized countries and have gained a high level of industry
    support in the U.S. The portfolio mix in the post 2000 time frame will
    place the U.S. in a highly competitive position in the coming
    decades.''
        Question. Are the results of the study reflected in the fiscal year
    1998 budget request? Have the budget requests for certain programs been
    increased or decreased in part because of this study?
        Answer. The analysis of the expected energy savings in the future
    allowed DOE management to gain an understanding of how these programs
    related to DOE's strategic goals of maximizing energy productivity,
    preventing pollution, and enhancing our energy and national security.
    The analytical information from the study informed the decision making
    process in DOE as the fiscal year 1998 budget was developed, although
    other considerations also drive the Department's investment decisions,
    including priorities of the Administration, legislative requirements,
    stakeholder assessments of market opportunity, as well as the desire to
    capture benefits that are not easily monetized such as environmental or
    national security benefits. The use of portfolio selection criteria for
    our budget decision analysis is complex, and we are not able to ascribe
    specific increases and decreases in our request directly to a single
    set of criteria.
        Question. Will the department continue to use such outside reviews
    to shape its programs and budget requests?
        Answer. Yes, this year we are planning to expand our external
    review to a broader array of experts from business, industry, academia,
    and both government and non-government public sector.
        Question. Will such reviews contribute to the Department's planing
    process pursuant to the Government Performance and Results Act?
        Answer. The Office of Energy Efficiency and Renewable Energy has
    traditionally asked for stakeholder input for developing its strategic
    plans, portfolio planning, validation of metrics and performance. In
    response to the Government Performance and Results Act we have
    broadened our measures, exposition of measures and plans, and feedback
    from the entire spectrum of the public interested in EE's plans,
    performance and outcomes.
                                 transportation
                       infrastructure, systems and safety
        Question. A significant increase is requested for Infrastructure,
    Systems and Safety. Is the entire increase attributable to commencement
    of Phase II of the corridor development program?
        Answer. The fiscal year 1998 budget for Infrastructure, Systems,
    and Safety requests a $3.1 million increase over fiscal year 1997. Of
    the increase, $2.5 million is for Phase II of a nationwide
    infrastructure and corridor development program. The additional
    $600,000 is requested to expand and refine systems and safety analysis
    of refueling, transport, and delivery infrastructure for alternative
    fuels.
        Question. Exactly what does Phase II of the program entail?
        Answer. Starting in 1995, the Department has worked with the Clean
    Cities and States to encourage private investment in refueling
    development in key regions and along key transportation corridors. We
    have supported State efforts to expand ethanol infrastructure in the
    Midwest, and liquefied natural gas corridor development in the West,
    among others. The Department's infrastructure and corridor development
    strategy encourages the use of Clean Cities as ``anchors'' in a
    strategic ``backbone'' that can dramatically increase the
    attractiveness of alternative fuels for fleets. In fiscal year 1997, we
    are launching Phase I of our nationwide program by building on the
    successes of these early pilot efforts. Phase I will involve sharing
    lessons learned; bringing local, State and regional organizations
    together to develop strategic plans for infrastructure and corridor
    development; increasing private participation; and providing grant
    funding to the States of about $1 million to catalyze infrastructure
    and corridor efforts. In fiscal year 1998, Phase II will strengthen
    that effort, provide a second-round of funding to Phase I participants,
    and expand the program to additional regions.
        Question. How many years will it take and what are the expected
    costs?
        Answer. Analytical work by the Department has indicated that the
    success of alternative fuel vehicle programs will depend in large
    measure on the availability of sufficient refueling infrastructure.
    This finding has been confirmed by fleet operators and other
    stakeholders in Departmental hearings. The Department's financial
    investment is insignificant relative to the private investment that
    must be the driving force for any significant penetration of
    alternative fuel or electric infrastructure if these fuels are to be
    competitive. However, a small but significant investment by the
    Department of $3-10 million per year for the next five years could be
    instrumental in catalyzing the growing alternative fuel market,
    supporting existing private investment, and attracting additional
    private investment.
        Question. How will monies appropriated in fiscal year 1998 be used?
        Answer. These funds will be used to catalyze Clean Cities and State
    cost-shared efforts that leverage significant private investment and
    increase the use of other Federal funding, such as Federal Highway
    funding. Infrastructure and corridor development projects typically
    include analytical work, planning, market development, public
    education, and acquisition and construction of refueling stations, of
    which the Department's funding plays a small but significant part.
        Question. What would be the impact of level funding or a much
    smaller increase?
        Answer. Level funding would not allow the Department to expand
    successful programs to other States and regions of the country,
    reducing the potential for a nationwide market for alternative fuels;
    and would not allow the Department to conduct the analyses needed to
    support an expanded market. A smaller increase than requested would
    restrict the number of regions.
                         vehicle field test/evaluation
        Question. A $1.3 million increase is requested for Vehicle Field
    Test/Evaluation, some of which will be used to acquire and test new
    electric vehicles. For whose use are these vehicles being purchased?
        Answer. The vehicles will be purchased for testing and evaluation
    by both public and private fleets. The two private organizations are
    Southern California Edison in conjunction with the California Air
    Resources Board and AAA of Southern California Systems; and Electric
    Transportation Applications in conjunction with Arizona Public Service,
    Salt River Project, Potomac Electric Power Company, and Underwriter's
    Laboratory. These two qualified vehicle test sites will purchase a
    limited number of electric vehicles for testing and evaluation on at
    least a 50 percent cost-share basis. Historically, additional utility
    expenditures increase the private cost-share percentage to well above
    50 percent. Another portion of the funds will be made available to the
    Federal agencies to procure electric vehicles in accordance with
    Executive Order 13031 for testing and evaluation within the Federal
    fleet. Operational data will be provided by the agencies to the
    Department of Energy.
        Question. Is this the first year in which funds in this activity
    will be used to actually purchase vehicles?
        Answer. No, the program has provided funds on a cost-shared basis
    to purchase several thousand electric vehicles for testing, evaluation,
    and demonstration in both public and private fleets since its start in
    1977. The program was known as the Site Operators Program until 1994.
        Question. How many vehicles will be purchased?
        Answer. The private organizations will purchase approximately 50
    electric vehicles for testing and evaluation under this program. For
    Federal agencies, the expectation is to provide sufficient funding to
    test and evaluate up to 100 electric vehicles within the Federal fleet,
    bringing the total number of electric vehicles funded by fiscal year
    1998 funds to about 150.
                          advanced battery development
        Question. $15.8 million is requested for Advanced Battery
    Development. Will the Department continue work on the mid-term nickel
    metal hydride battery in fiscal year 1998?
        Answer. The Department anticipates that the United States Advanced
    Battery Consortium will complete all work on the mid-term nickel metal
    hydride battery in fiscal year 1998.
        Question. Are fiscal year 1998 funds requested for this purpose?
        Answer. About $1.0 million is requested for fiscal year 1998.
        Question. What is the status of this development effort?
        Answer. Both development contractors are establishing the
    capability to manufacture this battery in response to market demand.
    The cost reduction programs begun in fiscal year 1996 are improving the
    ability of this technology to compete in the marketplace.
        Question. How much is requested in fiscal year 1998 for work with
    the long-term lithium-based technology team?
        Answer. The Department estimates that $12 million will be used to
    support the long-term lithium-based technology team.
        Question. If funded in fiscal year 1998 at the request level, how
    much does the Department anticipate will be required in fiscal year
    1999 for this effort?
        Answer. The Department estimates about $4 million will be required
    in fiscal year 1999 to fund currently planned efforts. It is
    anticipated that the United States Advanced Battery Consortium may
    request additional funding in fiscal year 1999 for long-term advanced
    battery development.
                           hybrid propulsion systems
        Question. $45 million is requested for Hybrid Propulsion Systems, a
    $6.15 million increase from fiscal year 1997. What would be the impact
    on program schedule if funding were held at the fiscal year 1997 level?
        Answer. Reducing the budget to the fiscal year 1997 level will not
    only hurt the base program to develop a propulsion system capable of
    achieving 50 mpg in a mid-size automobile but will also have a
    significant negative impact on the development time for technologies
    that have the potential to be used in the Partnership for a New
    Generation of Vehicles (PNGV) program that are currently under
    development in the current contracts. Some technologies are strong
    candidates to move on to the next phase, Phase II, aimed at the 80 mpg
    target. If these candidate technologies are not funded in fiscal year
    1998, the outcome will be to significantly increase the risk to achieve
    the 80 mpg fuel economy and stringent emission targets by the 2004 time
    frame because of the compressed development time. Level funding will
    also cause the current program to be extended by at least six months,
    moving the delivery of test bed vehicles into the mid-1999 time frame
    and increasing the overall cost of the program. This will delay
    obtaining important vehicle integration test data which will benefit
    solving integration issues in the Phase II program. The increased
    budget request is also directed at developing a broader supplier base
    of innovation and competition from which the automobile companies can
    draw to improve the chances for program success and reduce the risk of
    having a very limited number of suppliers on which to rely. Many
    smaller companies have unique and innovative technologies that have not
    been part of the current program. This budget request accounts for
    identifying these very promising companies whose ideas have not been
    evaluated and integrated into the existing partnership.
        Question. What if funding were increased by only half the requested
    amount?
        Answer. Reducing the budget to half the requested increase would
    impact the planned expansion of the supplier base and thus increase the
    risk for program success.
        Question. Does the Department anticipate a further increase will be
    requested in fiscal year 1999?
        Answer. Planned funding for fiscal year 1999 is expected to remain
    at the fiscal year 1998 requested level because the next phase of the
    hybrid program, Phase II, requires further efficiency improvements in
    the propulsion system and advances in vehicle systems, such as, lighter
    weight materials and reductions in accessory loads resulting from more
    efficient designs.
                           high power energy storage
        Question. The request for High Power Energy Storage nearly doubles
    to $15 million. What would be the impact on program schedule if funding
    were held at the fiscal year 1997 level?
        Answer. High power energy storage is one of the performance-
    limiting subsystems in hybrid vehicles for PNGV. High power batteries,
    ultracapacitors, and flywheels have been identified as potential energy
    storage candidates. If funding were held at fiscal year 1997 levels,
    the effort to scale up laboratory high power battery cells to 50-volt
    modules would be stretched out, and promising baseline battery
    technologies would be prematurely eliminated. This will triple the risk
    of failure; and the stretch-out would delay the fiscal year 1999 start
    of the development of the required 400-volt energy storage system for
    PNGV. Laboratory ultracapacitors will not be transitioned to industry
    for scale up. Flywheel efforts will be drastically reduced or
    eliminated. Seventy-five percent of the exploratory research aimed at
    improving power density, cycle life, and charge acceptance of the
    candidate high power technologies will be eliminated or deferred.
        Question. What if funding were increased by only half the requested
    amount?
        Answer. If only half of the increase is funded, the development
    effort to scale up one of the three laboratory high power battery
    technology options to 50-volt modules would continue on schedule for
    fiscal year 1998. Risk of failure would be reduced to double; and the
    development of the required 400-volt energy storage system would not
    begin until mid-fiscal year 1999, about a year delay. Laboratory
    ultracapacitors will not be transitioned to industry for scale up.
    Flywheel efforts will be reduced--delaying the development of models
    and a safe containment system. This would move flywheels out of the
    PNGV time frame. Fifty percent of the exploratory research aimed at
    improving power density, cycle life, and charge acceptance of the
    candidate high power technologies will be eliminated or deferred.
        Question. Does it make sense to consider the requested increases
    for this activity and for Hybrid Propulsion Systems in tandem, i.e.,
    should any increases provided be proportional?
        Answer. No, it does not make sense to consider the requested
    increases for this activity and for Hybrid Propulsion Systems in
    tandem. The development of the high power energy storage system is not
    paced by the development activity of the hybrid propulsion system, but
    rather by the considerable research and development effort that is
    required to mature the energy storage technology from potential
    laboratory-scale devices to full-size, 400-volt energy storage systems.
    Since this development effort is a long-lead, critical component R&D
    item for a viable hybrid propulsion system, the development effort
    needs to be accelerated with additional resources. Its funding should
    be considered as a separate activity that is required for the
    development of hybrid vehicles.
                                 fuel cell r&d
        Question. Within the request for Fuel Cell R&D, there is a
    significant shift away from Systems Development and towards Component,
    Reformer and Storage R&D. What is the reason for this shift?
        Answer. The previously funded system efforts with General Motors,
    Ford, and Chrysler-Pentastar have been successful in identifying system
    level requirements and research challenges associated with the
    components which make up a fuel cell system for automotive
    applications. Therefore, the shift reflects the program's emphasis on
    working directly with fuel cell suppliers for the development of an on-
    board fuel-flexible fuel processor capable of operating on gasoline,
    methanol, ethanol, or natural gas. Previous research and development
    has identified key barriers to this technology which will be addressed,
    i.e., improved carbon monoxide clean-up devices; compact, efficient
    heat exchangers; and integrated fuel processor components (fuel
    purification system, heat exchangers, controls and sensors), into a
    vehicle-ready 50 kW system capable of rapid start-up and fast transient
    response. In addition, increased component R&D is necessary to reduce
    size, weight, and cost of the current fuel cell stack for automotive
    applications. R&D activities will focus on membrane-electrode
    assemblies using lower platinum loadings or non-platinum catalysts;
    low-cost, lightweight bipolar plates; high efficiency, compact
    compressors; and materials/processes amenable to low-cost, high-volume
    manufacturing. The system effort in the out years may increase to
    address R&D challenges associated with integration of the 50 kW fuel-
    flexible fuel cell system into a vehicle. Plans are that vehicle
    integration efforts would be done at 50-50 cost share.
        Question. Does the Department anticipate requesting a further
    increase for Fuel Cell R&D in fiscal year 1999 if funded at the request
    level in fiscal year 1998?
        Answer. The fiscal year 1999 request will depend on the current
    progress of the program. If fuel processor and fuel cell stack R&D
    activities are successful, additional funds will be needed for
    validation of these technologies in integrated fuel cell systems, and
    for testing these systems under normal drive cycles and required
    operating conditions (e.g., start up at 40 deg.  C) in a test bed
    vehicle. If key technical targets for fuel processor and fuel cell
    component technologies are not achieved, a sustained funding at the
    fiscal year 1998 level will be required to accomplish the R&D
    challenges associated with these major components.
        Question. What does the Department make of recent demonstrations of
    fuel cell vehicles by foreign automobile manufacturers?
        Answer. The recent demonstrations of fuel cell vehicles by Daimler-
    Benz and Toyota indicate to the Department that the potential benefits
    of fuel cell technology are clearly recognized worldwide. Furthermore,
    it also indicates that the promise of fuel cells is sufficiently bright
    that private industry, in partnership with government, is committed to
    sharing in the costs of future research needs. On the other hand, while
    these early demonstrations of research vehicles highlight the potential
    for fuel cell technology, there still is a great deal of enabling
    research and development work on components and systems that must yet
    be completed to meet automotive requirements in terms of performance
    and driving range.
        Question. Where do United States manufacturers stand in comparison
    to Japanese and European manufacturers in fuel cell development?
        Answer. For stationary power generation, U.S. fuel cell
    manufacturers are clearly the world leaders, a position resulting from
    the significant U.S. government investment in stationary fuel cell
    technologies. For transportation fuel cells, where U.S. government
    investment has been comparatively smaller to date, U.S. developers are
    facing fierce competition from abroad where public and private
    investment has increased dramatically recently. As a result, U.S.
    manufacturers are slightly behind, but narrowing the gap, in fuel cell
    stack technology. To their credit, U.S. developers are equal to or
    slightly ahead in fuel processing technology at this time.
        Question. How dependent is the successful deployment of fuel cell
    technology on the development of advanced battery technology?
        Answer. Development of advanced battery technology, like improved
    electric drive systems or lightweight materials, could certainly
    contribute to enhancing the successful deployment of fuel cell
    vehicles. Advanced batteries could ameliorate the requirements
    currently placed on fuel cells in terms of their power density and
    needed start-up time. However, fuel cell vehicle conceptual designs
    being pursued include either stand-alone fuel cells operating with on-
    board hydrogen storage which require no batteries, or alternatively,
    liquid fueled fuel cells which are battery augmented. Thus, depending
    upon the particular design approach and fuel used, fuel cell vehicles
    may or may not be dependent upon advanced battery technology.
        Question. There recently were trade press reports describing the
    discovery of carbon materials that could potentially provide hydrogen
    storage sufficient to give a fuel cell vehicle a 5,000 mile range. Has
    the Department reviewed this information? Could this discovery have any
    impact on near or medium-term fuel cell development?
        Answer. The Department is aware of the published results of the
    data generated by Northeastern University and has sent researchers to
    the university to observe the tests and talk to the Principal
    Investigators. The results reported by the university indicate a
    relatively large amount of hydrogen fuel could be stored and are
    significantly different from results reported by other laboratories for
    carbon-based storage systems. These results appear to warrant further
    validation.
        This technology is relevant to hydrogen storage onboard a vehicle
    and is not directly related to fuel cell development. However, if this
    material could be incorporated into a storage system with a fuel cell,
    it would solve one of the many challenges facing the introduction of
    fuel cell vehicles.
                        advanced automotive technologies
        Question. The ``metrics'' for the Advanced Automotive Technologies
    program appear to be about 2-3 times higher than those for Advanced
    Heavy Vehicle Technologies, but the funding request is approximately 7
    times higher. How does the Department account for this seeming
    imbalance?
        Answer. Both of these programs have the potential to be cost-
    effective ways to reduce petroleum dependence in the transportation
    sector and deserve strong government support. Advanced Heavy Vehicle
    Technologies is a new program that has grown at only a modest rate
    because of the major financial commitments to the domestic auto
    companies.
        The heavy vehicle program is modifying an existing diesel engine
    technology that has been in operation for many years to make it
    cleaner, more efficient, and useable in light trucks. While this is a
    formidable technical challenge, it is less challenging than designing
    technologies that will introduce electric drives, battery use and
    storage, alternative fuels, and fuel cells into automobiles.
        Question. The budget request indicates that the Department is
    targeting development of highly clean and efficient diesel engines for
    heavy trucks, and hopes to devolve this technology to increasingly
    popular light trucks/sport utility vehicles. Are the Department and its
    partners concerned that the popularity of light trucks might be on the
    wane by the time diesel technology is developed for use in light
    trucks?
        Answer. Industry market studies indicate that light trucks/sport
    utility vehicles will continue to increase from 47 percent of light
    vehicle production in 1996 to somewhat over 50 percent by 2001, when it
    is expected to stabilize. These classes of vehicles have relatively
    poor fuel economy compared to automobiles, worsening the oil use
    situation in the U.S. This situation is substantially driven by the
    continuing availability of low-cost petroleum, which is expected to
    continue well beyond the date of introduction of the clean diesel
    engine to light trucks. Regardless of whether the popularity of these
    vehicles continues to increase or decline, there is still the
    imperative to increase their efficiency. Simple substitution of a low
    emission, high efficiency diesel engine for the conventional gasoline
    engine will increase its miles per gallon by 50 percent.
        Question. The budget request for Automotive Materials Technology/
    Propulsion Materials is reduced by $2.25 million. What is the impact of
    the reduction in Propulsion Materials?
        Answer. The major activity in the Partnership for a New Generation
    of Vehicles gas turbine effort in fiscal year 1998 is the development
    of ceramic manufacturing technology for critical gas turbine
    components, including a high speed rotor, combustor, and heat recovery
    system. The reduction in the Automotive Propulsion Materials budget
    will reduce the scope and stretch the schedule of the industry effort
    in ceramic manufacturing of these parts and the supporting technology
    programs at national laboratories and universities. The schedule for
    the go/no-go decision on the turbine option will be delayed until mid-
    2000 because of the funding reduction.
        Question. If funded at the request level, will the Department have
    sufficient information on key components to make a go/no-go decision on
    the turbine option by mid-1999?
        Answer. If funding were restored to the fiscal year 1997 level of
    $6.5 million, it is expected that the ceramic manufacturing technology
    effort could be accelerated sufficiently to make a go/no-go decision by
    the end of 1999 to determine if the gas turbine remains a viable
    candidate for incorporation into the PNGV 2002 concept vehicle.
               northwest alliance for transportation technologies
        Question. In the last year the Department has joined in supporting
    the formation of the Northwest Alliance for Transportation
    Technologies. What benefit does the Alliance add to the DOE
    Transportation program in terms of expertise, coordination and other
    factors?
        Answer. The development of an ultra-high mileage and
    environmentally friendly vehicle of the future will require the
    introduction of lightweight materials into vehicle production while
    maintaining structural integrity, strength, and safety.
        PNGV identifies aluminum, magnesium, titanium, and polymer
    composites as enabling lightweight materials. Before these materials
    find extensive use in automobiles, enabling manufacturing technologies
    that significantly reduce the cost of primary aluminum, magnesium,
    titanium, and polymer composites are required. Furthermore, the forming
    and joining of these materials for automotive applications will need to
    be addressed. The Northwest aerospace industry has been a world leader
    in the utilization, forming, and joining of lightweight materials. The
    infrastructure surrounding the Northwest aerospace industry includes
    primary aluminum, magnesium, titanium, and composite manufacturers
    (Tier I), as well as part forming and materials joining manufacturers
    (Tier II).
        The Northwest Alliance for Transportation Technologies (NATT) will
    significantly benefit the DOE Transportation Technologies program by
    accessing and utilizing the established aluminum, magnesium, titanium,
    and composite manufacturing expertise built around the Pacific
    Northwest aerospace industry to address the critical lightweight
    materials objectives of PNGV. Also, NATT will provide an avenue for
    Tier I and II materials suppliers to play an active role in the DOE
    Transportation Technologies program. Tier I and II suppliers will
    ultimately be responsible for both reducing the cost of critical
    lightweight automotive materials and producing automotive production
    quantities.
        The NATT will coordinate collaborative projects with industry,
    national laboratories, and universities to develop enabling
    manufacturing technologies that will lead to an increased use of
    lightweight materials in automobiles. One objective of these
    collaborative projects is to team with primary suppliers of aluminum,
    magnesium, titanium, and composites, such that technical advances can
    rapidly move manufacturing volumes required for the transportation
    industry. NATT will also coordinate projects to develop advanced
    forming and joining technologies that more effectively utilizes
    lightweight materials.
        Question. Does the Department anticipate a continued productive
    working relationship with the Alliance?
        Answer. Yes, the Department anticipates a very productive
    relationship with the Alliance, continuing to build on the partnerships
    established in fiscal year 1997. The introduction of lightweight
    materials into the transportation sector is critical for all future
    vehicle concepts. NATT not only allows the lightweight materials
    expertise developed in the aerospace industry to be accessed and
    utilized but it also incorporates the critical Tier I and II aluminum,
    magnesium, titanium, and composite materials manufacturers need to
    reduce primary and secondary material costs. NATT comprises an integral
    part of existing DOE transportation programs.
        Question. What are some examples of work to be performed by the
    Alliance in fiscal year 1998?
        Answer. fiscal year 1998 projects will focus on developing enabling
    technologies that lead to both the near term and longer term
    introduction of aluminum, magnesium, titanium, and polymer composites
    into automotive vehicles. Projects will address specific PNGV needs not
    currently funded by the DOE Transportation Technologies program.
    Project areas will include development of manufacturing processes that
    reduce the cost of primary magnesium, development of manufacturing
    processes that reduce the cost of primary titanium, development of
    aluminum forming processes that increase the utilization of aluminum in
    automobiles, and innovative development of fiber reinforced composites
    for automotive applications.
                               program direction
        Question. The justification indicates that the Program Direction
    activity for fiscal year 1997 is being evaluated to address a projected
    end-of-year shortfall of $650,000. How does the Department plan to
    address this shortfall?
        Answer. The Department is addressing this shortfall by implementing
    several actions. To date, the Office of Energy Efficiency and Renewable
    Energy has requested and received approval from the Office of the Chief
    Financial Officer to recover prior year deobligations (PYD), which had
    resulted from the close-out of expired contracts, to offset the
    projected shortfall. These prior year deobligations from various
    Sectors plus carryover balances from the Industry Sector were
    internally reprogrammed to the Transportation Sector's Program
    Direction area, in accordance with Congressional guidelines and
    thresholds.
        Question. Why has a ``contingency'' of $300,000 been requested for
    fiscal year 1998?
        Answer. The contingency of approximately 4.7 percent is requested
    to accommodate variables such as payment for overtime and compensatory
    time, promotions and within grade salary step increases, benefits for
    former personnel, and other similar types of payroll activities to help
    preclude the need for a reprogramming action.
        Question. The $210,000 requested for employee incentive awards
    appears to mean an average of more than $3,500 per person. Assuming not
    all employees will earn incentive awards, is the amount requested
    appropriate?
        Answer. Although it is not envisioned that all employees will earn
    an incentive award we believe the $210,000 is the appropriate amount
    for special act and service awards, employee incentive awards, and
    group awards.
                                buildings sector
    Building America
        Question. The request for Building America indicates that industry
    teams will transfer system innovations to 15,000 homes over the next
    four years. Why is it necessary to demonstrate innovative systems in
    15,000 homes before such systems are adopted as regular industry
    practice?
        Answer. It is projected by the year 2000, the Building America DOE/
    Industry cost-shared partnership will have developed 2,000 highly
    energy efficient, environmentally friendly, and cost-effective houses
    in a number of communities. The technical dissemination, not
    demonstration, spinoff to regular industry practice is anticipated to
    be 15,000 houses constructed by other builders and developers applying
    the Building America system integration methods currently under
    development.
        Question. How many states currently have Building America programs?
        Answer. At present, the four Building America teams have projects
    under construction or to be initiated during fiscal year 1997 in 11
    states: Arizona, California, Florida, Idaho, Illinois, Massachusetts,
    Nevada, New York, North Carolina, Pennsylvania, and Texas. The four
    Building America teams are composed of a total of more than 70
    industries in 27 states: Arizona, California, Connecticut, Colorado,
    Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Maryland,
    Massachusetts, Michigan, Minnesota, Nevada, Pennsylvania, New
    Hampshire, New Jersey, North Carolina, Ohio, Rhode Island, Virginia,
    Tennessee, Texas, Washington, and Wisconsin.
                        home energy rating system pilots
        Question. $1.5 million is requested to continue Home Energy Rating
    System pilots in seven states. What progress have the pilot states made
    in implementing HERS?
        Answer. The objective of the pilot states effort has been to
    overcome the barriers to the use of home energy rating systems and
    energy efficiency financing. Progress in meeting these objectives has
    been constant in the seven HERS pilot states. Over $150 million in
    energy efficiency mortgages were issued in these states through the
    spring of 1996 and a substantial amount of additional energy measures
    were installed based on ratings. Tens of thousands of ratings have been
    conducted and thousands of lenders, realtors, builders and appraisers
    have been trained.
        Question. When does the Department propose to cease requesting
    funding for the existing pilots?
        Answer. Funds for the pilot states will be reduced under the fiscal
    year 1998 budget proposal and not requested for fiscal year 1999.
        Question. When the pilots are complete, will the Department propose
    to divert funds from existing pilots into new states, or does the
    Department feel HERS will be sufficiently demonstrated in the existing
    pilot states to allow states to establish their own programs
    independently?
        Answer. There is not a need to replicate the large scale multi-year
    pilots. Technical assistance to other states however, will be necessary
    to achieve national acceptance of HERS and increased access to energy
    efficiency financing.
                                 best practices
        Question. In the justification for the Best Practices activity, a
    number of software development programs are described as having
    generated large energy savings for users. What unique advantage or
    expertise does the Department have in developing this software that
    could not be provided by a private software development firm?
        Answer. The Department's role in software development stems from
    its need for energy-focused whole buildings software to carry out its
    research and development activities, and requests from industry to
    partner with it to develop software responsive to the defined needs of
    industry in the predesign, design or redesign in the case of
    renovation, commissioning and operation of buildings. The software
    developed for, and stemming from, research and development forms the
    basis for that developed with industry partners.
        The process of ongoing consultation and interaction with industry
    so that software is responsive to its needs is time-consuming and
    costly. No single, private software developer has exhibited the ability
    to invest the time required for validated, energy-focused software
    tailored to the specific steps of the predesign, design and redesign,
    commissioning and operation of buildings. The software needs for
    specific types and sizes of buildings vary, further reducing the
    private developer's ability to absorb the financial risks. In addition,
    as new technologies and design know-how emerge as a result of research
    and development, the software must be updated, adding even more
    financial commitment and risk.
        The objectivity, comprehensiveness and credibility associated with
    the Department/industry-developed software are crucial. These qualities
    tend to be perceived as, and oftentimes are lacking in the limited,
    narrowly-focused commercially available energy software that does
    exist, thereby discouraging energy-conscious building design.
        Question. Does the Department anticipate continuing to develop this
    type of software into the foreseeable future?
        Answer. To fulfill its research and development responsibilities,
    the Department must continue to improve software. As long as the
    financial risk is high and industry asks to work with the Department on
    software improvements capable of meeting its needs, it is essential
    that the Department continue its partnerships. Valid building energy
    simulation software is essential if industry is to have the tools it
    requires to properly integrate efficiency and renewable energy design
    know-how and technologies into buildings and have confidence that the
    buildings will perform as anticipated.
        Moreover, because it is the Department's mission to encourage
    adoption of new know-how and technologies, there must be a process in
    place to assure that the tools needed to facilitate adoption are
    available. And, the Department must assure that procedures needed to
    verify the reliability of software continue to be improved. Adding
    capabilities as new knowledge and technologies emerge tends, however,
    to be a less intensive process than the original development of the
    software. Thus, it is expected that once the software industry wants
    and needs are met, a less intense effort will be required.
                               hi-cool heat pump
        Question. $2,150,000 is requested for development of a Hi-cool Heat
    Pump, which the justification indicates will be ready for market
    introduction in 2005. What is the funding profile for this program?
        Answer. This program began in fiscal year 1993 at $450K and
    progressed as follows. fiscal year 1995 $1.0 million, fiscal year 1996
    $600K, fiscal year 1997 $900K, fiscal year 1998 $2.1 million. Funding
    to date has produced two candidate advanced cycle absorption heat pumps
    concepts that will be further developed into prototype heat pumps with
    a cooling performance of 30 percent better than other cooling devices.
    When fully developed these technologies can penetrate the southern tier
    markets where cooling is the dominant mode of energy use for space
    conditioning.
        Question. Does the optimal funding ``curve'' have a large peak in
    some future fiscal year?
        Answer. As development of ``Hi-cool'' systems progresses, each
    successive phase requires increased funding. Hardware development of
    components (initiated in 1997) requires a higher level of funding than
    concept evaluation which is mainly an analytical effort. The laboratory
    development and testing of complete heat pump systems requires more
    funding than development of individual components. In the later stages
    of the project, these increases will be somewhat offset by increased
    cost sharing by industry. Industry will fund 50 percent of the field
    testing phase.
        Question. If so, when and how much will be required?
        Answer. The required Departmental funding needed to carry this
    program through all phases is indicated in the table below:

    ------------------------------------------------------------------------
    Phase               Activity                Fiscal year    Phase funding
    ------------------------------------------------------------------------
       IConcept evaluation                       1994-1997      $3,800,000
      IIComponent development                    1997-2002       7,000,000
     IIISystem development                       2001-2004       6,000,000
      IVField testing                            2004-2005       1,000,000
    ------------------------------------------------------------------------

        Question. Are the alternative Hi-cool heat pump cycles being
    evaluated as an alternative to the design being developed for market in
    2005, or as a follow-on technology?
        Answer. In fiscal year 1997, the ``Hi-cool'' program is developing
    critical components at small business R&D firms for two of the concepts
    evaluated in Phase I. The one or two alternative Hi-Cool cycles being
    further evaluated in 1998 are additional highly-ranked Phase I concepts
    which are possible alternatives to the two now undergoing hardware
    development. Modest parallel development of these concepts with
    additional small business contractors lowers the overall risk in the
    project by maintaining a range of technical options during the critical
    component development phase. All concepts are being evaluated for
    potential market introduction in the year 2005.
                        large commercial chiller program
        Question. The justification indicates that the Large Commercial
    Chiller program with York International will be completed. To what
    degree will DOE participate in getting this technology ``ready for
    commercialization * * *''?
        Answer. Testing of a prototype 40 refrigeration ton DCC chiller at
    York International will begin in mid 1997 and continue into early
    fiscal year 1998. Using laboratory test results and a newly designed
    advanced direct fired burner, a pre-production 400 ton DCC chiller will
    be fabricated and readied for field testing in late fiscal year 1998.
    The estimated completion date for field testing of the 400 ton
    production ready chiller will be early fiscal year 1999. The cost share
    from York International for field testing will be 50 percent.
        Question. Is 35 percent the total cost share for the entire
    program, or just for the current stage of the program?
        Answer. The current program is cost shared by York International at
    35 percent however, this will increase to 50 percent for the field
    test.
                        advanced desiccant technologies
        Question. The budget request includes $2 million for advanced
    desiccant technologies. What is the funding profile for the remainder
    of this program?
        Answer. The current research plans for both solid and liquid
    desiccants which extend through the year 2000 would require level
    funding.
        Question. If funded at the request level in fiscal year 1998, does
    the Department anticipate requesting funding for this program in fiscal
    year 1999?
        Answer. Yes. Current projects are focused on solid desiccants
    technology application in large commercial buildings because solid
    desiccants are further along in their development and are available for
    test and evaluation. Research and development of enabling technologies
    for Indoor Air Quality (IAQ), and the development of sensors and
    specialized control will take full advantage of the energy saving and
    air quality improvement potential of solid desiccant-based air
    conditioning equipment. A need exists to establish desiccant based
    systems as mainstream HVAC equipment for indoor air quality and comfort
    control. HVAC and comfort control systems based on liquid desiccants is
    planned as part the longer term program.
        Question. What level of cost-sharing has been achieved in this
    program?
        Answer. There are two contracts in place for developing desiccant
    systems, one with SEMCO/Trane which has 37 percent cost-sharing and one
    with ICC/Englehard which has 63 percent cost-sharing. In addition,
    manufacturers of desiccant wheels being tested at NREL have donated
    their wheels and will continue to cost share as advanced wheel
    development is achieved. Gas industry cost share is in the form of site
    selection for test and evaluation of desiccant systems and a
    willingness to cost share in the testing and data collection.
                     fuel cell building micro-cogeneration
        Question. $1.7 million is requested for Fuel Cell Building Micro-
    Cogeneration. When does the Department hope to achieve development of a
    commercially viable PEM fuel Cell?
        Answer. The goal of the industry cost shared Fuel Cell Buildings
    Micro-cogeneration programs is to have the necessary critical
    technologies (i.e., fuel processor, bi-polar plates, catalysts,
    membranes), developed and ready to be tested in a prototype 50kw Proton
    Exchange Membrane fuel cell in a light commercial building with
    conversion efficiencies of 36-40 percent, in the year 2002. Projected
    cost of the fuel cell is $2000/kw or less. To accomplish this goal will
    require adequate funding for research and development focused on fuel
    processing of Natural Gas (NG) to develop the reforming techniques for
    extraction of Hydrogen (H) for use in the fuel cell. Catalyst
    development is necessary to make the fuel cell more tolerant of Carbon
    Monoxide (CO) gas, which is poison to the system and which will
    significantly reduce the power density of the fuel cell. Components
    such as membranes, catalysts and bi-polar plates in the cell stack are
    high cost items and will require substantial research and development
    to improve cell stack operation and to lower cost of construction.
        Coordination with the automotive program will be maintained at a
    high level because of the synergistic nature of the two programs and
    the technologies developed can be incorporated into both programs. The
    Fuel Cell Buildings Micro-cogeneration program will provide an
    accelerated early market entry into the commercial building sector for
    the PEM fuel cell leading to the larger residential market, and assist
    the automotive market strategy. This schedule will lead to introduction
    of a prototype ``First Generation'' PEMFC operating in a commercial
    building by the 2004 with a cost target of $1500/kw.
        Question. Will further increases in the program be required to
    achieve this goal?
        Answer. Further funding will be required in this program to achieve
    the ``First Generation'' PEM fuel cell operating in a light commercial
    building by the year 2002, and commercial introduction by the year
    2004. An expected industry cost share for this program is 35 percent to
    50 percent.
                             lighting appliance r&d
        Question. A number of technologies are being pursued in the
    Lighting Appliance R&D program. When does the Department hope to
    complete development of the low power sulfur lamp?
        Answer. The Department is planning to complete research and
    development on the low power sulfur lamp in fiscal year 1999. By that
    time a 100 lumens per watt prototype, operating at less than 100 watts
    will have been successfully tested and will be ready for
    commercialization by the private sector.
        Question. To what extent do near-term lighting technologies (such
    as compact fluorescents) stand to be overtaken and replaced by longer-
    term technologies (sulfur lamps, etc.)?
        Answer. Over time, there has always been a mix of lighting
    technologies. New lighting technology has a relatively slow rate of
    penetration--a good estimate is that a superior new technology will
    replace about 50 percent of the older technology in ten years. Hence,
    compact fluorescents are not necessarily restricted by newer sulfur
    technology.
        Question. Are the economics of compact fluorescents dependent on
    long-term use that would be obviated by development of more advanced
    technologies, or are there market niches available to justify a range
    of technologies?
        Answer. Because there are so many different applications or needs
    in lighting, and so many technologies to draw upon, there are always
    large niches available for each technology for a considerable time,
    measured in decades.
                              energy star program
        Question. Does the Department expect the Energy Star Program to
    become self-sustaining at a lower funding level at any time, or will a
    level of support comparable to the fiscal year 1998 budget request
    always be required?
        Answer. The Department does expect the program to become
    increasingly self-sustaining and to require less funding in the future
    than requested in fiscal year 1998. We plan to demonstrate the value of
    a labeling and promotion campaign for high efficiency products through
    retail sales. Our experience so far has shown that retailers and
    utilities are willing to commit significant resources to offset program
    costs.
        When the initiative has reached a critical mass of participants,
    federal involvement and funding requirements will decline as the
    partners pick up the cost of advertising, sales training, point of
    purchase displays, etc. Some federal activity will continue to be
    needed, however, to preserve the integrity and credibility of the
    Energy Star symbol, including collecting and compiling appliance
    efficiency data and designating qualifying models.
        Question. The Department's response to questions submitted last
    year indicate that lighting manufacturers currently make dedicated
    fixtures on specifications of large commercial accounts (hotels, etc.).
    Given that manufacturers are already engaged in production of efficient
    technologies for large commercial accounts, why does the Department
    continue to invest in the volume purchase program for lighting?
        Answer. There's no question that economical high-efficiency
    lighting is available to large commercial accounts. While we are
    pursuing further efficiency improvements for commercial lighting, the
    volume purchases are intended to bring the efficiency of residential
    lighting up to the standard of best practice in the commercial sector.
    One way to do this is by overcoming the perceived shortcomings of
    compact fluorescents as replacements for incandescent lamps, in
    partnership with industries which buy large numbers of lamps and
    fixtures of the varieties that individual consumers buy for their
    homes.
        Volume purchases that lead to increased sales of dedicated compact
    fluorescent light (CFL) fixtures in hotels, multi-family residential
    dwellings and commercial buildings will having a positive impact on
    price, i.e., as more and more fixtures are manufactured, manufacturing
    costs and retail prices decrease. In addition, a residential home-owner
    might be educated about the benefits of CFLs by first having used them
    in a hotel room or office suite.
                  status of home energy rating system council
        Question. The Committee has previously expressed concern that the
    Home Energy Rating System being developed by the Department and the
    HERS Council might skew consumers' perception of the actual total
    energy usage of a particular home. What is the status of the HERS
    Council?
        Answer. The HERS Council issued their own set of guidelines in
    1995. They continue to support their guidelines and energy efficiency
    financing without any Department funds.
        Question. How does the Department plan to proceed on this issue in
    fiscal year 1998?
        Answer. The Department continues to analyze options on how to best
    proceed to ensure accurate, clear and concise information gets to
    customers and the financial community.
        Question. Does the Department feel it is possible to develop a
    rating system that will be generally agreeable to the stakeholder
    community?
        Answer. The stakeholders remain deeply divided over the voluntary
    guidelines. The Department continues to consider options that will
    result in meaningful information to consumers and the financial
    community, and also meet stakeholders' concerns. We are working to
    develop a resolution of these issues.
                        lighting and appliance standards
        Question. A $3.6 million increase is requested for Lighting and
    Appliance Standards. As you may know, the development of these
    standards has been a controversial issue for the Department and for
    this subcommittee. How far along is the Department in implementing the
    process improvements that were developed last year?
        Answer. One of the key features of the process improvement was the
    establishment of the Advisory Committee on Appliance Energy Efficiency
    Standards. This Committee was established to provide the Department
    with regular guidance on the implementation of the Process Rule as well
    as on other critical issues that cut across a variety of products. The
    first meeting was held on January 8, 1997, and a number of
    subcommittees were created to deal with some of the following specific
    issues: analytical methods for the determination of energy saving
    forecasting, future electric prices, life-cycle cost, etc.; screening
    and engineering analysis, consumer and utility impact issues; and non
    regulatory approaches. These subcommittees will be making
    recommendations to the Advisory Committees. The Department also
    convened a workshop on manufacturing impacts on March 11-12, 1997. At
    this Workshop, the Department presented a proposed approach and
    methodologies for analyzing the impacts on manufacturers. One of the
    conclusions from the workshop is that each rulemaking will tailor the
    manufacturing impact analysis to the specific product and the plan for
    conducting the analysis will be discussed with stakeholders. In
    addition to the manufacturing impact analysis workshop, the Department
    has held four workshops (clothes washer and ballasts standards, and
    electric motors and water heater test procedures) since the publication
    of the process rule.
        Question. Does the Department feel it has regained the confidence
    of the industries whose products are being subjected to codes and
    standards?
        Answer. The Advisory Committee meeting and the five workshops held
    since the publication of the process rule were generally well attended
    and well received and the Department is committed to continue the
    implementation of the new procedures, including the commitment to
    frequent and early stakeholder consultation.
        Question. What will the increase in Lighting and Appliance
    Standards enable the Department to do that it would not be able to do
    if held to the fiscal year 1997 level?
        Answer. The increase allows for continuation of the new standards
    development process as planned and on schedule: issuance of notice of
    proposed rulemaking (NOPR) for conservation standards for clothes
    washers and water heaters (responsible for 14 percent of residential
    energy use), and final rules to incorporate legislated standards and
    test procedures for plumbing equipment and large electric motors. This
    increase will also provide for the final rule to amend test procedures
    for residential central air conditioners/heat pumps and initiate
    rulemaking for energy conservation standards for these products.
    Without the increase, delays will occur and DOE would lose credibility
    with the stakeholders that have invested in, and contributed to the
    revised rulemaking process.
                       building standards and guidelines
        Question. A $4.9 million increase is requested for Building
    Standards and Guidelines, 3.5 million of which is for Updating State
    Codes and $1.4 million of which is for Voluntary and Federal Energy
    Codes. How many state codes could be updated if funding for this
    activity were held at the fiscal year 1997 level?
        Answer. A total of ten state codes could be updated if funding for
    this activity were held at the fiscal year 1997 level. Additional
    funding will support cost shared incentive grants and will enable the
    Department to develop and implement programs, tailored to specific
    states and user groups, especially those not directly supported during
    fiscal year 1997, to provide a range of materials, including
    information to state officials about code options, promotion of energy
    efficiency benefits to new home buyers and builders, compliance and
    educational materials, advocacy assistance, model legislation or
    regulations, and testimony on technical and administrative matters at
    legislative and administrative hearings.
        Question. In how many additional states will DOE be active if the
    requested increase is granted?
        Answer. The increase in funding will enable the Department to
    assist an additional 15 states in updating and implementing their
    building energy efficiency codes. Representatives from states
    participating in a multi-state working group have all decided that
    there are important benefits to them in adopting upgraded portions of
    the emerging commercial building energy consensus code without waiting
    to the year 2000. These early adopters will not only benefit their
    regions of the country but can also facilitate adoption of the updated
    code by other states in the year 2000 and beyond, through their early
    adoption experience.
        Question. At some point will all state codes be updated, or will
    the Department continue to revisit and help modify the codes ad
    infinitum?
        Answer. The Department is assisting states to strengthen their
    energy code infrastructure, improve their professional and trade energy
    expertise and strengthen their partnerships with producers so that
    states will increasingly be able to routinely update their energy codes
    without Federal assistance.
        At the same time, the Department is working with the building
    industry consensus code organizations to make the model codes easier to
    implement and use, to improve their technical basis, and to incorporate
    new energy efficiency and renewable energy measures that are
    technologically feasible and cost effective. The Council of American
    Building Officials has published an upgraded edition of its Model
    Energy Code twice since 1992 and will do so again in 1998. The American
    Society of Heating, Refrigerating and Air-Conditioning Engineers
    (ASHRAE) and the Illuminating Engineering Society of North America
    (IESNA) are currently in the process of upgrading their building
    industry consensus code, Energy Code for Buildings Except Low-Rise
    Residential Buildings, ASHRAE/IESNA 90.1-1989R. When implemented, it is
    expected to reduce energy use in buildings by 25 percent. It is
    expected to be published in 2001.
                       voluntary and federal energy codes
        Question. What will the increase requested in Voluntary and Federal
    Energy Codes enable the Department to do in fiscal year 1998 that
    wasn't done in fiscal year 1997?
        Answer. In fiscal year 1997, the Department proposed energy
    standards for Federal buildings. In fiscal year 1998, the Department
    will prepare and publish final standards. The increase will permit the
    Department to prepare and distribute materials and information that
    will assist Federal agencies to train their people to implement and
    enforce these improved energy standards. In fiscal year 1998, the
    Department will complete modifications to its Federal residential
    energy standards that address renewable energy benefits and propose
    them for public comment. The increase will permit the development of
    support materials to implement the proposed revisions.
        In fiscal year 1997, the Department has been working with the
    building industry consensus standards organizations to technically
    improve the model codes and to make them easier to implement. In fiscal
    year 1998, that work will continue and the residential improvements of
    the previous three years will be published in the 1998 edition of the
    Model Energy Code. The increased funding will enable the Department to
    make the legislatively required determination as to whether the
    revisions would improve energy efficiency in residential buildings, and
    to make that analysis available to states that wish to consider
    updating their energy codes. Regarding commercial building energy
    codes, in fiscal year 1998, the Department will continue to provide
    analysis supporting resolution of comments received on the second
    public review draft of ASHRAE/IESNA 90.1-1989R. The additional funding
    will support analysis of whether ASHRAE/IESNA 90.1-1989R will save
    energy in commercial buildings, as legislatively required. This
    analysis will be used to support early adopter states.
                       federal energy management program
        Question. The text accompanying the justification for FEMP
    indicates that total energy cost savings from capital improvements in
    place through fiscal year 1996 will be $7.8 billion by 2002 and $15
    billion by 2015. Are these net figures that reflect the cost of the
    capital investments?
        Answer. Yes. However it should be noted that the cumulative $7.8
    billion energy cost savings in fiscal year 2002 represents the savings
    attributable to investments put in place from 1985 through 1995, plus
    cost savings from anticipated new investments from 1996 forward, based
    on full funding of the FEMP budget request. The $15 billion net energy
    cost savings by 2015 reflects both the capital cost of projects and
    estimated cost of private sector funding accessed through energy
    savings performance contracts and utility-based financing, which should
    dominate the investment stream over the fiscal year 1995 to fiscal year
    2005 period. No investments beyond fiscal year 2005 were assumed. These
    cost savings do not include savings attributable to energy efficient
    product procurement practices, energy cost savings achieved through
    improved energy and building systems operations and maintenance, or to
    the improved efficiency of new buildings entering the Federal building
    stock.
        Question. The justification also describes FEMP's increasing
    emphasis on ``Energy Saver'' performance contracts in which other
    agencies order energy savings projects through FEMP personnel, then
    reimburse FEMP once energy savings are realized. Has this system of
    reimbursement been established and demonstrated?
        Answer. Several methods of performing work on a reimbursable or
    revenue-generating basis have been identified by FEMP. Several
    promising methods will require changes in policy and, in some cases,
    require legislation. These include the development of a revolving fund
    for energy-efficiency work and the ability of FEMP to be reimbursed for
    work on a shared-savings basis or reimbursed in years following the
    delivery of services. FEMP has been and will continue to pursue these
    methods as they have significant potential to improve FEMP's ability to
    perform work for other agencies.
        Question. Is the Department confident it has the authority to
    retain and use reimbursements for its own personnel?
        Answer. Although this approach is consistent with the use of
    reimbursable revenue in other agencies, this is one of the issues that
    still needs to be confirmed and resolved before a pilot project can be
    established.
        Question. The Committee is aware that budgeting for energy
    management in other agencies has been erratic, due to both
    Congressionally imposed cuts and Administration budget requests that
    have given such programs a low priority. How does the Department view
    the level of cooperation and financial support it is receiving from
    other agencies?
        Answer. There is both interest and cooperation from Federal
    agencies and they continue to look to FEMP for leadership. Even though
    agency budgets are decreasing, FEMP, as part of its mission will
    continue to help agencies identify alternate financing arrangements. To
    help streamline the contracting process, DOE issued a solicitation for
    a FEMP Energy Saver Performance Contract (Super ESPC) in May 1996. The
    Super ESPC process allows Federal agencies to issue orders off of each
    contract awarded and begin to realize energy cost savings more quickly.
    Each agency will pay the contractor from the savings in the agencies'
    energy expenses. The first Super ESPC for energy efficiency should be
    awarded in the next 60 days and will cover 8 western states and the
    pacific territories and has a contract value of $750 million, and
    delivery orders will be placed up to that amount. Demands on agency
    resources to develop contracts should be reduced by this process,
    allowing agencies to use their valuable and scare resources on other
    priorities. As a result, other agencies are cooperating in the
    establishment of this contracting mechanism and are anxious to see it
    in place across the country. Individual delivery orders will be subject
    to Congressional notification requirements, and agencies placing those
    orders will be responsible for said notifications.
        Question. Does the Department feel other agencies are responding to
    the letter and spirit of EPACT and Executive Order 12902?
        Answer. Yes. Ten agencies, the Department of Agriculture, Defense,
    Energy, the Interior, Justice, Transportation, Veterans Affairs, the
    Federal Emergency Management Agency, General Services Administration,
    and the National Aeronautics and Space Administration have already
    achieved the Energy Policy Act goal of a 10 percent reduction in
    buildings energy use from 1985. In addition, three agencies, the
    Departments of Energy and Justice, and Federal Emergency Management
    Agency have already achieved a 20 percent reduction in buildings energy
    use from 1985. The remaining agencies continue their efforts to reach
    the goals set under EPACT and Executive Order 12902. And, while their
    progress has been slower, they have indicated their willingness to
    strive to reach their goals without taking away from their mission
    requirements and remain within resource constraints.
        Question. Has the Department considered prioritizing allocation of
    FEMP resources to give preference to those agencies that are the most
    willing to devote their own resources to energy savings projects?
        Answer. The Interagency Energy Policy Committee, Interagency Energy
    Management Task Force and FEMP believe that activities leading to the
    broadening and deepening of participation in Federal energy management
    efforts is an essential FEMP role, and is foundational to the long term
    goal of institutionalizing sound energy management practices in the
    Federal government. While FEMP makes all policies, tools, and
    information available without regard for agency cost sharing, it does
    seek to apply its training, SAVEnergy audits, design assistance, and
    partnership facilitation services where agencies are committed to
    implement projects with their own resources or through their own or
    FEMP's alternative financing mechanisms. In general, FEMP applies its
    resources where a particular activity will have the greatest energy and
    cost saving effects. FEMP is committed to and attempts to utilize its
    limited resources in ways that will leverage resources of agencies,
    utilities, manufacturers and energy service companies and result in
    replication of results beyond immediate projects.
        Question. What agencies or Departments have been the most active in
    pursuing energy savings opportunities?
        Answer. The agencies who are most active are the ten agencies who
    have achieved the Energy Policy Act goal of 10 percent reduction in
    buildings energy use from 1985 as well as the three agencies who have
    achieved a 20 percent reduction in buildings energy use from 1985. The
    ten agencies achieving the 10 percent goal are: Departments of
    Agriculture, Defense, Energy, the Interior, Justice, Transportation,
    Veterans Affairs, the Federal Emergency Management Agency, General
    Services Administration, and the National Aeronautics and Space
    Administration. The three agencies attaining the 20 percent goal are:
    Departments of Energy and Justice and the Federal Emergency Management
    Agency. However, recent budget reductions and the elimination of some
    budgets may change these statistics over time.
        Question. Are there certain agencies or departments in which
    notably large opportunities for savings exist, but which have not
    pursued those opportunities for one reason or another?
        Answer. For the most part, agency energy managers recognize and
    actively strive to implement programs and projects which can achieve
    energy savings in their facilities. However, limited resources and
    internal procurement and legal opinions are the major barriers facing
    those agencies which are having difficulty implementing energy
    efficiency measures. FEMP and the Interagency Energy Management Task
    Force continues to work towards overcoming these barriers within those
    agencies and across the Federal Government. The large agencies clearly
    have the most opportunities for savings, and those agencies have been
    aggressively pursuing opportunities, except where funding limitations
    exist. Within agencies there are unique opportunities such as the
    effort now being investigated by the Department of Energy's own
    programs where surplus facilities are reviewed for energy cost
    reduction projects.
        Question. Aside from providing funding for the FEMP program, is
    there anything this Committee can do that would prompt Federal agencies
    to aggressively seek out and implement energy saving projects that
    would produce concrete budgetary savings?
        Answer. As stated earlier, the Department is exploring several
    methods of performing work on a reimbursable or revenue-generating
    basis. Some of these methods will require legislative and policy
    changes. The Department encourages the Committee to work with the
    Department on any required legislation as recommended or proposed by
    the DOE. Planned proposed policy and legislative changes will allow the
    Secretary of Energy to accept funds from agencies assisted by the
    Department in completing privately financed energy savings projects.
    Funds received would only be used for supporting the ongoing burden of
    contract management and for developing additional privately financed
    energy efficiency projects from energy savings performance contracts
    and utility financed projects.
        Question. In response to a question posed by the Committee last
    year, the Department indicated that ``FEMP has considered charging
    agencies for both technical assistance and the development of energy
    savings performance contracts * * * and [is] continuing to examine what
    authorities and mechanisms could be used.'' Has the program pursued
    this option any further? If no, why not?
        Answer. Yes. The Department has already been charging agencies for
    training under the reimbursable work for others program. All training
    reimbursement funds go to the laboratories where the training programs
    are run and are reinvested in improved training quality. However,
    current training charges do not nearly cover the cost of the courses.
        FEMP also continues to assist agencies under the reimbursable Work
    for Others process and has expanded our efforts in this area. Examples
    of reimbursable work for others at national laboratories include:
      --Cost sharing from GSA on improved computer modeling for helping
            plan lower energy use in new buildings;
      --Reimbursement from several agencies (CIA, NASA, EPA) for help in
            assessing renewable opportunities nationwide to comply with
            Executive Order 12902, and selected related feasibility
            studies; and
      --Reimbursement from the Army and Navy for integrated energy systems
            analysis at various bases.
        Question. The Committee will likely be unable to fund the entire
    increase requested for FEMP as a whole. Should a smaller increase be
    spread across the various program elements within FEMP on a pro rata
    basis? Or, for instance, should all of a $5 million increase for FEMP
    be devoted to Project Financing?
        Answer. The FEMP budget request reflects an integrated program.
    Reduced funding would impact all program elements since they are
    complimentary. Each $1 million cut in program funding is likely to
    result in lost savings on the order of $40 million, over the life of an
    average project of fifteen years.
        The most important of these is the financing program. This program
    is projected to put in place several streamlined energy savings
    performance contracts which will give agencies the ability to quickly
    use non-Federal funds to save energy and operations expenses. These
    contracts are also the foundation for FEMP to work to establish a
    significant reimbursable revenue stream to enhance the program from
    savings delivered to the agencies in future years. Reductions in
    funding will delay the start of the agency savings from the contracts
    and delay the start of FEMP's additional revenue source to expand the
    program and capture more savings for the agencies. Continued funding at
    the $19.8 million level would only allow a few or these contracts to be
    signed by the end of fiscal year 1998. FEMP would concentrate efforts
    on only establishing those contracts which could provide some coverage
    for energy efficiency for all areas of the country. Any of the
    technology specific contracts which help to install renewable or
    advanced technologies would be delayed until fiscal year 1999 or later.
    In addition, FEMP would only provide the most minimal support to train
    and assist the agencies on how they would use the contracts,
    concentrating instead on getting the remaining contracts signed. This
    would further delay the savings that the agencies would see.
        Should the Committee not fund the full FEMP budget request, FEMP
    asks that it be allowed flexibility in applying its appropriation,
    within the bounds of its program, so as to maximize potential savings
    based on the opportunities present during fiscal year 1998.
                        in-house energy management staff
        Question. The justification indicates that staff from the
    terminated In-House Energy Management program have been transferred to
    FEMP. How many FTE's are attributed to former IHEM staff?
        Answer. There are five FTEs who have been integrated into the FEMP
    programs of Project Financing; Technical Guidance and Assistance; and
    Planning, Reporting and Evaluation from the IHEM program that was
    eliminated by Congress.
        Question. Are personnel costs associated with IHEM staff reflected
    in the Personnel Compensation line in the Program Direction activity?
        Answer. All Federal Energy Management Program staff are included in
    the Personnel Compensation line in the Program Direction activity which
    includes IHEM.
        Question. If so, why does the request for Personnel Compensation go
    down in fiscal year 1998?
        Answer. The request for Personnel Compensation is reduced in the
    fiscal year 1998 budget because we are estimating a need for only 20
    FTEs, a reduction of two from fiscal year 1997. When considering the
    costs of Personnel Compensation, it is important to also consider the
    impact of the costs of Civilian Personnel Benefits since Benefits must
    be paid for activities such as Federal Employee Retirement,
    participation in some types of Thrift Savings, and health insurance
    coverage. The savings from the two FTEs is partially offset by a 4.5
    percent increase to cover a projected cost-of-living increase and for
    other personnel actions such as promotions and expected grade
    increases.
                                industry sector
    Industries of the future
        Question. A portion of the technologies and projects being
    supported in the Industries of the Future (specific program) are geared
    to waste reduction and environmental improvements. While these are
    laudable goals, should such projects continue to be a priority in a
    program whose primary purpose is energy efficiency? Is energy
    efficiency the primary goals of the program? Is it the Department's
    view that these projects all contribute to energy savings via waste
    reduction, etc.?
        Answer. Waste reduction is inescapably linked to energy reduction,
    which explains why most of the projects you see are focused on reducing
    environmental and other wastes. In fact, resource efficiency is a
    highly intertwined subject, where wastes and energy are synonymous in
    their growth, or reduction.
        For example, if wastes are reduced in an industrial plant, there is
    less raw material used, less energy used to convert the raw material to
    a finished product, less handling costs to move the waste material
    within the plant, less shipping costs (and energy) to haul the wastes
    away, less costs and energy to dispose of the waste (whether it be
    burial, incineration, or other means of disposal). By having less waste
    as a part of its production, the plant uses and requires less raw
    material, which means that there is less mining (if that is where the
    raw material is derived) and less transportation from the mine to the
    plant. These, too, have energy costs which are thereby reduced.
        The ``life cycle'' costs of all wastes, when summed, are very high
    in terms of total energy potential. This is particularly true in
    ``process'' industries represented in the Industries of the Future,
    which typically operate around the clock, year-round. Even a one
    percent reduction in wastes can have a large impact on total resource
    efficiency. We believe, therefore, that projects which reduce wastes
    have a very large impact on energy efficiency in the industrial sector
    of the United States--from production of raw materials to creation of
    final products.
        To ensure that the Department is funding research which contributes
    to the maximum resource/energy efficiency, each project submission is
    rigorously reviewed by experts at the proposal stage, and again at
    various milestones during the research phase. We have a comprehensive
    system to estimate the true savings in energy and waste reduction of
    every project, with review by the Arthur D. Little accounting firm. All
    of the projects have strong energy efficiency gains.
        The Industries of the Future research projects are solid
    investments to increase energy efficiency, improve competitiveness, and
    maintain U.S. leadership in environmental stewardship through efficient
    use of nature's finite resources.
        Question. Funding requested for the different industry groups
    varies by a considerable degree. Are these differences a function of
    how far the individual industries have come in developing technology
    road maps? Are they a function of potential energy savings in each of
    the industries?
        Answer. Yes, the differences in requested funding reflects a
    delicate balance of the potential energy savings and size of each
    industry, historical funding levels for these industries, and the
    industry's commitment to the process of creating their Vision and
    Technology Roadmaps.
                            advanced turbine systems
        Question. The funding request for the Industries of the Future
    (crosscutting) is essentially flat. How much lower is the request for
    industrial Advanced Turbine Systems than the original program plan?
    What will be the impact of funding the ATS program at the request
    level? How much will be required to maintain the program on its current
    schedule?
        Answer. In the Report to Congress Comprehensive Program Plan for
    the Advanced Turbine Systems, the fiscal year 1998 budget was $31.0
    million. The request is $6.35 million below the program plan. For the
    total program:

                                                  [Dollars in millions]
    ----------------------------------------------------------------------------------------------------------------
                                                                        Funding level--
                                                            --------------------------------------      Year of
                                                                                     Plan to           completion
                                                                Plan to date        completion
    ----------------------------------------------------------------------------------------------------------------
    Plan estimate..........................................              $93.3              $75.8               2000
    Actual.................................................               75.7              105.0               2002
    ----------------------------------------------------------------------------------------------------------------

        The program will be extended to 2002 and the near-term opportunity
    for reduced emissions and commercialization in the distributed
    generation and deregulation market will not be realized until after
    2002. Market share would be lost by the industrial manufacturers and
    potentially result in a loss of jobs.

                            [In millions of dollars]

    DOE fiscal year 1998 funding...................................... $43.0
    Contractor cost-share (60 percent)................................  63.7
    DOE fiscal year 1999 funding......................................  37.0
    Contractor cost-share (69 percent)................................  93.0
    DOE fiscal year 2000 funding......................................  28.5
    Contractor cost-share (86 percent)................................ 181.5

        Question. Is it the Department's view that the stretching out of
    the program is justified by a delay in the development of market
    opportunities for this technology?
        Answer. A delay in the program will result in missed market
    opportunities and U.S. market share. Each year, an estimated 2
    gigawatts of new and replacement power production will be required as a
    result of the deregulation of the utilities in the form of distributed
    generation. With deregulation, opportunities for the industrial
    advanced gas turbine exist in the near term (1999/2000) and utilities
    are accelerating their interest in distributed generation or on-site
    generation with industrial scale gas turbines. Approximately 20 states
    are currently addressing deregulation and California made the first
    move proposing all out state-wide retail wheeling beginning with the
    largest industrial electric consumers in 1996 and ending with
    residential customers in 2002. Electric service utilities are under
    increasing pressures to reduce the cost of service and face limitations
    on the existing transmission and distribution system. ATS is recognized
    as an important option for adding supplemental generation capacity on-
    site while alleviating the existing transmission and distribution
    limitations.
        Question. Does the Department feel the market for the utility scale
    turbine will develop prior to the market for the industrial scale
    turbine, or the reverse?
        Answer. The Department feels that both markets are significant. In
    the industrial program, the advent of utility deregulation is doubling
    the projected sales of these turbines over the non-deregulated case by
    2005. These industrial turbines will be cost competitive to central
    generation. The timing for the market for the industrial scale mirrors
    the development very well. For example in California, in 2001 all
    generation will compete on an economic basis with no favored status for
    central utility generation. This means that low emission, low cost
    products such as the industrial scale turbine will be in demand for
    distributed generation (local small scale generation) and cogeneration
    applications since this will be the best product on the market. Under
    the current funding profile, the ATS program will have products ready
    by 2002 and will be poised to impact this market. Twelve other states
    have legislation pending. Essentially, the markets for utility and
    industrial gas turbines are following a close timeline. In the Report
    to Congress Comprehensive Program Plan for the Advanced Turbine
    Systems, the engine manufacturers (both utility and industrial) outline
    the best time frame for introduction of both an utility and industrial
    gas turbine. Under the original funding profile, these industrial
    products would be ready in 2000.
                         industrial assessment centers
        Question. The justification indicates that the Department is
    supporting Industrial Assessment Centers. What sort of follow-up is
    performed by these centers to determine how many audits lead to
    installation of energy saving technologies?
        Answer. All centers are required to contact a client firm 6 to 9
    months following their assessment to confirm those recommendations that
    will be implemented. Implementation action during the 2 year period
    following the industrial assessment may be counted, recognizing that
    some recommendations may require capital budget planning.
                                nice \3\ grants
        Question. Are NICE \3\ grants frequently used to demonstrate
    technologies developed in the Industries of the Future program?
        Answer. The NICE \3\ grants are frequently used to demonstrate
    technologies that are directly related to the Industries of the Future
    (IOF.) Since the Industries of the Future focus on pre-competitive
    research, it is not always possible to directly link IOF funded
    research to NICE \3\ grants. However, it is possible to link the
    research areas of the IOF's to the NICE \3\ grants. While the NICE \3\
    proposals are not limited to the Industries of the Future, the vast
    majority of the projects are directly related to the Industries of the
    Future research areas. Using only grants to the State of California by
    way of example, six of the seven demonstration projects are related to
    previous research areas funded by the Office of Industrial
    Technologies.
        Question. Is any follow-up of NICE \3\ grants performed to
    determine how many demonstrations lead to large-scale implementation of
    particular energy savings technologies?
        Answer. Yes, follow-up is performed on all NICE \3\ grants to
    determine how many demonstrations lead to implementation of particular
    energy savings technologies. When sales have occurred, methodologies to
    measure energy savings are jointly developed by the grantee and NICE
    \3\ and energy savings are calculated for all installations.
        Question. Please provide for the record an example of a NICE \3\
    grant made during fiscal year 1997.
        Answer. The grants for fiscal year 1997 have not yet been made.
    Awards will be announced in April 1997. An example of a NICE \3\ grant
    made during fiscal year 1996, the most recent year at the present time
    for grant awards, is the Oxy-Fuel Burners for Steel Reheating project.
    The awardees in this example are the Indiana Department of Commerce,
    Energy Division, and Bethlehem Steel Corporation. The goal of the
    project is to successfully demonstrate the use of oxy-fuel burners in a
    slab reheat furnace, to reduce energy consumption by 45 percent and
    NOx emissions by 90 percent for the converted furnace zones.
        Question. What are the differences between the NICE \3\ and Climate
    Wise programs?
        Answer. The NICE \3\ and Climate Wise programs are complementary in
    that they both deal with industries which are either developing or
    trying to locate innovative technologies to solve industrial energy
    efficiency, environmental and cost problems. NICE \3\ emphasizes
    demonstrations of specific innovative technologies while Climate Wise
    establishes partnerships with industry to plan and carry out
    comprehensive energy efficiency and environmental technology solutions
    which emphasize the adoption of technologies to minimize CO2
    emissions. The plans developed with Climate Wise partners often involve
    the implementation of NICE \3\ technologies.
                             policy and management
        Question. At headquarters, Golden and the regional offices, there
    is a continuing decrease in funds for Salaries and Related Expenses and
    an increase in funds for Contractual Services. What is the reason for
    this shift?
        Answer. The increase of $1,570,000 in contractual services at
    headquarters is primarily the result of a realignment of the Working
    Capital Fund (WCF). In fiscal year 1997, the first year of the WCF, the
    amount for the Office of Energy Efficiency and Renewable Energy was
    distributed on a 50-50 ratio for Interior and Related Agencies
    (Interior) and Energy and Water Development programs. In fiscal year
    1998, the split for the WCF reflects a more equitable distribution of
    the funding request since the costs for the WCF are primarily driven by
    the number of staff supported and approximately 77 percent of EE's
    FTE's are in Interior. A total of $1,019,000 of the $1,570,000 increase
    is attributed to this more equitable distribution of the WCF.
        The balance of the increase at headquarters is $551,000 to help
    support crosscutting activities such as the continued development of
    quality metrics and performance measurement activities.
        The $102,000 increase in contractual services for the Regional
    Support Offices (from $3,928,000 in fiscal year 1997 to $4,030,000 in
    fiscal year 1998) is less than 3 percent and is the result of projected
    inflationary increases for rental costs, communications, and utilities.
        The $1,090,000 increase in contractual services for the Golden
    Field Office reflects two principal activities. The first is support
    service landlord activities such as the costs for several contract
    employees to assist with procurement and personnel functions.
    Additionally, the increase supports project monitoring and technical
    and administrative support of program specific functions such as
    National Industrial Competitiveness through Energy, Environment, and
    Economics (NICE \3\).
                     fossil energy research and development
    General
        Your testimony (page 8) states that the 5 percent decrease in the
    request for Fossil Energy Research and Development is justified because
    many of the gas and coal-fueled power systems supported by the
    Department are entering their final phase of development.
        Question. Isn't the final stage of development generally the most
    expensive part of the R&D ``pipeline'' that the Department often
    describes?
        Answer. Yes, the final stage of development is generally more
    costly as a technology scales up for eventual market readiness.
    However, it is also true that as development of the technology matures,
    an increasing percentage of the cost participation is sought from
    industry. In addition, generally there are either fewer participants
    selected to enter the final stage, or as, in some cases, a program
    schedule stretch out can be accommodated by a widening of the time
    window of opportunity for market entry due to changes in market
    conditions.
        Question. In light of the funding situation in programs such as
    LEBS, the Advanced Turbine System, molten carbonate fuel cells, and
    solid oxide fuel cells, does the Department still feel that the
    statement in its testimony is accurate?
        Answer. The Department believes that statement in the testimony as
    reflected in the budget request is reasonable considering several
    factors such as the current budget constraints, the need to balance our
    energy portfolio, and the planned structure of these programs.
        Question. Will the Department request decreases or termination of
    these programs in fiscal year 1999 as they get further into the final
    stages of development?
        Answer. The Department at present does not anticipate requesting
    termination of these programs as long as they continue to show good
    progress, as they have thus far, in achieving their objectives.
        Question. The Environmental Protection Agency has provoked
    considerable controversy with the release of its draft rules on
    particulate matter. It seems to me that many of the technologies being
    supported by the Fossil R&D budget will be essential if this country is
    ever to achieve the considerable reductions in particulate matter
    contemplated by the proposed rules. In light of the fact that the
    fiscal year 1998 budget request reduces and stretches out a number of
    key Fossil R&D programs, do you feel the Administration is taking a
    balanced approach to improving air quality?
        Answer. The levels of funding proposed for fiscal year 1998 reflect
    a balancing of the funding of R&D and the need to reduce Federal
    expenditures. Even at the reduced funding level, the program will
    produce important results. The funding levels proposed are deemed to
    achieve an appropriate balance.
        Question. Will reductions in the Fossil R&D budget make it less
    likely that cleaner generation technologies will be available to
    achieve the proposed regulatory targets?
        Answer. The need to achieve reductions in Federal expenditures and
    the large number of competing R&D needs require difficult decisions.
    However, even at the reduced levels of funding proposed, the remaining
    program can make technologies available in a timely manner.
        Question. Is it the Administration's policy to achieve air quality
    goals by reducing support for R&D and emphasizing the use of regulatory
    techniques?
        Answer. No. The proposed reductions in R&D reflect a balancing of
    priorities among many competing R&D needs, while still achieving
    necessary reductions in the levels of Federal spending.
                              advanced clean fuels
        Question. Funds are requested to continue advanced liquefaction
    both in-house and with various contractors such as CAER. What progress
    is being made in this area?
        Answer. Baseline economic studies conducted in the early 1990's
    estimated that liquefaction technologies were competitive with crude at
    about $34 per barrel in greenfield plants. Continued advanced clear
    fuels research and development, such as that to develop improved slurry
    catalysts, and improvements in solvents have the potential to reduce
    cost to the mid-twenties per barrel or less for greenfield plants. In
    addition, coprocessing of coal, resid and wastes to produce a low
    sulfur distillate syncrude for refinery upgrading in facilities
    adjacent or integrated with existing refineries offers the potential to
    reduce these costs to less than $20 per barrel and even lower if
    combined with technology improvements currently under development.
        Question. Are significant further advancements in liquefaction
    technology likely to be achieved without construction of demonstration
    units?
        Answer. Yes, continued progress is being made in advanced
    liquefaction technologies. Continued laboratory and bench scale
    research and development, such as that to develop improved slurry
    catalysts, and improvements in solvents have the potential to reduce
    cost to the mid-twenties per barrel or less for greenfield plants. In
    addition, coprocessing of coal, resid and wastes to produce a low
    sulfur distillate syncrude for refinery upgrading in facilities
    adjacent or integrated with existing refineries offers the potential
    for earlier introduction by reducing the cost of syncrude distillate to
    less than $20 per barrel or lower when combined with technology
    improvements under development. While demonstration of these
    technologies will be required prior to commercial deployment,
    additional laboratory and bench scale progress will further reduce
    cost, increase efficiency, and improve environmental performance,
    shortening the time to deployment.
        Question. Has the Department considered ``shelving'' further
    advanced liquefaction research until oil prices rise to a level likely
    to resurrect interest in the technology?
        Answer. No. The Energy Information Administration in its Annual
    Energy Outlook projects that crude oil could be $21 per barrel in their
    reference case or as high as $28 per barrel in 2015 in 1995 constant
    dollars. The EIA points out that U.S. will be importing over 60 percent
    of its oil supply in 2015. Continued laboratory and bench scale
    research and development have the potential to reduce cost to the mid-
    twenties per barrel or less for greenfield plants. In addition,
    coprocessing of coal, resid and wastes to produce a low sulfur
    distillate syncrude for refinery upgrading in facilities adjacent or
    integrated with existing refineries offers the potential for earlier
    introduction by reducing the cost of syncrude distillate to less than
    $20 per barrel or lower when combined with technology improvements
    under development. With continued development these technologies would
    be available for use in this timeframe. If the activity where to be
    ``shelved'', it could take ten years or longer to rebuild the technical
    infrastructure and knowledge base after the need was identified.
        Question. Is significant further cost reduction through bench scale
    research likely?
        Answer. Yes, continued bench scale development may reduce cost to
    the mid-twenties per barrel or less for greenfield plants. In addition,
    coprocessing of coal, resid and wastes to produce a low sulfur
    distillate syncrude for refinery upgrading in facilities adjacent or
    integrated with existing refineries offers the potential for earlier
    introduction by reducing the cost of syncrude distillate to less than
    $20 per barrel or lower when combined with technology improvements
    under bench scale development.
        Question. $100,000 is being requested in both Direct and Indirect
    Liquefaction to initiate a pioneer plant feasibility study. When will
    this study be completed?
        Answer. It is envisioned that this study would take about 18 months
    to define the conceptual project, site issues and potential database
    needs.
        Question. Is the study necessary for the Department to evaluate
    whether to proceed with development of a pioneer plant?
        Answer. The primary purpose of this study is to provide a body of
    process information and engineering data which will be used by a strong
    industrial team preferably including end users (refiners, electric
    utilities), technology developers, A&E's, coal companies and interested
    stakeholders as well as DOE to establish the advisability and context
    for entering into a partnership to design, construct and operate
    several pioneer plants which will produce liquid fuels and chemicals.
        Question. Given current budget constraints, is it likely that the
    Department would budget for development of a pilot plant in the
    foreseeable future?
        Answer. It is unlikely that the Federal government would cost-share
    this type of first-of-kind ``pioneer plant'' demonstration under
    current budget constraints. The Office of Fossil Energy is studying
    innovative revenue neutral or revenue positive funding options which
    would spur the possibility of implementing pioneer plant demonstration
    in the next decade. A feasibility study would be performed to provide a
    body of information to the Department and interested potential
    industrial and stakeholders, so that informed decisions could be made
    on the advisability for proceeding with pioneer plant activity.
        Question. In looking at the funds provided in fiscal year 1997 for
    activities in Advanced Research and Environmental Technology (p. 44),
    it appears that all funds for STTR and SBIR were derived from the money
    earmarked for the Consortium for Fossil Fuel Liquefaction Science. Why
    were all SBIR and STTR funds derived from this one activity, as opposed
    to being pro rated across all activities within AR&ET?
        Answer. SBIR and STTR funds are assessed against extramural
    activities (contacts outside of in-house work). The consortium for
    fossil fuel liquefaction is the only activity that is not an in-house
    activity and is therefore subject to the assessment. Also, it is the
    activity with the largest amount of funding, and the funds assessed for
    SBIR and STTR would have the smallest impact.
                     advance clean/efficient power systems
        Question. The ``Mission Supporting Goals and Objectives'' in the
    justification describe the target efficiencies and emissions levels for
    the four major technologies being developed with DOE support. Target
    levels for IGCC seem comparable to those given for the HIPPS and High
    Efficiency PFB programs. Why does the Department continue to fund all
    three technologies, particularly when the more near term LEBS program
    is entering a critical phase with insufficient resources to proceed?
        Answer. LEBS is nearer term, but it does not have the performance
    potential to reach our ultimate program coal of 60 percent generation
    efficiency by 2010. The latter efficiency goal coupled with the
    simultaneous achievement of our environmental and economic goals is
    extremely difficult to attain. Today, IGCC coupled with advanced
    turbines and fuel cells is the front runner, but technology development
    has not progressed to the point where we can judge, with any accuracy,
    what the final winning system will be. A LEBS system could also serve
    as the bottoming cycle for one of these advanced systems, but it is too
    early to judge.
        All of the advanced power technologies are targeted towards
    achieving the highest efficiency and least emissions at the lowest
    possible cost. As such, the performance goals for these technologies
    are very similar. The Department believes that the IGCC, HIPPS, LEBS,
    and PFB technologies show much promise and based on the progress to
    date, merit continued funding. Therefore, the best approach is to
    continue to develop these most promising technologies to afford them
    the opportunity to achieve their full potential for commercialization.
    Additionally, each of these technologies has a different level of
    developmental maturity, technical risk, and time frame for market
    readiness. Their market applications also vary somewhat. IGCC systems,
    for example, are ideally suited for the coproduction of electricity and
    petrochemicals from coal (i.e., a coal refinery application).
        The Department believes that it is in the best interest of the
    nation, utility industry, and customers to have an array of
    technologies from which the power generators may choose in order to
    meet their specific needs. Therefore, the continuation of all these
    technologies is in keeping with our balanced energy portfolio strategy.
        Question. Since several IGCC plants are already operating under the
    auspices of the Clean Coal program, and since the Department's request
    for the China Clean Coal program indicates that IGCC technology is
    being well received in potential markets, does it make sense to
    continue to support development of the other technologies?
        Answer. Yes, continuing support is critical to meeting established
    program goals. The Clean Coal Technology Demonstration Program (CCT) is
    demonstrating the first generation versions of IGCC systems with
    efficiencies in the 42-45 percent range and is establishing an
    industrial base upon which further R&D advances can be achieved. The
    IGCC R&D effort under way is critical to extending the performance of
    these systems into the 60 percent range while reducing emissions to
    less than 1/10 NSPS and simultaneously reducing the cost of electricity
    by at least 10 percent, which would clearly establish our global
    leadership in this area and would provide the technological capability
    to meet a key public need--a clean environment.
        In addition, IGCC technology is being demonstrated within the Clean
    Coal Technology program at or near commercial scale, various technical
    and economic issues must be resolved before commercial acceptance is
    achieved. For example, the technical and economic issues associated
    with hot gas cleanup for particulates and sulfur capture must be
    resolved if the higher efficiencies are to be achieved through the
    integration with the advanced turbines. Effective, reliable and long
    life particulate control devices must be attained as well as effective,
    low cost, and regenerable sorbents for sulfur control. IGCC costs must
    continue to be reduced through design optimization and reduced
    construction costs in order to be competitive in a deregulated utility
    market with low natural gas prices.
        IGCC technology has captured much domestic and international
    attention. However, commercial acceptance of IGCC on coal for utility
    application still depends on acceptable cost and performance targets
    being achieved.
        Question. What advantages does HIPPS technology have over IGCC
    technology?
        Answer. IGCC technology is gasification based. PFB technology is
    fluidized bed combustion based. HIPPS represents a major extension of
    more conventional combustion technology employing ceramic heat
    exchangers and/or advanced furnace designs. It represents an
    alternative design approach for generating power cleanly and at high
    efficiency.
        Question. Would it appeal to a different sector of the market?
        Answer. Both IGCC and HIPPS technologies are aimed primarily at
    utility scale power applications. However, IGCC has the ability to
    utilize a broad range of coals and fuels and the capability to operate
    in a co-processing configuration to produce coal-based liquid fuels and
    other chemical feedstocks and products in addition to generating power.
    It appears that IGCC technology may be commercially available much
    earlier than HIPPS.
        Question. The Department has argued that stretching out certain
    advanced power generation programs (such as turbines) is acceptable
    because market uncertainty resulting from utility deregulation has
    pushed back the ``market window''. Could this mean that the need for
    medium-term technologies being developed with DOE support could be
    lessened, and that emphasis should instead be placed on longer term,
    higher-performance technologies?
        Answer. The coal and gas power systems technology being developed
    today is driven by the long term goals of 60 percent efficiency with
    coal (70 percent with gas) and with emissions more than 90 percent
    below today's modern regulated plant, while reducing the cost of
    electricity. This technology achievement would also cut CO2
    emissions from coal power plants by almost half at no cost to the
    ratepayer. The achievement of this long term goal requires the
    development of technology for turbines, fuel cells, IGCC, and other
    program elements from where it is today to its mid-term goal state and
    eventually to its long term goal--i.e., the mid-term goal is really an
    intermediate milestone on the path to meeting our long term objectives.
        Question. Have recent changes in the anticipated development of
    power generation markets changed DOE's funding priorities in the
    Advanced Clean/Efficient Power Systems program?
        Answer. While U.S. power generators are cutting costs and delaying
    power generation capacity additions, EIA is forecasting 39GW of coal
    based capacity additions/replacements (that is about a $39 billion
    investment or 390 100-MW plants) and over 100 GW (that is about 1,000
    100-MW plants) of gas based additions by 2015. This is still a
    substantial market which will grow even more after 2015. The global
    market remains huge. As a result, we have made some changes in the
    program (such as increased emphasis on initial capital cost reduction
    through technology advances), but our major program goals remain as
    before. The Fossil Energy RD&D program maintains a balanced support for
    a number of technologies in its portfolio. This balanced approach
    reduces the overall risk in achieving the Fossil Energy mission. The
    mix of technologies, their respective development schedules, their
    respective performance potentials and other factors are considered in
    the formulation of our budget request profile.
                          low emission boiler systems
        Question. Information supplied by the Department indicates that the
    funding request for LEBS for fiscal year 1998 would only be sufficient
    to fund one of the three competing technologies. How does the
    Department propose to make a rational, competitive selection of the
    best LEBS proposal in the face of these funding constraints?
        Answer. The process for selecting a developer to continue Phase IV
    of the LEBS program will be to form a Federal team of experts who will
    review and evaluate the Phase II and Phase III results as submitted by
    each of the three contractors. Selection will be based on an evaluation
    of the submissions and arrived at by a ranking grounded on a set of
    technical and other criteria.
        Question. Has the Department attempted to restructure Phase IV of
    the program in a way that might allow performance, as opposed to
    available funding, be the determining factor in the downselection?
        Answer. While we have considered some alternatives, the down-
    selection to a single contractor for Phase IV is in keeping with the
    original program concept. Fossil Energy intends to evaluate the three
    submissions for Phase IV based on a comprehensive set of criteria as
    stated above.
                         particulate control/air toxics
        Question. In Advanced Research and Environmental Technology, an
    increase is requested for Fine Particulate Control/Air Toxics while a
    decrease is requested for Super Clean Systems. Will the Department
    terminate support for the B&W Air Toxics Facility in fiscal year 1997
    as indicated in the budget justification?
        Answer. Funding support of the B&W Air Toxics Facility as
    originally planned was completed in fiscal year 1996. Funding support
    for this facility was not included in the fiscal year 1997
    Appropriation, and no funds are being requested for fiscal year 1998.
        Question. Will the increase in Particulate Control/Air Toxics
    simply allow for more contracts to be pursued from the fiscal year 1995
    Mega PRDA, or will it accommodate more costly work being done on the
    same contracts?
        Answer. In fiscal year 1998 the MEGA PRDA contracts reach the end
    of phase 1 at which time the plans are to select a reduced number of
    projects to enter phase 2. Since the phase 2 research will be at a
    somewhat larger scale, the amounts required for each project selected
    will be greater than it was in phase 1.
        Therefore, the requested funding will support a reduced number of
    projects in phase 2, but those supported will likely be funded at
    higher levels than they were in phase 1.
        Question. What would be the impact of maintaining Particulate
    Control/Air Toxics at the fiscal year 1997 level?
        Answer. Funding below the requested level would require reductions
    in technology base research on new methods of measuring and
    characterizing mercury emissions, thereby increasing the risk that
    current inaccurate approaches would be employed by the EPA in setting
    standards. That could lead to significant over-control with very high
    cost implications, since current methods are believed to overestimate
    the emissions which could be subject to control.
        There would also be a reduction in the number of MEGA PRDA projects
    that could be funded, and possibly would require stretchout or reduced
    funding of those that were funded. This would increase the risk that no
    cost-effective technology for reduction of mercury emissions would be
    forthcoming. As of now, there is no cost-effective technology for
    achieving control of mercury.
        Question. How does work being done in both Particulate Control/Air
    Toxics and Super Clean Systems relate to the EPA's proposed rule on
    particulates and ozone?
        Answer. All of this work addresses improving the cost-effectiveness
    of control technologies for all the above emissions. In Super Clean
    Systems, advanced technologies are being developed to further reduce
    SO2 and NOx emissions, which are precursors to
    ambient fine particulate levels. Reduced NOx emissions will
    be required to meet proposed ozone regulations. Hence, all of this work
    is applicable to addressing the need for improved approaches to meeting
    potential future regulatory requirements for reductions of those
    precursor species.
        Question. Why is funding for contracts under Super Clean Systems
    being decreased while those under Air Toxics are being increased?
        Answer. Given the need for reduced levels of Federal expenditures
    and the many competing R&D needs, not all of the activities can be
    fully funded.
        Since there are no acceptable methods for measuring,
    characterizing, or controlling mercury emissions, which are a primary
    focus of attention under the air toxics provisions of the Clean Air
    Act, that activity was assigned a higher level of funding.
                  advanced research and technology development
    Coal technology export
        Question. $1,047,000 is requested for Coal Technology Export.
    Exactly how will these funds be used?
        Answer. A goal of the Department of Energy's Strategic Plan is to
    enhance energy productivity to strengthen the United States economy and
    improve living standards by promoting programs that will establish the
    United States as a world leader in developing and deploying energy
    technologies and services throughout the world. Fossil Energy will
    achieve this goal by funding coal technology export programs that will:
      --Protect and expand international demand for U.S. coal and U.S. coal
            technology;
      --Provide technical assistance to foreign governments;
      --Level the playing field for U.S. industry by helping to eliminate
            economic/political/social barriers to international trade; and
      --Facilitate trade promotion and trade finance.
        Question. Travel costs for DOE personnel on trade missions?
        Answer. Travel costs are usually covered within Fossil Energy's
    Program Direction line item. No Fossil Energy Coal Technology Export
    funds are planned to be used to pay for any travel costs.
        Question. Technical support?
        Answer. Fossil Energy does have a series of Memoranda of
    Understanding and other international agreements where technical
    information is shared between countries. However, none of Fossil
    Energy's international programs provide for ``direct technical
    support'' to a foreign government or industry.
        Question. How do funds expended in this activity relate to
    functions performed and services provided by the Department of
    Commerce, the State Department and other agencies?
        Answer. Fossil Energy's efforts are complementary to and are not
    duplicative of efforts done by other agencies. The work of Fossil
    Energy is focused upon expanding the use of Clean Coal and Advanced
    Power Technologies into world-wide markets. Fossil Energy is a member
    of a number of inter-agency committees (e.g., Trade Promotion
    Coordination Committee--Dept. of Commerce) to ensure that Federal
    agencies are not duplicating efforts and that the most effective use of
    the Federal dollar is realized.
                             bioprocessing of coal
        Question. Funds are requested in fiscal year 1998 to continue work
    on the bioprocessing of coal. Does work in this area have any
    significant relationship to gasoline and diesel desulfurization work
    being performed with support from the Office of Industrial
    Technologies' Petroleum program?
        Answer. At this time, there is no significant relationship between
    work being done on the bioprocessing of coal and research on gasoline
    and diesel desulfurization work supported by the Office of Industrial
    Technologies Petroleum (OITP) program. OITP issued a solicitation in
    January 1997 seeking proposals for the biodesulfurization of gasoline
    (total funding is $800,000). However, there is an ongoing coordination
    effort between FE and OITP regarding the development of coal derived
    diesel fuels employing FE liquefaction processes for OITP diesel engine
    applications.
        The Office of Fossil Energy's bioprocessing program is focused on
    producing inexpensive liquid fuels from coal that can be used in power
    systems, and ethanol that can be used as an additive to gasoline for
    motor vehicles.
                            university coal research
        Question. An increase of approximately $1 million is requested for
    University Coal Research, with a smaller increase requested for HBCUs.
    Will this entire increase be used to fund the Innovative Concepts
    program described in the budget request?
        Answer. No. Only about $500,000--$750,000 will be directed to
    seeking innovative concepts having the potential of making
    revolutionary advances in coal utilization technologies. The rest will
    be used to address key focus areas of high priority in the Fossil
    Energy program, such as NOx control, mercury abatement, and
    CO2.
        Question. Could the program be initiated with a lesser amount of
    funding and grants?
        Answer. The effectiveness of the program would be severely reduced
    with further budget reductions. The program had been supported at about
    $5 million through fiscal year 1995. It was reduced to about $4 million
    in fiscal year 1996, and further reduced by Congress to about $3
    million in fiscal year 1997. So the fiscal year 1998 request is merely
    a partial restoration of the funding needed to adequately address the
    broad spectrum of research and the novel and innovative concepts that
    may spawn this nation's next generation of advanced, cleaner and more
    efficient coal conversion and utilization technologies.
        Question. Can the Department provide some examples of research that
    has been funded in this activity during the last few years that has
    contributed directly to the development of coal power system
    technologies being developed with DOE support?
        Answer. Since the inception of the University Coal Research (UCR)
    Program in 1979, research grants awarded to U.S. Colleges and
    Universities have contributed directly to the development of more
    efficient and environmentally acceptable coal power system
    technologies. Many of these researchers have received patents and
    various citations. The following are just a few examples:
        Researchers at the Virginia Polytechnic Institute developed a coal
    cleaning process that produces a ``super-clean'' coal using microbubble
    flotation. It provided a way to significantly reduce the ash and
    pyritic sulfur in U.S. coals thereby enabling the use of coals that
    were previously discarded as waste because they could not be cleaned
    with conventional technology. Initial development of the process, which
    is now known as the Microcel Process, was supported by the UCR program
    over a period of four years. It is now in commercial use throughout the
    world.
        University of Pittsburgh researchers received a patent for their
    work originating from a UCR Grant in coal liquefaction catalysis.
    Through their research efforts, a method for synthesizing methanol at
    temperatures far below those used in commercial synthesis was
    developed.
        Dr. Sarofim, the recipient of several UCR awards, has contributed
    significantly to the understanding of the mechanism of coal combustion,
    leading to research in reducing the environmental impacts of coal. He
    was recognized for his work in combustion engineering and nitrogen
    oxide chemistry by receiving the 1995 Homer H. Lowry award from the
    Secretary of Energy. This is the highest such award in the area of
    fossil energy by DOE.
        Dr. Donald P. Olah, University of Southern California, won a
    University Coal Research grant to study superacid catalysts for coal
    conversion. He subsequently received the Nobel Prize for his work in
    the creation of these superacids. Dr. Olah's work significantly
    contributed to technologies for producing lead free gasoline and
    numerous industrial processes.
                               internship program
        Question. Why is the Department requesting new funds for an
    internship program that will focus on undergraduates at colleges
    without graduate programs in science and engineering?
        Answer. The Internship subprogram element, which is part of the UCR
    program, provides opportunities for undergraduate science and
    engineering students nationwide to experience a graduate level research
    environment. Students who apply to and are accepted in the program are
    placed at host laboratories across the country for 10-week summer
    internships. Hosts for the students are grant recipients under the UCR
    program. The host provides a research project, space, and materials for
    the intern and the intern's costs (room, board, stipend, and travel)
    are covered by the Internship Program. This provides an opportunity for
    promising undergraduate students to make decisions about entering into
    graduate programs that deal with energy-related research, and
    ultimately work in energy-related fields that promote technology
    development.
        Question. How does this help meet the goals of the Fossil Energy
    Research and Development program?
        Answer. The internship program provides opportunities for
    undergraduates to be exposed to high levels of scientific research
    which may influence their pursuit of graduate education in their areas
    of interest, as applied to Fossil Energy. This program promotes the
    development of U.S. based technical expertise in fossil energy and
    energy-related technologies. The Administration's technology plan of
    February 23, 1993, recognizes this by setting a key goal for the
    Nation, to be a world leader in science, mathematics, and engineering.
    Furthermore, the Performance Agreement between the President of the
    United States and the Secretary of Energy supports the Administration's
    Goals 2000 objective of recapturing U.S. preeminence in science and
    math education.
        Question. Is $5,000 per internship a reasonable price for this
    activity?
        Answer. The intern's costs for room, board, travel, and stipend for
    10 weeks are marginally covered by the $5,000 per student. If these
    funds are not provided, many of our potential hosts will not be able to
    accept interns based upon local costs of living and travel costs.
    Targeted students will not be able to make up the difference in most
    cases.
                    minority institutions eligible for funds
        Question. What are the ``other minority institutions'' eligible for
    funds appropriated for the HBCU activity?
        Answer. Beginning in fiscal year 1997 the Office of the Assistant
    Secretary for Fossil Energy expanded the program to include Other
    Minority Institutions. This was requested by Congress in order to be in
    compliance with the Department of Energy Hispanic Outreach Initiative
    Strategic Plan. Eligible OMI organizations must be on the official
    Department of Education--Office of Civil Rights--listing of Minority
    Institutions. There are certain ethnic population requirements of
    school enrollment to be classified as a Minority Institution.
    Institutions that have more than 25 percent Hispanic, Asian, or Native
    American are eligible.
        Question. When did such institutions become eligible for these
    funds?
        Answer. They became eligible in fiscal year 1996, but because of
    confusion over the official definition of what constitutes a minority
    institution, a decision was reached by Fossil Energy management to
    postpone OMI inclusion until fiscal year 1997.
        Question. How many such institutions are there?
        Answer. According to our information there are 360 ``other''
    minority institutions that fit the definition of minority institutions
    as described in 10 U.S.C. 2323(a)(1)(c) and 20 U.S.C. 1135-d-5(3). This
    definition is used by the Department of Education from which we derived
    our list.
        Question. Given the expansion in eligibility for these funds, is
    there an appreciable difference in the way in which HBCU and University
    Coal Research funds are utilized?
        Answer. Yes, there are several differences in the way the funds are
    utilized which overshadow the similarities of the UCR and HBCU/OMI
    Programs. Those differences include:
      --1. The HBCU/OMI Program includes oil and natural gas, while the UCR
            program does not.
      --2. The HBCU program covers a broad spectrum of energy-related
            areas, while the UCR program addresses ``key research focus
            areas'' that deal with specific coal technology needs, and an
            ``innovative concepts'' area that takes advantage of research
            outside of the traditional fossil energy area.
      --3. The UCR Program is open to all Universities/Colleges, while the
            HBCU/OMI Program is restricted to just those that are actual
            HBCU or minority institutions.
      --4. A research and technology transfer symposium is held annually in
            the HBCU/OMI Program that includes more than just technical
            papers. It is a forum for various DOE sites and offices
            (national labs, EE, ER, etc.) to showcase opportunities for the
            HBCU/OMI. It also focuses on the students of the institutions
            and includes oral presentations and poster presentations by the
            students.
                                  natural gas
        Question. The Department is again requesting funds to initiate
    development of a ``revolutionary/smart drilling system.'' Has the
    Program Research and Development Announcement been issued for this
    program?
        Answer. A solicitation for cooperative agreement proposals for
    ``Advanced Drilling Systems'' was issued on December 2, 1996. Proposals
    were received on February 3, 1997.
        Question. If so, what was the response and how many contracts have
    been entered into?
        Answer. The proposals are under technical and cost evaluation at
    this time. Information relative to the number of proposals can't be
    released at this time due to procurement regulations. The solicitation
    provided for multiple awards, however the actual number of awards can't
    be identified at this time due to procurement regulations.
        Question. Does the Department anticipate the same funding profile
    described to the Committee pursuant to last year's hearing?
        Answer. The revised funding profile anticipated for the project is
    as follows: fiscal year 1996--$200,000, fiscal year 1997--$781,000,
    fiscal year 1998--$750,000, and $1,769,000 of outyear funding.
                           coal mine methane program
        Question. The Department has again request funds for a coal mine
    methane program. How would these funds be administered?
        Answer. These funds would be administered through the Federal
    Energy Technology Center (FETC), which has responsibility for
    implementation of the coal mine methane program. The funds would be
    awarded to five contractors selected for Phase II engineering design
    preparation.
        Question. As competitive grants?
        Answer. Ten Phase I awards were made in fiscal year 1995 for
    feasibility studies in response to a competitive solicitation that
    sought proposals for cost-shared demonstrations of alternative ways by
    which recoverable methane released in the course of underground coal
    mining could be economically utilized. Based on FETC assessment of
    these studies, five of the proposers were selected for Phase II
    engineering design preparation.
        Question. How many demonstrations would the requested amount likely
    fund?
        Answer. The requested amount would fund the Phase II Engineering
    Design for the five contractors selected.
        Question. Would the demonstrations be multi-year?
        Answer. The demonstrations would be multi-year. Subject to the
    Phase II results, three demonstrations might possibly be sufficient to
    define the most cost-effective and greatest benefit options for
    commercialization.
        Question. How much time and Federal investment would likely be
    necessary to demonstrate methane recovery to the point where mining
    operations would regularly employ such technology?
        Answer. The time and investment for the methane recovery and
    utilization technologies selected for mine demonstration will likely
    vary for each of the alternatives selected. For any given technology to
    be regularly used in mining operations, we would expect a period of
    about 5 years to be required. Individual mine demonstrations should be
    completed in three years. Adopting successful technology for use in a
    significant share of mining operations would require another 2 years.
    Total additional funds required, including the fiscal year 1998 request
    of $963,000, are estimated to be $4 million. For any given mine
    demonstration project, the industry cost-sharing contribution will be
    greater than the Federal funds required.
                           advanced turbines program
        Question. The Department is requesting $31.4 million for the
    advanced turbines program. If funded at the request level, how long
    would completion of the turbines program be delayed?
        Answer. A delay of up to 2 years would result.
        Question. When would Phase III be completed and a downselection be
    made for Phase IV?
        Answer. The Department anticipates that it will complete Phase III
    in early fiscal year 1998, assuming no unforeseen technical issues or
    other program uncertainties arising that might impact cost and
    schedule.
        Question. What is the estimated Federal cost of Phase IV?
        Answer. Based on the current schedule, the estimated federal cost
    of Phase IV of the program is approximately $155 million.
        Question. How would the stretch-out associated with the budget
    request impact market entry of advanced turbine technologies?
        Answer. The primary impact of the stretch out on market entry would
    be a 2-year delay, possible cost increases due to the increased
    development costs. It is reported that the turbine manufacturers
    believe that it is in the best interest of program cost and U.S.
    competitiveness to maintain the currently planned levels of funding
    given in the Report to Congress, inclusive of additions to the
    Administration's fiscal year 1998 budget request that have been
    identified in recent public testimony. They believe this will achieve
    the lowest total program cost and provide a commercially available,
    U.S. manufactured system to the marketplace earliest, allowing U.S.
    companies to challenge other international competitors for major orders
    which will produce U.S. jobs.
        Question. Is it the Department's view that the ``market window''
    for this technology has been pushed back, enabling the development
    program to be stretched out?
        Answer. The demand for new generation and uncertainties in the
    market due to the electricity industry restructuring have had some
    effects that could likely widen the domestic ``market window'' for some
    of the technologies planned for market entry during the post-2000
    timeframe. In addition, the advanced turbine development program
    stretch out, as is the case for most of the program in our power
    systems technology portfolio, is necessitated in order to meet budget
    constraints and to maintain a balanced funding for all these promising
    technologies.
        Question. Is the Department considering modifications to the
    program that would prolong Phase III and increase contractor
    participation/risk in Phase IV?
        Answer. The baseline program as reflected in the fiscal year 1998
    budget request assumes a down selection to one developer for Phase IV.
    The Department is also evaluating the feasibility of modifications to
    the program that would continue government participation with both
    contractors. This could allow the DOE to invest government funds in
    only critical areas to reduce industrial risks and achieve the goals of
    the program. Under this scenario, the Phase IV long-term demonstration
    would be completed by the contractors without government participation.
        Question. How would this impact costs in fiscal year 1998?
        Answer. The cost impact in fiscal year 1998 would remain unchanged.
        Question. How much funding would be required in fiscal year 1998 to
    keep the program on schedule?
        Answer. As indicated in our 1994 Report to Congress, $58.6 million
    would be required in fiscal year 1998 to keep the program on schedule.
        Question. Is market entry for utility-scale advanced turbines
    likely to occur at the same time as the industrial-scale turbines being
    developed with Energy Conservation support?
        Answer. Yes; market entry for both utility scale and industrial-
    scale advanced turbines is anticipated to occur within the same
    timeframe.
        Question. Can one program accommodate stretch-out better than the
    other?
        Answer. Both programs are of high priority to the Department and
    target different markets. The fiscal year 1998 budget takes into
    account our balance of these programs, along with others in our energy
    portfolio, given the current budget constraints.
                                gas utilization
        Question. In Gas Utilization, the Department is investigating
    technologies that would allow economic delivery of Alaska North Slope
    gas via the Trans-Alaska Pipeline. What is the estimated window of
    opportunity for development and implementation of this technology?
        Answer. A recently completed, detailed study for the Department
    (Economics of North Slope Gas Options, August 1996), placed the period
    of 2009-2016 as the time within which production from existing ANS
    reservoirs would dwindle to the point that continued operating
    viability of the Trans-Alaska Pipeline (TAP) would be jeopardized
    because of low oil throughput. This would mean that supplemental GTL
    liquids, miscible with the crude still being transported, would be
    desirable by 2009. Allowance for a minimum of 2 years of construction
    time and 2 years for permitting, design and early component ordering
    would mean that economical, commercially ready (demonstrated), advanced
    GTL technology should be ready by 2005 or so, to be prudently ready for
    early onset of low flow TAP problems. Thus, advanced GTL process
    development and pre-commercial testing should be done by 2005 so that
    initial commercial implementation on the North Slope could be
    attainable by 2009 to insure that TAP operation is not halted because
    of insufficient liquid throughput.
        A number of factors influence when the critical flow point is
    reached: production from new ANS reservoirs, gains in crude prices,
    improved oil recovery and others factors could act to extend the TAP
    ``jeopardy'' time horizon. However, lower than expected reservoir
    recoveries or crude prices, or other events could trigger an earlier
    date than 2009 for pipeline jeopardy.
        Question. How much interest and financial commitment is there from
    companies doing business on the North Slope?
        Answer. Since becoming aware of the North Slope gas option analysis
    undertaken in 1995 and 1996 for the Department by its Idaho National
    Engineering (and Environment) Laboratory (INEL), Arco and BP (the
    principal North Slope oil operators) appear to have increasing interest
    in GTL as a possible option for utilization of North Slope gas now seen
    as essentially unmarketable. This is particularly the case for the 21
    trillion cubic feet (TCF) of recoverable gas at the giant Prudhoe Bay
    reservoir. Produced with the oil, this gas is currently being
    reinjected into the reservoir to maintain reservoir pressure for
    optimum oil recovery. However, with the projected conclusion of
    Prudhoe's oil producing life in 10 or so years, this gas will be ready
    for sale around 2005. The operators were helpful to INEL in reviewing
    an early study draft for factual accuracy, and they also have recently
    agreed to add GTL to their joint study efforts directed to reducing
    investment costs of North Slope gas marketing options.
        Question. Is gas-to-liquids technology likely to be equally
    applicable on the North Slope as in the Gulf of Mexico?
        Answer. It is too early to comfortably suggest gas-to-liquids (GTL)
    technology has equal potential in the Gulf as on the North Slope. Much
    will depend upon how a number of factors will stack up for respective
    companies in specific situations. The highest potential situations
    would be those where gas is totally without a nearby market (North
    Slope) and thus very low value gas. Pipeline access will also be an
    important factor. If such access is not readily available through
    gathering line extension, and if the lack of gas transport means that
    production of the potential flow of associated crude oil is not
    permitted, the producer might well be interested in relatively costly
    GTL simply to obtain the profit from the otherwise locked in oil. Other
    situations will also bear examination, including those that might fit
    market niches, where gas could be converted into `liquefied natural
    gas' (LNG) at a remote Gulf site and barged to shore for use in peak
    gas storage activity. This is why the GTL research program seeks to
    encourage development of a variety of GTL process options, geared to
    both large and modest-scale operations, and development of technologies
    that can be adapted to these specific situations.
        Question. Is it likely to become economical in one location before
    the other?
        Answer. At the current constrained pace of GTL development, and for
    reasons cited earlier, a definitive answer is extremely difficult.
    Given the economics of scale of current GTL technology, despite the
    capital and operating penalties of working in the climatic conditions
    of the North Slope, a best guess at this point in time is that advanced
    GTL technology would show better economics for the North Slope than for
    operations in the Gulf using higher priced gas.
                       status of ceramic membrane project
        Question. What is the status of the ceramic membrane project
    initiated with AMOCO?
        Answer. After several months of negotiations between Amoco and Air
    Products, the firm that allied with Amoco in submitting an unsolicited
    proposal to develop and demonstrate the ceramic membrane technology for
    gas-to-liquids (GTL) application and which was accepted by the
    Department, it became apparent to Department procurement officials that
    the two firms could not consummate a formal agreement to collaborate in
    this work. After due notice by the Department, the proposal acceptance
    was canceled in September 1996. Because the work was deemed important
    and appropriate for the GTL research program, however, a competitive
    solicitation for comparable work was prepared and announced in December
    1996, with a closing date of February 28, 1997. Proposals are currently
    being evaluated with selection tentatively scheduled for Spring 1997.
                      environmental technology development
        Question. A significant increase is requested in Environmental
    Research/Regulatory Impact Analysis for Technology Development. Are
    there specific regulatory requirements that precipitated the requested
    increase?
        Answer. The request for increased funding in Environmental
    Technology Development was not prompted by specific regulations, but by
    the identification of this area as a high priority for the industry and
    the nation. The Department not only has expertise and technology to
    offer to the industry through the national labs and other facilities,
    but the process of developing and applying lower cost environmental
    compliance technologies can lead to a better understanding of
    environmental risks that contributes to better regulatory
    decisionmaking.
        However, in turning to industry to ascertain their technology
    development priorities, the program has found that those priorities are
    driven by regulatory requirements. For example, industry advisors
    recommended that the fiscal year 1997 request for proposals from
    national laboratories-industry collaborations focus on two areas:
    produced water minimization and treatment, and stationary source air
    emissions control, both the subject of recent EPA rulemakings.
    Additional recommended priorities for fiscal year 1998 include risk
    assessment for decision making, treatment and disposal of naturally
    occurring radioactive materials (NORM), and soil remediation, all areas
    that are the subject of ongoing regulatory discussions at the state and
    federal levels.
                                   fuel cells
        Question. $32.7 million is requested for the Molten Carbonate
    program. How does the amount requested compare to the amount called for
    in the original molten carbonate cooperative agreements?
        Answer. Original funding estimates in the two molten carbonate
    cooperative agreements show somewhat larger DOE amounts for fiscal year
    1998 than the request for that year (a total for the two agreements is
    $35 million in fiscal year 1998, but the total for fiscal year 1997 in
    the agreements was $55 million, indicating a prior significant
    shortfall). The impact is a slippage in the original schedule by about
    two years.
        Question. How much would be required in fiscal year 1998 to
    complete the program according to the original schedule?
        Answer. The original schedule had a completion date of 2000. The
    amount estimated to be required in fiscal year 1998 toward completing
    the program according to the original schedule is $50 million.
        Question. How much would be required to prevent further slippage?
        Answer. The amount estimated to be required in fiscal year 1998 to
    prevent further slippage beyond 2002 is $32.7 million.
        Question. Is it the Department's position that a delay in the
    molten carbonate program will have minimal impact on the success of the
    two contractors due to changing market windows?
        Answer. A delay in the molten carbonate program will have an impact
    of a 2-year delay on the ability of the two contractors to enter the
    market on original planned schedule of 2000. However, the time window
    of market opportunity has widened given the changes in the domestic
    power generation market due to the restructuring of the electricity
    generation industry.
        Question. In response to questions posed by this Committee last
    year, the Department stated that it would be prepared to evaluate the
    results of the three major fuel cell contracts at the end of fiscal
    year 1997, and that it was likely that only two contractors would
    continue full system development in fiscal year 1998. Is this still the
    Department's view?
        Answer. The Department intends to support all three fuel cell
    developers on a stretched out basis. Each of the three fuel cell
    developers is aiming for different power generation applications with
    different technologies. One molten carbonate developer is targeting the
    onsite cogeneration application, the other is focusing on distributed
    generation. The solid oxide fuel cell developer's thrust is a combined
    cycle system with gas turbines for the central station power
    application. All three contractors are making good progress in their
    respective technologies. It is in the best interests of this nation to
    allow all three to build a strong domestic fuel cell industry to
    compete in the international fuel cell market and produce very clean,
    highly efficient energy, to create numerous domestic high value jobs,
    and other economic benefits that fuel cell power systems promise for
    the U.S.
        Question. How much would be required to fully fund one molten
    carbonate contract while continuing to fund only component and stack
    development for the other?
        Answer. Funding required to fully fund one molten carbonate
    contract to develop a commercially ready power system in the year 2002
    would require about $20 million per year. Although the capital cost of
    a fuel cell stack is expected to be about 30 percent to 40 percent of
    the total powerplant cost, this ratio does not apply relative to
    amounts for development funding. The bulk of technology development for
    a fuel cell power system must be focused on the more challenging cell
    and stack issues. Thus, continuing to fund only component and stack
    development for the other contractor is estimated to be about $15
    million per year.
        Question. Does the Department view the technological problems
    experienced at the Santa Clara demonstration plant as significant, or
    as routine and surmountable?
        Answer. The general assessment by all the participants in the Santa
    Clara field test is that the plant operation was successful in spite of
    problems encountered that are unrelated to the fuel cell technology
    itself. All systems operated such that full rated power was produced
    resulting in the largest operating fuel cell power system in the U.S.
    The fundamental problem is easily surmountable and is not an issue in
    the redesign configuration for the next prototype system.
        Question. The Department is requesting $12.8 million for the solid
    oxide fuel cell development program. What would be the impact of this
    funding level on the estimated completion date of the program?
        Answer. The requested funding of $12.4 million for the solid oxide
    fuel cell development is expected to stretch out the development
    schedules for two years and reach a commercially ready power system in
    about 2002.
        Question. What would be required to keep the program on its
    original schedule?
        Answer. Funding level required to keep the program on its original
    schedule is estimated at $20 million.
        Question. The Department of Defense has been involved in the
    commercialization of phosphoric acid fuel cells. Is any money requested
    in DOD's fiscal year 1998 budget for fuel cells?
        Answer. There is no known funding requested in the DOD fiscal year
    1998 budget for a Climate Change rebate program for fuel cell systems.
        Question. If so, is the program limited to phosphoric acid
    technology? Why?
        Answer. It is our understanding that the Climate Change rebate
    program for fuel cells is intended for fuel cell systems that are
    available commercially and is not focused on any specific fuel cell
    technology. Phosphoric Acid Fuel Cell systems happen to be the only
    fuel cell technology being offered commercially at this time, but we
    know of no funding requested in the DOD fiscal year 1998 budget for the
    Climate Change rebate program.
        Question. Would either of the molten carbonate contractors be
    prepared to prepared to participate in this type of buy-down program?
        Answer. Either of the molten carbonate fuel cell contractors might
    be prepared to participate in this type of buy-down program at a later
    time when they are ready to make such commercial offerings.
                            reservoir class program
        Question. Much of the research being performed in the Oil
    Technology program is designed to increase the economic life of
    domestic wells. What progress has been made in this regard?
        Answer. The expected benefits from the Reservoir Class Program are
    proving to be greater than originally projected although the program is
    only 4 years into its 10 year duration. The economic life of wells in
    Utah, Texas, Michigan, Colorado, and Oklahoma have been increased
    through several early successes. Industry participants estimate, based
    on documented production and reservoir modeling, that transfer of the
    technologies demonstrated in 32 projects will provide an additional 500
    million barrels of domestic production. Thus far, over 43 million
    barrels in increased reserves have been achieved through initial
    technology transfer.
        Question. Have we slowed the rate at which wells are being shut-in?
        Answer. We have slowed the abandonment rate in the basins where
    these early successes were achieved. It is difficult to assess the
    overall impact we have had on the national abandonment rate because
    this data usually lags production data by 2 years and our program is
    less than half completed.
        Question. $2.1 million is requested to revisit Classes I, II and
    III of the Reservoir Class Program. What have been the benefits of the
    Class program thus far in terms of enhanced domestic oil recovery?
        Answer. Industry participants estimate, based on documented
    production and reservoir modeling, that transfer of the technologies
    demonstrated in 32 projects will provide an additional 500 million
    barrels of domestic production. Thus far, over 43 million barrels in
    increased reserves have been achieved through initial technology
    transfer.
        Examples of some early successes include:
      --Lomax/Inland Resources' waterflood in the Uinta Basin of Utah,
            going against conventional wisdom in the region, established
            viability of waterflooding in the area. During the 44 months of
            the project, 1.13 million barrels of incremental oil has been
            produced with tax revenues and royalties totaling $5.9 million.
            Thirteen new waterflood projects have been initiated by other
            companies in the region as a direct result of the DOE project,
            with an anticipated minimum of 31 million barrels of additional
            oil recoverable, worth $160 million in tax and royalty revenue.
      --Michigan Technological University, teaming with an operator in the
            Michigan Basin, targeted production from the Dundee Formation
            in the Crystal Field, one of 137 older fields that are nearing
            abandonment. The application of horizontal drilling strategies
            coupled with new computer modeling and analysis methods has
            resulted in a demonstration well producing at a rate of 100
            barrels of oil per day (BOPD), 20 times the best conventional
            well in the field. The successful results have caused 9 new
            horizontal wells to be permitted for drilling in the Crystal
            Field and 20-30 additional horizontal wells to be permitted in
            some of the other fields in the basin. Additional development
            in the Crystal Field alone is expected to recover 2 million
            barrels of oil. The redevelopment of other fields is
            anticipated to produce between 80 to 100 million additional
            barrels with an anticipated tax revenue of about $210 million.
            This technology has also been transferred through the Kansas
            region office of the Petroleum Technology Transfer Council, and
            operators are in the process of drilling a Kansas horizontal
            well.
      --Offshore, in the Gulf of Mexico's Outer Continental Shelf, the
            Lamont-oherty Earth Observatory of Columbia University
            evaluated the hypothesis that some Gulf Coast reservoirs are
            ``recharged'' periodically along faults. 4-D seismic technology
            was used to model subsurface fluid flow and to locate growth
            faults that may be pathways for oil flowing up from deeper
            formations. The first well drilled as a result of the 4-D
            seismic technology initially produced 1,500 BOPD. Federal
            revenues from this well alone will equal the amount of funding
            provided by DOE within five years. Also as a result of this
            project, $400 million in contracts have been signed between
            Western Geophysical and producers to track reservoir recharge
            using 4-D seismic.
        Question. What is the estimated increase in production on Federal
    lands attributable to technologies developed in the Class program?
        Answer. The technologies demonstrated in the Class program were
    actually developed by the oil and gas industry. The purpose of the
    Class program is to promote the technology. In an effort to estimate
    the relative ``improvement'' of Federal lands due to the DOE Reservoir
    Class Program, the ``Change Resource Implementation Probability''
    software was run on the eight Reservoir Class projects found on Federal
    Lands (of the total 29 Reservoir Class projects). The estimated
    increase in production on Federal lands attributable to technologies
    demonstrated in the Class program is almost 300 million barrels of
    domestic production.
        Question. What is the estimated increase in royalties and taxes
    accruing to the Federal government as a result of the increased
    production on Federal lands?
        Answer. The estimated increase in royalties and taxes accruing to
    the Federal government as a result of the increased production on
    Federal lands is 1.3 billion dollars.
        Question. In the Department's view, would this increased production
    have occurred, been delayed, or not occurred in the absence of DOE
    support?
        Answer. The Department believes that these increases in production
    would not have occurred in the absence of DOE support due to the risk
    involved and the availability of financing. An offset operator to
    Lomax/Inland Resources noted that, ``My management would not have
    attempted their waterfloods without seeing the results of the Monument
    Butte flood.''
                national laboratory/industry partnership program
        Question. A $2 million increase is requested for the National
    Laboratory/Industry Partnership program. Can the Department provide
    some examples of technology gains that have been achieved in this
    program in the last year?
        Answer. Prototype devices for five geophysical imaging technologies
    have been completed and are undergoing field trials, and one technology
    has been commercialized. The exploratory well success rate has improved
    to 48 percent for the first 4 months of 1996, and continued
    improvements are expected as new geophysical technologies, including
    those developed by DOE, are adopted by industry.
        The five new data processing and simulation methods projects
    successfully completed interim products. These improvements are
    expected to increase U.S. oil and gas production by 1 million barrels
    of oil equivalent starting in 2001. Accomplishments to date include:
    computer code that provides a three-fold acceleration for parallel
    processing of subsalt seismic data; multiphase fluid simulator for
    underbalanced drilling; publications on prototype computer model to
    predict geopressured reservoirs; prototype data server available on the
    Internet; and synthetic seismic data sets for a subsalt structure and
    an overthrust structure available for industry use in calibrating
    processing systems.
        Question. How many additional projects would be funded by this
    increase?
        Answer. The Industry Review Panels will review ongoing projects to
    determine their progress against stated goals. Early in fiscal year
    1998, a call for new proposals would be issued as older projects are
    completed. With the $2 million increase an additional 5 or 6 new or
    continued projects could be funded.
                               upgrading research
        Question. $900,000 is requested for Upgrading Research, with a
    focus on using biotechnology to remove sulfur and heavy metals from
    crude oil. Is this program coordinated with the biocatalytic
    desulfurization research being performed under the auspices of the
    Office of Industrial Technologies' Petroleum program? If not, why not?
        Answer. Yes. This program is coordinated with the biocatalytic
    desulfurization research being performed under the auspices of the OIT
    Petroleum program. The Fossil Energy program is sponsoring biochemical
    research to prevent the formation of pollution by removing sulfur,
    nitrogen, and heavy metals from heavy crude oil before it is refined.
    The proposed OIT research program will be directed at upgrading
    gasoline by biocatalytically removing sulfur, thereby, satisfying the
    need for cleaner fuels. The OIT program issued a Request For Proposal
    (RFP) which closes the end of March 1997. As evidence to the
    cooperation between the two offices, Fossil Energy scientists have been
    asked to help review the anticipated proposals received in response to
    the RFP and OIT representatives will be attending Fossil Energy's 1997
    Oil Processing program review. The programs are supportive of each
    other and cover the broad spectrum of interest to the industry, i.e.,
    economically upgrading heavy crude and producing an ultra low sulfur
    gasoline.
                               program direction
      consolidation of pittsburgh and morgantown energy technology centers
        Question. The fiscal year 1997 Interior and Related Agencies
    Appropriations Act approved the consolidation of the Pittsburgh and
    Morgantown Energy Technology Centers into a single management
    structure. What is the status of the consolidation?
        Answer. While there are a multitude of administrative details
    (e.g., new position descriptions, performance elements and standards)
    to be completed, the consolidation is essentially complete. The final
    organization structure was defined December 2, 1996. The employee
    crosswalk was completed on January 13, 1997, with employees beginning
    to work in the proposed new organizations on February 10, 1997. The
    Organization Change Proposal was approved February 26, 1997, to be
    effective March 2, 1997. All employees have been realigned into the new
    Federal Energy Technology Center organizations; office moves
    consolidating staff are well under way; reviews, revisions, and
    creation of administrative procedures are in process; and senior staff
    has begun development of a FETC strategic plan.
        Question. What plans does the Department have to consolidate
    support services and contracts at the two sites? What savings might be
    realized from such consolidation in fiscal year 1998? Do these savings
    justify the entire reduction in Contract Services, or will there be a
    general reduction in services beyond the reductions attributable to the
    consolidation?
        Answer. The primary site support contractor for the Morgantown
    office is EG&G WASC, Inc. The primary site support contractor for the
    Pittsburgh office is a team comprised of Burns and Roe Services Corp.,
    Parsons Power, and SAIC. These organizations submitted, during
    February, an approach to jointly provide support services to the FETC.
    In response, a request to the contractors for a detailed technical and
    cost proposal is being made. The target is to have a joint venture or
    cross-teaming arrangement in place and fully operational for fiscal
    year 1998 operations.
        In addition, other support contract activities presently conducted
    at each site are being studied for combined operations and
    consolidation efficiencies.
        The budget proposed a reduction in contract services and contracts
    of $5.4 million based on preliminary estimates of consolidation savings
    by the field. The current field estimate is that approximately $3
    million in total savings from the consolidation of contract activities
    during fiscal year 1998 can be expected. Once the consolidation process
    is underway additional savings may be identified. Otherwise, reduction
    would be necessary in the types and nature of current services to meet
    the budget target. An analysis of such potential savings has not yet
    been done.
        Question. As part of the fiscal year 1997 appropriations Act, the
    Department was directed to study the integration of the Federal Energy
    Technology Center into the field management reporting structure. What
    is the status of this study? If complete, what did the study conclude?
    How does the Department propose to implement the recommendations of
    this study?
        Answer. A large working group of Departmental field and
    headquarters staff was assembled to initiate the process to conduct
    this study. The decision was made to approach the Appropriations
    Committees about postponing the performing of the required analysis.
    Office of Fossil Energy senior staff consulted with the Committees
    about postponement until the Secretary of Energy assesses overall
    Departmental organizational requirements.
           privatization of national institute of petroleum research
        Question. Last year the Committee also approved the privatization
    of the National Institute of Petroleum Research (NIPER). What is the
    status of the privatization?
        Answer. Privatization of NIPER is on schedule. The M&O contract was
    amended in August 1996 to facilitate privatization. The research
    activities of the M&O contract have been relocated off-site. DOE
    personnel and the programmatic support activities of the M&O contract
    are scheduled to move off-site May 1997. The remaining activity for
    full privatization is the environmental remediation necessary for GSA
    to market the facility. This activity is on schedule to be complete by
    November 1998 at the completion of the M&O contract.
        Question. What is the status of DOE personnel at the Bartlesville
    Project Office?
        Answer. The DOE personnel at the Bartlesville Project Office will
    continue to implement the Oil and Related Environmental Research
    Programs. The Program office is co-locating with the Southwest Power
    Administration in Tulsa, Oklahoma on May 5, 1997. Some personnel will
    relocate to Tulsa and others will commute.
        Question. Is it anticipated that staffing at BPO or its successor
    will remain steady or decline?
        Answer. It is anticipated that staffing at the new office, the
    National Petroleum Technology Office, will remain steady for the near
    future. National Oil Program management activities assigned to the M&O
    contractor will revert to the federal staff in November 1998. This will
    create a need to reevaluate staffing levels.
        Question. How is transition funding for NIPER addressed in the
    budget request?
        Answer. NIPER transition funding is being supported in the research
    and program direction accounts with no specific request being made for
    transition.
                      cooperative research and development
        Question. The Department has requested $1,966,000 each for WRI and
    UNDEERC, plus an additional $1,864,000 for coal research at UNDEERC
    only. Is there any technological reason why the Department has
    requested additional funds specifically for UNDEERC?
        Answer. UNDEERC has excellent R&D capabilities in areas
    particularly important to the Coal Program and the additional funds
    were requested for the Center to carry out Department directed
    projects.
        Question. Given that the Department proposed to terminate the
    Cooperative R&D program two years ago on the basis that funds should
    not be appropriated to specific facilities, how does the Department
    justify the earmark for UNDEERC?
        Answer. Since the Congress has provided funding each year for WRI
    and UNDEERC, it was felt that it would be best to try and direct
    funding for these two centers to the areas of R&D that would be most
    beneficial to DOE. Thus, the language directing the additional funds
    for UNDEERC to be targeted toward projects in the Coal Program selected
    by the Department.
        Question. Does the Department feel that politicizing the
    Cooperative R&D program will increase the quality of the research
    performed in the program?
        Answer. No. Our request was not intended to politicize the
    Cooperative R&D program.
        Question. Is the Department trying to provoke Congress into
    terminating the Cooperative R&D program?
        Answer. The Department does not intend to provoke the Congress into
    terminating the Cooperative R&D program.
                           environmental restoration
        Question. $2.5 million is requested for restoration actions
    associated with the closing of NIPER. What is the total cost remaining
    for such activities?
        Answer. The total remaining cost for restoration actions at NIPER
    is $2.5 million. This amount will allow all restoration requirements to
    be completed that are necessary for the site to be placed with GSA for
    disposal. These activities must, by State and Federal law, be completed
    before DOE is free of responsibility for the site.
        Question. Is it imperative to the privatization of NIPER that the
    funds requested be appropriated?
        Answer. Yes; the funds are essential to bring the site to the point
    where GSA can accept it for disposal.
        Question. What would be the impact of a lower funding level?
        Answer. A major goal of the privatization effort is to realize the
    cost savings of not owning and operating the NIPER site. The facility
    must be environmentally clear before GSA will take it for disposal. The
    requested funds are essential to bring the facility to that point. If
    funds are reduced, the schedule for turning the facility over to GSA
    will slip beyond the November 1998 date schedule for closeout of the
    M&O contract. This will require the M&O to be extended and the overhead
    cost of owning the facility to continue until the requested funds are
    obtained and the necessary work completed.
                        mining research and development
        Question. The budget justification indicates that the Albany
    research center will begin crosscut research to complement Fossil
    Energy R&D objectives. What types of complementary research will be
    performed?
        Answer. The Albany Research Center is developing a program which
    complements the Office of Fossil Energy while retaining current
    customers and identifying potential future customers having needs which
    can be met by the capabilities resident at the Center. The Materials
    Program at Albany will contribute to FE objectives by formulating
    partnerships to determine or develop materials for use in current and
    future power systems. Efforts will focus on research which provides
    data on the performance characteristics of materials being specified,
    on developing cost-effective materials for construction of new and
    enhanced power systems, and for solving potential environmental
    emission problems of such energy producing systems. An emphasis is also
    being placed in Albany's Research Program on resolving near-term
    materials problems associated with the retrofitting of existing coal-
    burning powerplants.
        A CRADA was signed with the Wyman-Gordon Company to produce
    specific alloys using the reactive foil bonding fabrication technique
    developed at ALRC. Phase I of the proposed and planned work has been
    completed and discussions have begun with manufacturing personnel from
    Wyman-Gordon to apply this technology to specific high-wear components
    of fossil energy/power generation systems.
        Question. Is work being performed at Albany coordinated with
    activities funded by the Department of Energy's Office of Industrial
    Technologies?
        Answer. The Office of Industrial Technologies in EE offers a
    variety of opportunities for materials-related research. The Albany
    Center is a member of the OIT Laboratory Coordinating Council and
    actively participates in the Industries of the Future Program. The
    research cupola melting studies conducted at Albany are currently part
    of the OIT Metal casting program. Other opportunities for cooperation
    are being actively pursued.
        Question. If not, might there be opportunities for coordination,
    particularly in the area of metal casting?
        Answer. ALRC's research capabilities are aiding other activities in
    DOE. Currently, discussions with the Office of Transportation
    Technologies' (OTT) program manager on advanced automotive materials
    indicates the potential for utilizing light metal (Ti and Al)
    expertise/capabilities at ALRC. The Center is planning to partner with
    OTT through the Northwest Alliance for Transportation Technologies,
    NATT, by leveraging the low-cost Ti program.
        The Center is a cooperator in an EM test program which includes
    Clemson University, Clemson, SC, and AJT Enterprises, of Charleston,
    SC. Albany has conducted a series of melting tests on contaminated
    soils from the Charleston (South Carolina) Naval Shipyard in
    preparation for the subsequent vitrification of these residues in the
    larger pilot-scale vitrification furnace at the Center. The Center also
    provides support to DOE in evaluations of the treat ability of
    contaminated soils at specific, identified sites in the Formerly
    Utilized Sites Remedial Action Program (FUSRAP). Research includes
    mineralogical characterization of soil matrices to determine the nature
    of contamination; conceptual design of potentially effective volume-
    reduction strategies with accompanying cost analysis; and technical
    review for DOE of studies of contaminated sites by other contractors.
        Question. How much reimbursable work is currently being performed
    at Albany? In cooperation with what agencies?
        Answer. Albany is currently performing reimbursable work in
    cooperation with the following agencies:
      --1. U.S. Environmental Protection Agency (EPA), Metal Contaminant
            Speciation for Superfund Site Cleaning Research, $180,000
      --2. U.S. Environmental Protection Agency (EPA), Environmental
            Technology Initiative (ETI), $774,000
      --3. U.S. Agency for International Development (USAID) Asia
            Sustainable Energy Initiative, $366,000
      --4. Department of Defense (DOD), U.S. Army and Army Corps. of
            Engineers, $76,000
      --5. Department of the Interior (DOI), National Park Service, $2,500
        These activities are in various stages of completion. All funding
    amounts, therefore, represent total project funding since inception of
    the agreement.
                             clean coal technology
    Repayments
        Question. The tables included in the budget justification indicate
    that significant repayments are being realized from Clean Coal
    Technology projects that are currently in operation. What is the total
    of repayments received through the end of fiscal year 1996?
        Answer. The tables in the budget justification on the Clean Coal
    Technology Program indicate that 15 projects are ``in commercial use''
    as noted by the asterisk. ``In commercial use'' means that the
    technology has been retained for commercial operations after completion
    of the Cooperation Agreement or the technology has sold commercially or
    the technology is being used commercially during the operational phase
    of the demonstration to produce revenues. The term ``in commercial
    use'' is not the same as repayment. Qualification for repayment from
    those projects which are in ``commercial use'' must follow the terms
    and conditions of the Cooperative Agreements.
        Currently, $385,953 has been repaid to the government from the
    Clean Coal Technology Program. Repayments from most projects will be
    derived from future commercial sales of the technology after completion
    of the demonstration project. The larger and more expensive power
    projects, which are currently in design, construction and operation,
    aren't expected to achieve commercial sales until after 2000.
        Question. What are your estimates of repayments through the end of
    fiscal year 1997 and fiscal year 1998?
        Answer. Significant sales from CCT projects are not anticipated
    until after fiscal year 1998. Estimates for repayment through fiscal
    year 1997 and fiscal year 1998 are expected to be minimal and will
    probably remain at approximately $400,000. Several environment retrofit
    technologies may achieve commercial sales after fiscal year 1998 for
    Clean Air Act compliance. Sales of the large power project technologies
    are not expected until after 2000.
        Question. Milestone decisions on the YORK and PENELEC projects are
    due to be made at the end of May. These decisions have an impact on the
    funding requirements for the Clean Coal Program. Is the Department
    confident that it will be able to meet these target decision dates?
        Answer. Yes; the Department continues to be hopeful that decisions
    on restructuring these projects will be made by the end of May 1997.
    However, any changes among the proposed team members or the proposed
    project sites could cause some delay beyond May.
        Question. Press accounts indicate that the NOXSO project is
    undergoing some difficulty. Given that no decision milestones remain on
    the project, what are the Department's options if the project is
    terminated?
        Answer. If the current difficulties being encountered by the NOXSO
    project cause the industrial participant to withdraw from the project,
    the Department will proceed in the same manner that it has in the case
    of other projects that have encountered similar difficulties. The
    cooperative agreement will be closed out and the funds remaining will
    be returned to the Clean Coal Technology Program for use in
    accomplishing the program's objectives.
        Question. What costs would the Department be able to recover for
    use elsewhere in the program?
        Answer. At the time the industrial participant withdraws from the
    project and steps are taken to close out the cooperative agreement, the
    Department's funds that have not been committed or needed in the close
    out activities will be returned to the Clean Coal Technology Program.
    Additional funds may be recovered during the close out negotiations.
    The amount will be dependent upon the agreements reached in coming to
    some settlement about facilities constructed or commitments made.
                  program direction for clean coal technology
        Question. The budget justification indicates that $15,866,000 will
    be required for Clean Coal Technology Program Direction. What have been
    the costs of Program Direction in each of the last 5 fiscal years?
        Answer. The following costs have been incurred for Program
    Direction over the past 5 fiscal years for the Clean Coal Program:

    Incurred costs for program direction

    Fiscal year:
        1997 (estimate).....................................     $16,000,000
        1996................................................      14,768,416
        1995................................................      17,914,680
        1994................................................      17,445,440
        1993................................................      19,017,348

    Question. What are the projected requirements for Program
      Direction in the next several fiscal years?
    Answer. The following are the estimated requirements for Clean
      Coal Technology Program Direction for the next several fiscal
      years:

    Fiscal year:
        1998................................................     $15,850,000
        1999................................................      14,833,000
        2000................................................      13,112,000

        Question. Is the Department confident that the resources devoted to
    Program Direction are appropriate and comparable to other Fossil
    programs?
        Answer. We believe the estimated Program Direction costs are
    appropriate to support the Clean Coal Technology (CCT) program
    activities which include 40 projects in various stages. The Program
    Direction in budget for CCT is expected to decline in the out years as
    more projects are completed. We will continue to review these
    requirements and update the budget estimates to reflect changing
    program requirements. In comparison to other Fossil programs the CCT
    program direction costs as compared to total program obligations
    represent about four percent in fiscal year 1997 and were among the
    lowest of Fossil Energy programs.
            integrated gasification combined cycle project in china
        Question. The budget includes a $50 million request for a
    technology introduction program in the People's Republic of China. For
    what specific purpose will these funds be used?
        Answer. The funds will be used to reduce the cost differential
    between a U.S. IGCC plant and a less clean, less efficient conventional
    plant. The funds will be used either as a direct buy down of costs or
    to leverage more favorable financing, to compete with foreign
    technology and financing terms.
        Question. Will all funds be used simply to buy down the cost of
    Integrated Gasification Combined Cycle (IGCC) projects to be located in
    China?
        Answer. Yes, funds will be used to offset the increased costs of
    doing the first project for IGCC in China.
        Question. How many individual projects does the Department
    anticipate the $50 million would support?
        Answer. It would support less than 50 percent of the differential
    cost of one project.
        Question. Over what period of time?
        Answer. The funds would be expended over 3 years (1999-2002).
        Question. Will any of the funds be used for research and
    development?
        Answer. A small portion of the fund will be used for coal testing
    and adapting U.S. IGCC technology for the China market.
        Question. While the Committee recognizes that China is a huge
    potential market, why is the proposed program being limited to China?
        Answer. It is being limited to China to best leverage success. The
    requested funding is sufficient to buy down the cost differential for
    only one project. China represents the single largest global market for
    power generation equipment, reportedly planning to add 10-20 GW of
    capacity annually. The U.S. leads the world in coal based IGCC
    technology. Success in penetrating the Chinese market should assure
    continuing sales of U.S. IGCC systems or components.
        Question. Does it not make sense to make some of the funds
    available for use in India or in other key markets so that U.S.
    technologies are more widely distributed?
        Answer. It may, but it would require additional funds. The present
    request is sufficient to buy down the cost deferential for only one
    project.
        Question. Why is the China program focused only on Integrated
    Gasification Combined Cycle (IGCC) technology?
        Answer. This technology has been identified by China as a priority
    for demonstration. Another technology of importance is a large fluid
    bed combustor of 300 MW, but this would require additional funds. In
    the long term, the technology with the largest projected market share
    is IGCC.
        Question. Why shouldn't the program be open to other advanced power
    generation technologies that might be of interest to China?
        Answer. It could be, but this was judged to offer the greatest
    probability of success.
        Question. With at least three CCT-supported IGCC projects slated to
    be operational in fiscal year 1998 and other IGCC plants coming on-line
    in other countries, why is additional $50 million required to make such
    plants palatable to China?
        Answer. There are two reasons: (1) to offset the cost of doing the
    first IGCC in China (estimated difference, based on U.S. experience,
    between first and next plants is $200/kW) and, (2) to allow U.S.
    technology financing package to be competitive with foreign technology.
        Question. At the conclusion of the China program does the
    Department anticipate that the costs of IGCC technology will be reduced
    to the point where the technology will be competitive in developing
    countries such as China?
        Answer. The projections of U.S. industry are that the technology
    would be very competitive at $700/kW and 45 percent efficiency. This
    project would be a major stepping stone in achieving that goal.
        Question. The focus on IGCC in the China program suggests that IGCC
    technology is becoming a ``favorite'' among the advanced power
    generation technologies that are being developed with DOE support. Does
    the China market have specific characteristics that make IGCC the
    obvious technology choice?
        Answer. Yes. China is a coal based economy and the efficiency of
    IGCC is extremely important to resources used and rail transport. Also,
    China needs the products of a multi-generation facility that results
    from IGCC-power, steam, fuel gas, town gas, synthesis gas, hydrogen,
    and ammonia.
        Question. What does the focus on IGCC technology mean for other
    technologies (LEBS, etc.) that might be available in the same market
    window?
        Answer. The introduction of IGCC technology into the Chinese
    marketplace could give it a significant advantage, but it may also help
    in the acceptance of all advanced, clean and efficient technologies
    (such as LEBS and others).
        Question. Should the Department be concentrating more of its
    resources on the IGCC program and less on the other advanced power
    generation programs?
        Answer. The DOE should always maintain a balanced source of
    technology options. There is no universal technology option for all
    situations. Therefore, a suite of technology options should be
    developed.
                        clean coal technology rescission
        Question. The budget proposes a rescission of $153 million and a
    deferral of an additional $133 million in the Clean Coal program. I
    also understand that the emergency supplemental funding request will
    include an additional $10 million rescission from Clean Coal. However,
    information supplied by the Department indicates that completion of
    projects currently underway would leave the program with a $23.8
    million deficit if the proposed rescission were enacted. What
    additional steps does the Department propose to take to ensure that
    ongoing projects can be completed within the budget proposal?
        Answer. The projected $23.8 million deficit assumed that all
    projects would proceed to completion and require all funds as committed
    under the current Cooperative Agreements. At the time of the proposed
    rescission, PENELEC has proposed to the Department to restructure and
    downsize the Warren Station External Fired Combined Cycle (EFCC)
    Project. This would result in a reduction of the Federal commitment for
    that project of nearly $40 million. The proposed rescission amount took
    these savings into account, leaving the Department with the ability to
    complete all remaining projects, barring any major contingencies. The
    Department is working closely with the industrial participants to
    reduce the probability of future cost growths.
        Question. Is the $10 million rescission reportedly included in the
    supplemental request based upon new information that was not available
    during formulation of the fiscal year 1998 budget request?
        Answer. The proposed supplemental $10 million rescission was based
    on a re-evaluation of Program needs after consideration of the
    restructuring of the Warren Station Project and the resulting small
    amount of uncommitted funds made available. The supplemental rescission
    limits the ability of the Department to fund future cost overruns,
    however, the Department is working closely with the industrial
    participants to reduce the probability of future cost overruns.
        Question. The fiscal year 1997 budget requested a rescission of
    $325 million from the Clean Coal program, but Congress approved a more
    conservative rescission of only $123 million. The sum of the rescission
    approved in fiscal year 1997 and the rescission proposed in the fiscal
    year 1998 budget request is only $276 million--substantially less than
    the $325 million proposed in the fiscal year 1997 budget. What has
    changed in the last year that caused the Administration to lower its
    estimate of the total that can safely be rescinded from the program
    while allowing for the completion of ongoing projects?
        Answer. Since the beginning of fiscal year 1997, the Department has
    made one project award and approved the restructuring of several other
    projects that were already under Cooperative Agreements. These actions
    have committed significant funds that otherwise would have been
    available for rescission.
        Question. In light of the $50 million increase in estimated funding
    requirements since last year's request, why should the Committee have
    confidence in the fiscal year 1998 estimate?
        Answer. The proposed rescission in the fiscal year 1998 budget
    request represents surplus funds that actually became available in
    fiscal year 1996 and early fiscal year 1997 from approved project
    restructuring and projects that officially ended prior to completion.
    These funds are in surplus of the requirements needed to fully fund
    (excluding large cost increases) the active Cooperative Agreements
    currently in the Clean Coal Technology inventory. The fiscal year 1997
    request was based only on the ``probability'' that projects would be
    restructured or evaluated prior to completion. The proposed deferral of
    funds in the fiscal year 1998 budget request reflects known and
    acknowledged schedule delays in several projects.
                          strategic petroleum reserve
        Question. The Administration has submitted a proposal to rescind
    $11 million from the Strategic Petroleum Reserve account. How has the
    Administration determined that a rescission of this magnitude is
    justified? Is there new information that was not available during the
    fiscal year 1997 appropriations process that might justify the
    rescission?
        Answer. The Strategic Petroleum Reserve is in a transition due to
    two factors. First it is well into its Life Extension Program, which is
    designed to standardize, streamline and simplify the surface facilities
    of the Reserve in addition to extending the useful life expectancy to
    the year 2025. As that program proceeds, it is resulting in cost
    reductions that could only be estimated until the work was actually
    complete, but which we are starting to realize now.
        Second, the Department signed its first agreements to commercialize
    certain facilities that are critical to drawing down the Reserve but
    which otherwise sit idle. One of these facilities, the St. James
    terminal, part of the Capline complex on the Mississippi River, was
    leased to Shell Oil and custody actually transferred. While the signing
    of this contract was foreseen during fiscal year 1997, the timing of
    the actual transfer was highly problematic and the Department planned
    to occupy the facility and perform maintenance and provide security for
    the whole fiscal year. The cost of those functions now transfers to
    Shell under the terms of the lease, and accounts for the bulk of the
    $11 rescission.
        These savings had been anticipated for the whole of fiscal year
    1998, but were not originally projected to reduce the budget for fiscal
    year 1997, and absent the rescission, the funds would not be spent in
    fiscal year 1997.
        Question. What impact would this rescission have on Reserve
    operations, drawdown readiness, Weeks Island decommissioning, life-
    extension, etc.?
        Answer. The rescission will have no programmatic impact, the funds
    are available because of savings from activities already completed. All
    of the program areas are progressing at the fastest responsible rate.
    If the money were not rescinded it would not be obligated by the
    Department during fiscal year 1997.
        Question. Does the proposed rescission include the $1.36 million
    remaining from the reserve expansion study, or have these funds already
    been reallocated?
        Answer. The rescission does not include the $1.36 million remaining
    of the appropriation for a Strategic Petroleum Reserve Plan Amendment,
    nor have the funds been reallocated, which would require legislation.
    The Administration has proposed amendments to the Energy Policy and
    Conservation Act, but the Congress has not acted to amend the Section
    159(j) of the Act which requires the Secretary to amend the Strategic
    Petroleum Reserve Plan to prescribe plans for completion of storage of
    one billion barrels of petroleum products in the Reserve. The
    Department plans to request the transfer of the remaining funds
    appropriated for the purpose of preparing the Plan Amendment after the
    Congress acts to remove the legislated requirement for an immediate
    plan amendment.
                      decommissioning of weeks island site
        Question. Decommissioning of the Weeks Island site will be largely
    completed during fiscal year 1998. Does the Department have a high
    degree of confidence that the decommissioning will be completed within
    current cost estimates? Is there any significant chance that DOE will
    carry substantial liabilities beyond fiscal year 1998?
        Answer. We are very confident that the Weeks Island site can be
    emptied, refilled with brine, and decommissioned without any
    extraordinary unplanned cleanup costs, all within the cost estimate.
    However, liability is a legal concept, and the Department cannot
    guarantee that it will not have to defend against claims for actions
    taken in the past or during the decommissioning. The Department shares
    ownership of the salt dome with Morton Salt, and Morton has at times
    asserted that the Government's actions have had negative impacts on
    Morton's interests.
        Question. There are currently 117 million barrels of unused
    capacity in the Reserve. Does the Department have a cohesive policy as
    to the use of this excess capacity? Is it the Department's position
    that the entire excess capacity should be leased to foreign
    governments? If such lease agreements are not forthcoming, does the
    Department plan to simply maintain the capacity in anticipation of
    future acquisitions, or is there a long-term policy for reducing the
    total size of the Reserve?
        Answer. The Department has proposed to lease excess capacity in the
    Strategic Petroleum Reserve to other foreign governments. While the
    Department would like to lease as much of this excess capacity as
    possible, the precise amount of capacity leased will depend on the
    number and nature of the contracts negotiated. The level of capacity
    will also vary depending on specific terms negotiated, such as whether
    commingled or segregated storage is desired.
        If such lease agreements are not forthcoming, the Department plans
    to maintain the capacity in anticipation of future acquisitions. The
    existence of the extra storage capacity will allow the United States to
    quickly start acquiring oil if circumstances dictate that the inventory
    of the Reserve should be increased. If we sell or decommission any of
    the existing sites, creating a new site would be prohibitively
    expensive and would take many years.
        Question. Information supplied to me by the Department indicates
    that by 2010, the number of days for which the SPR inventory could
    displace imports will decline to 44 days in absence of any further oil
    sales. I also understand that current international commitments
    obligate the U.S. to maintain a 90 day reserve capacity, including both
    public and private reserves. Given that U.S. private reserves seem to
    be declining, is there any point in the foreseeable future in which the
    U.S. will not be able to meet the 90 day reserve requirement?
        Answer. If imports continue to expand and private inventories
    continue to decline by a half percent per year, protection will decline
    to 90 days of import protection by the year 2010. A host of events,
    including low oil prices that encourage consumption and discourage
    domestic production, could cause the 90 day threshold to be reached
    before that time. We must also consider that Reserve might be drawn
    down in an emergency, further reducing the inventory and the days of
    protection.
        As a matter of foreign policy we would like to continue to lead the
    International Energy Agency and encourage all member countries and
    applicants to increase their petroleum stocks.
        Question. Does the Department anticipate generating any revenues
    from similar activities in fiscal year 1998?
        Answer. The Department will continue to generate revenues for the
    Federal Government during fiscal year 1998 from the facilities leased
    during 1996 and 1997. Estimated annual lease revenues from the St.
    James Terminal and Bayou Choctaw pipeline will be $1 million based on a
    percentage of the gross revenues generated from its commercial
    operations. In addition, the Department expects lease revenues of
    approximately $500,000 to be received from its lease of the Big Hill
    pipeline.
                     naval petroleum and oil shale reserves
    Naval petroleum reserves-1
        Question. I am aware that the Chevron Corporation has filed a
    lawsuit regarding the equity determination for a portion of NPR-1. How
    might this lawsuit affect the schedule for the sale of NPR-1?
        Answer. On March 17, 1997, the U.S. District Court for the Eastern
    District of California entered an order which denied Chevron's motions
    and granted the United States' motion for summary judgment.
    Accordingly, the suit is now dismissed and will not affect the sale
    schedule.
        Question. In the last calendar year, the Appropriations Committees
    have approved two reprogrammings making available over $23 million for
    sale-related activities. This amount far exceeds original estimates of
    sale costs. Is the Department confident that it will be able to execute
    the sale within the amounts already made available for this purpose?
        Answer. The Department has just completed hiring the last set of
    contractors as required by section 3412(d)(1) of the National Defense
    Authorization Act for Fiscal Year 1996. These contractors are five
    independent experts in the valuation of oil and gas fields who will
    conduct separate assessments of the value of the interest of the United
    States in NPR-1. Based on the preliminary cost estimates for these
    contractors, the Department believes that the present level of funding
    authorized to execute the sale should be adequate.
        Question. If the requirements of the Defense Authorization Act are
    not met, or if the sale does not proceed for some other reason, the
    Department will have to operate the field for all of fiscal year 1998.
    Would the Department be able to operate the field for the entire year
    within the amount requested in the President's budget?
        Answer. The amount contained in the President's budget provides for
    operation of NPR-1 for seven and one-half months of the fiscal year,
    through mid-May 1998, and for operation of NPR-3 and the NOSRs for the
    entire fiscal year.
        Question. If not, what is the minimum additional amount necessary
    to operate the field for the remainder of the fiscal year, assuming no
    significant development activities were initiated?
        Answer. The minimum additional amount necessary to operate NPR-1
    through the remainder of fiscal year 1998 is estimated at $34 million.
    This does not include any significant development activities.
        Question. Should the sale not occur, how would Federal revenues be
    affected if no additional funds were made available for the operation
    of NPR-1 for the remainder of fiscal year 1998?
        Answer. If NPR-1 received no additional funds for the remainder of
    fiscal year 1998, it is estimated that operations would close down in
    mid-May of fiscal year 1998. Production and sale of petroleum and
    related products would cease at this time, resulting in a short-term
    revenue loss to the Federal Government estimated at $35 million per
    month for the remainder of the fiscal year. Further, cessation of
    operations at NPR-1 would probably result in reservoir damage, and
    additional production and revenue losses in the future.
        Question. Many different estimates have been made regarding the
    sale value of NPR-1 and the value of the revenue stream from NPR-1
    should the Federal government retain ownership. Many of these estimates
    factor in scoring rules, scoring windows and other budget-related
    arcana. Setting these factors aside, are there any market or
    programmatic reasons why the sale price of NPR-1 would be significantly
    lower than the net present value of the projected revenue stream,
    provided that the sale attracts a number of competitive bids?
        Answer. In compliance with the National Defense Authorization Act
    for Fiscal Year 1996, five independent experts in the valuation of oil
    and gas fields will conduct separate and independent assessments of the
    value of the interest of the United States in Elk Hills. In preparing
    their assessments, these independent experts will consider the net
    present value of the anticipated revenue stream that the Treasury would
    receive if the reserve were not sold, adjusted for any anticipated
    increases in tax revenues that would result if Elk Hills were sold.
    This net present value calculation will be prepared by the Department
    in conjunction with the Office of Management and Budget. The minimum
    acceptable sale price may be set no lower than the average of the five
    independent assessments or the average of three of these assessments
    after excluding the high and low assessments, whichever is higher. This
    process effectively ensures that, in setting the minimum acceptable
    sale price for Elk Hills, the Department will be able to consider six
    separate assessments, including the government's net present value
    calculation, of the future revenues that would have accrued to the
    government from continued operations.
        Question. The budget justification indicates that only development
    activities with a short pay-back time will be undertaken in fiscal year
    1998. If funded at a level higher than the request, are there
    activities that could be performed at NPR-1 prior to the sale date that
    would result in a net ``profit'' to the U.S. Treasury?
        Answer. There are no additional activities (such as drilling or
    facilities work) that could be started, completed and provide a net
    ``profit'' to the U.S. Treasury by the February 1998 sale date.
        Question. If so, what are those activities, how much would they
    cost, and how much revenue would they likely produce?
        Answer. The only activity that provides a net ``profit'' in such a
    short time is remedial well work, which is already funded in the fiscal
    year 1998 budget.
       management and administration of naval petroleum reserves 1 and 2
        Question. $20 million is requested for Management and
    Administration at NPR-1 and NPR-2, only $500,000 less than the amount
    appropriated for fiscal year 1997. The request also indicates that $2.2
    million in prior year funds will be available for this activity in
    fiscal year 1998, an increase from fiscal year 1997. Why is the request
    for this activity not reduced to reflect the sale of NPR-1?
        Answer. The request for this activity was reduced to reflect the
    sale and estimated operating time for fiscal year 1998. However, these
    reductions were offset by one-time cost increases for M&O contractor
    severance and contract close-out activity.
        Question. How much does the Department expect to pay for severance
    and other such costs?
        Answer. The fiscal year 1998 budget requests $15.8 million for
    contractor severance costs. Of this amount, $4.6 million is budgeted in
    the Management and Administration activity. The remainder is budgeted
    in Production Operations and Technical Services. Contract close-out
    costs for fiscal year 1998 are budgeted at $4.5 million in the
    Management and Administration activity.
                              development drilling
        Question. $26 million and $17 million were appropriated for
    Development Drilling in fiscal year 1996 and fiscal year 1997,
    respectively. Have these drilling activities been ``profitable'' for
    the Treasury, as expected?
        Answer. The development drilling programs for fiscal year 1996 and
    fiscal year 1997 have been extremely profitable. In fiscal year 1996,
    23 wells were drilled and placed on production. The response of those
    wells has been an increase in production of 5,000 barrels of oil per
    day (BOPD) and 25 million cubic feet of gas per day. On an oil
    equivalency basis, this represents 9,166 barrels of oil equivalent per
    day (BOEPD). Without assigning a value to the gas produced that is not
    sold (most of the gas is used on site for maintaining the pressure in
    the reservoirs), the payout for these 28 wells is 11 months--a very
    successful program.
        For fiscal year 1997, five wells of the 17 planned have been
    drilled and completed as of March 21, 1997, and placed on production.
    Although production testing is currently in progress on these wells,
    the current oil production rate is about 970 BOPD (an average
    production rate of 193 BOPD/well). The wells are expected to payout
    within seven months and will be very profitable. The remaining wells in
    fiscal year 1997 development drilling program are also expected to
    payout within a comparable period. The total response of the 17 wells
    planned for fiscal year 1997 is expected to be over 5,000 BOPD and add
    over 11 million barrels of proved reserves. There have been no
    indications that this development drilling program will be anything but
    very profitable for the Treasury.
                             development facilities
        Question. $15.6 million is requested for Development Facilities, a
    large portion of which will be used for the Rule 4701 NOx
    reduction project. Are these funds sufficient to complete the Rule 4701
    project?
        Answer. It is not likely that the $11.4 million budgeted in fiscal
    year 1998 will be needed by NPRC for compliance with Rule 4701.
        In fiscal year 1995, the local air district commenced a formal rule
    making for proposed Rule 4701 to reduce emission levels for
    NOx and CO and to establish a limit for volatile organic
    compounds (VOC). Early versions of the Rule required that all internal
    combustion engines in operation at NPR-1 greater than 50 horsepower
    meet very stringent NOx/CO/VOC emission limits by May 1999.
    Based on preliminary engineering analyses it was determined that given
    the current configuration of the engines (numerous very large engines
    driving ``one of a kind'' compressor units) significant and very
    expensive modifications would be required to meet the proposed emission
    limits. The fiscal year 1998 portion of the work was estimated to be
    $11.4 million, and this figure was included in the NPRC fiscal year
    1998 Facility Development budget.
        Concurrent with engineering analysis, NPRC continued to participate
    actively in the rule making process with the intent of reducing the
    requirements that ultimately would be included in the final Rule. The
    rule making process continued over an approximate 2-year period before
    the Rule was finalized and formally put in place in December 1996. Not
    knowing what the final outcome of the rulemaking would be, NPRC
    continued to budget $11.4 million in fiscal year 1998 throughout the
    rule making process to cover what was believed to be the most likely
    rule making outcome: i.e., that NPRC's efforts to reduce requirements
    significantly were not likely to be successful. Upon release of the
    final Rule in December 1996, however, and based on Rule clarifications
    received from the air district on March 17, 1997, Rule requirements
    have been reduced significantly, and the compliance date for NPRC
    deferred until May 2001. On the basis of these recent developments, and
    reduced requirements, NPRC is now of the opinion that the $11.4 million
    budgeted for fiscal year 1998 will most likely not be required to
    comply with Rule 4701. It must be understood, however, that the full
    impact of the Rule is still being analyzed. The next step in the
    compliance process is for NPRC to collaborate with the air district and
    develop a compliance plan that is to be submitted to the district for
    review by December 1997. The district then has 6 months until July 1998
    to approve or disapprove NPRC's plan. It is anticipated, based on
    experience, that during the process of compliance plan development,
    NPRC will be introduced to at least some requirements that to this
    point have not been obvious which would require funding. It is
    considered, however, that any such requirements can be funded with
    funds budgeted for Rule 4701 in the fiscal year 1997 budget.
        Question. Is it necessary to complete this project at NPR-1 prior
    to sale?
        Answer. No. As stated above, the project does not need to be
    completed until May 2001. Assuming the sale is completed in February
    1998, the work on 4701 that NPRC needs to accomplish between now and
    sale completion is to collaborate with the air district and develop a
    compliance plan that reflects a thorough understanding of regulatory
    and engineering requirements. Understanding regulatory requirements
    will require intensive collaboration with the air district.
    Understanding engineering requirements will require data analysis,
    field/pilot tests, engineering studies and evaluations, cost analyses,
    and conception engineering designs. The goal is to have a cost
    effective compliance plan in place for the new owners. The actual
    funding of the implementation plan will fall to the new owners. The new
    owners should have no problem completing the compliance project if the
    sale is completed by or near February 1998, as scheduled.
        Question. What would happen if the project was deferred?
        Answer. With the change in compliance date from May 1999 to May
    2001, together with the reduction in requirements, in effect the
    project has already been deferred. It does not appear that deferring of
    the project will have an adverse effect on NPRC.
        Question. What sanctions would be incurred if the project is not
    completed by the deadline?
        Answer. If an operator willfully does not meet the May 2001
    compliance date, they could be fined up to $25,000 per day per
    violation and jailed for up to one year by the State of California.
    Similar sanctions are in place at the Federal level. Additionally, the
    district could revoke all equipment operating permits, and for each
    piece of equipment (approximately 500 in number) the facility could
    incur similar penalties.
        In addition to the final compliance date of May 2001, there also
    are intermediate milestone date requirements (such as the requirement
    to complete a compliance plan by December 1997), and the same sanctions
    that apply to the final date also apply to intermediate dates.
        Question. Will the requirements of Rule 4701 apply to the purchaser
    of NPR-1 as they apply to DOE?
        Answer. Yes, the requirements of Rule 4701 will apply to the
    purchaser of NPR-1.
         increase for technical services at naval petroleum reserves-3
        Question. A $2 million increase is requested for Technical Services
    at NPR-3. Is the entire increase attributable to activities at the
    Rocky Mountain Oilfield Testing Center?
        Answer. Yes, the entire increase is attributable to the Rocky
    Mountain Oilfield Testing Center, and is based on increased industry
    interest in the test center and a large increase in proposed projects.
        Question. Would a lesser increase simply result in fewer tests or
    cooperative agreements at the facility?
        Answer. If funding for this activity were reduced, it would result
    in the completion of fewer projects.
        Question. If provided, would the budget increase leverage an
    increase in non-Federal cost-sharing at the facility?
        Answer. Yes, since all projects performed at the test center are
    cost shared, the increase requested will increase private industry
    cost-sharing.
        Question. It appears that savings achieved at NPR-3 through
    operational and management efficiencies are being funneled into the
    Rocky Mountain Oilfield Testing Center, resulting in a flat
    appropriation request for NPR-3. Are there Development Facilities or
    Development Drilling activities that could be performed with these
    funds that would generate a net return to the Treasury over a
    relatively short time period?
        Answer. Analyses of proposed facility and drilling projects
    indicate that none of the projects would generate a net positive return
    to the Treasury in a relatively short time period.
        Question. If so, why were funds not requested for such activities?
        Answer. Funds were not requested for these activities because
    technical analyses have not identified any projects that would provide
    a reasonable degree of profitability.
        Question. Why is RMOTC a higher priority?
        Answer. RMOTC appears to be a higher priority only because of the
    lack of opportunities for investments in NPR-3 drilling and facilities
    projects. In addition, RMOTC is generating increasing industry interest
    and support, and provides positive benefits through cost-shared
    projects.
                program direction for naval petroleum reserves-1
        Question. Within the amount requested for Program Direction, the
    justification indicates that funds will be used for severance and
    employee transition. Does the Department anticipate that funds will be
    needed in fiscal year 1999 for residual severance costs or similar
    requirements related to NPR-1 personnel?
        Answer. The Department plans to complete all NPR-1 severance and
    employee transition actions in fiscal year 1998, and no funds are
    anticipated to be required for these activities in fiscal year 1999. It
    is expected that funds will be required in fiscal year 1999 to support
    10 NPR-1 employees to work on close-out of the M&O contract and the
    Unit Plan Contract.
        Question. If so, how much will be required and in what account will
    such funds be requested?
        Answer. Funding for NPR-1 employees in fiscal year 1999 will be
    requested in the Program Direction account for NPR-1, however estimates
    of the amount required have not yet been developed.
                              unobligated balances
        Question. The Budget Appendix indicates that a high level of
    unobligated balances will exist in the NPOSR account at the end of
    fiscal year 1998, despite the sale of NPR-1. Is the table in the Budget
    Appendix correct?
        Answer. The table in the Budget Appendix reflects the correct
    number for fiscal year 1996 of $437 million, but is not correct for
    fiscal year 1997 and fiscal year 1998. The correct numbers for fiscal
    year 1997 and fiscal year 1998 are $425 million for each year.
        Question. What is the reason for the large unobligated balance that
    carries forward each year?
        Answer. The large unobligated balance carried forward each year
    reflects program revenues deposited in the NPOSR appropriation account
    as a result of the appropriation law for fiscal year 1992 and fiscal
    year 1993. This law was subsequently changed with passage of the fiscal
    year 1994 appropriation, and all revenues since fiscal year 1994 have
    been deposited in the Miscellaneous Receipts account at the U.S.
    Treasury. The revenues contained in the balances brought forward total
    $424.5 million and are not available to the program for use. It would
    be appropriate for these revenues to be returned to the U.S. Treasury.
        Question. Does the Department anticipate that at the end of fiscal
    year 1998 there will be any prior year balances available to the NPOSR
    program for use in fiscal year 1999?
        Answer. The Department does not expect there will be any prior year
    balances available to the NPOSR program for use in fiscal year 1999.
                                     ______

                      Questions Submitted by Senator Byrd
                  energy supply and the role of fossil energy
        Question. What percentage of the United States energy supply is
    fossil-based?
        Answer. Fossil-based energy comprised 85 percent of total U.S.
    energy supply in 1995.
        Question. Is the picture much different when the global energy
    supply is considered?
        Answer. Fossil-based energy comprised 86 percent of world energy
    supply in 1995.
        Question. Based on the Energy Information Administration's
    projections, is the energy supply mix expected to change?
        Answer. U.S. fossil-based energy is projected to increase from 85
    percent in 1995, to 88 percent of total supply by 2015. World fossil-
    based energy consumption is projected to increase 86 percent to 87
    percent between 1993 and 2015.
        Question. When we look specifically at the electricity aspect of
    the energy picture, how much of electricity is derived from fossil
    fuels?
        Answer. Fossil-based electricity generation comprised 68 percent of
    U.S. electricity generation in 1995. Fossil-fuel use accounted for 63
    percent of the world's electricity generation in 1995.
        Question. How much of this is coal?
        Answer. Coal-fired electricity generation comprised 51 percent of
    U.S. generation and 36 percent of global generation in 1995.
        Question. Is the outlook for sources of electricity anticipated to
    change?
        Answer. Total fossil-based electricity is projected to increase to
    80 percent of U.S. generation by 2015. Share of U.S. coal-based
    generation is projected to remain basically flat contributing 50
    percent (including cogenerators) to electricity generation in 2015.
    Globally, the share of fossil use for electricity generation is
    projected to increase slightly to 66 percent in 2015.
        Question. Does any other source of fuel come close to coal in
    meeting our electricity demands?
        Answer. No. The next highest energy source for U.S. electricity
    generation is nuclear which is projected to decline from 20 percent in
    1995 to 10 percent in 2015. Globally, the next highest share is for use
    of renewable energy (including hydroelectric) rising slightly from 22
    percent in 1995 to 23 percent in 2015.
        Question. In light of these types of projections, why is the fossil
    budget proposed to decrease $18.3 million, or 5 percent, in the fiscal
    year 1998 budget?
        Answer. Fossil energy R&D remains a high priority at the Department
    of Energy and an integral part of a portfolio of energy R&D programs to
    ensure a secure energy future under current fiscal constraints. The
    budget, along with available Clean Coal Technology funds, allows
    pursuit of a full range of fossil energy options for the future.
        Question. What impact will the proposed fiscal year 1998 funding
    level for the fossil energy program have on the timely development of
    technologies that will allow for the continued use of fossil fuels in a
    more effective and environmentally-sensitive manner?
        Answer. The Fossil Energy Program continues to be a high priority
    in our overall energy R&D portfolio. We believe that the proposed
    fiscal year 1998 funding is a reasonable level given the current fiscal
    constraints and the need to structure a balanced energy R&D portfolio
    to meet the future energy and environmental challenges. Given the
    current uncertainties resulting from electricity generation industry
    restructuring, it appears that the time window of opportunity is
    widened, thus allowing us to develop these technologies within a time
    frame that can ensure the continued use of fossil fuels more
    effectively and in a more environmentally-sensitive manner.
        Question. If Congress were to fund the energy efficiency budget
    fully, what effect would that have on reducing our use of energy?
        Answer. Estimated primary energy displaced due to DOE energy
    efficiency programs at the requested funding level is projected to be
    0.5 to 0.8 quads in the year 2000 and 4 to 7 quads in 2010. This
    translates into consumer and business energy cost savings of $3.5 to
    $4.3 billion per year in 2000 and $25 to $44 billion per year in 2010.
        Question. Mr. Secretary, there are a number of promising
    technologies under development in the fossil energy program that appear
    to be under funded in fiscal year 1998. The budget seems to walk away
    from commitments and schedules developed for cooperative programs in
    the area of advanced power systems, such as turbines, fuel cells, and
    low emission boiler systems. Yet these technologies, if proven and
    cost- competitive, can contribute to more efficient use of energy in a
    more environmentally sound manner. What effect will the proposed fiscal
    year 1998 budget have on our ability to complete these programs in the
    2000 timeframe?
        Answer. The proposed fiscal year 1998 budget may cause some
    slippages in the original 2000 time frame completion schedule for
    turbines and fuel cells by 2 years and possibly the same for the low
    emission boiler systems. However, we believe that the budget, as
    submitted, represents a reasonable balance among the various
    technologies in our energy portfolio given the current budget
    constraints.
        Question. What are the current forecasts with respect to energy
    demand--is it expected to remain relatively constant, or is it expected
    to grow?
        Answer. Between 1995 and 2015, U.S. energy demand is expected to
    grow one percent per year.
        Question. What are the Department's projections about how we will
    meet the challenge of addressing increased demands for energy?
        Answer. Increasing demand for electricity generation is projected
    to be satisfied primarily through increasing use of natural gas
    followed by increased use of coal and a modest increase in renewable
    energy through 2015. Nuclear electricity generation is projected to
    decline.
        Question. What consequence would program ``stretch-outs'' have on
    our ability to have economically viable alternative power generation
    systems available to respond to projected growths in energy demand?
        Answer. The uncertainty, due to the prospects for deregulation of
    the electricity market, has delayed the incentive for the market to
    deploy new technologies in its generation mix. Therefore, limited
    ``stretch-outs'' of deployment of alternative power generation are not
    expected to severely affect the market's ability to respond to
    projected growth in energy demand.
        Question. How realistic is it to assume dramatic shifts in the
    foreseeable future when it comes to our energy picture--both in terms
    of where our energy comes from and how we use it?
        Answer. Current projections of the energy picture does not
    anticipate any dramatic shifts in the mix of energy supply of energy
    use.
                             global climate change
        Question. To what extent do you believe improved technologies being
    pursued as part of the fossil energy program will contribute to the
    more efficient production of energy and improved environmental
    performance in a way that will help our global environment?
        Answer. We believe that the improved technologies being pursued as
    part of the Fossil Energy Program will have a major global contribution
    to more efficient energy production and improved environmental
    performance. The goals of the advanced technologies are to almost
    double the efficiency of current powerplants and to reduce the carbon
    dioxide emission by over 40 percent. The environmental systems
    technologies being pursued are aimed at reducing pollutant emissions by
    up to 90 percent, at a fraction of today's cost. This attractive
    combination can encourage the deployment of these advanced technologies
    in the use of fossil fuels around the world to create a cleaner global
    environment, especially in developing and transitional countries which
    rely heavily on fossil fuels.
        Question. Given that the pressure is to address the global
    environmental debate sooner rather than later, doesn't that argue for
    staying on track in the development of some of these new fossil energy
    technologies so that they can contribute to our having available as
    broad an array of economically viable options to meet our energy needs
    as possible?
        Answer. Given current budgetary constraints, there is a need to
    balance our overall energy portfolio by considering many viable
    options, including fossil energy technologies, to address the global
    climate issue.
        Question. If so, then why should the Committee concur in the
    proposed reductions to the fossil energy budget?
        Answer. We believe that given the current budget constraints, the
    Fossil Energy Program budget submitted to the Committee represents a
    reasonable balance of the overall energy portfolio options.
        Question. Will spending less somehow make these technologies
    available any sooner?
        Answer. No, spending less will not make these technologies
    available any sooner.
        Question. Isn't it true that some of the programs DOE is working on
    in advanced coal fired power generation systems can reduce emissions of
    carbon dioxide by more than 30 percent compared to current baseline
    systems?
        Answer. Yes. Current conventional coal powerplants range in
    efficiencies from less than 30 percent for older plants to 36 percent
    for newer plants. Our portfolio of coal-fired powerplant technologies
    are aiming at efficiencies in excess of 60 percent, thus having the
    potential for reducing carbon dioxide emissions by close to half.
        Question. And in terms of cleaner fuel sources, such as natural
    gas, don't some of the technologies under development--such as advanced
    turbines and fuel cells--have the potential to reduce emissions 30-50
    percent compared to current systems?
        Answer. Yes. Our Advanced Gas Turbine Program and our Fuel Cells
    Program are aimed at developing powerplants with efficiencies in excess
    of 60 percent and when coupled with coal, can have the potential for
    reducing carbon dioxide emissions within that range compared to current
    systems.
        Question. Wouldn't the successful deployment of these technologies
    help further progress towards reducing emissions?
        Answer. Yes, they would in comparison with currently available
    technologies.
        Question. And if so, doesn't it make more sense to address the
    technological issues before considering binding targets?
        Answer. It would be desirable to address the technological issues
    early. However, given the long-range, high risk nature of the
    technology being developed, the 60-percent efficiency goal for coal
    power systems will not be attained any earlier than 2010.
        Question. To what extent are global environmental concerns driven
    not just by the U.S. but also by pollution and emissions elsewhere?
        Answer. Managing emissions outside the United States is critical to
    solving the problem of greenhouse gas emission increases. For example,
    although North America CO2 emissions (in tons of carbon) are
    projected to increase from 1.56 billion tons per year (TPY) in 1990 to
    2.084 billion TPY in 2015, global totals increase from 6.07 billion TPY
    to 9.35 billion TPY over the same period.
        Question. Is it not possible that the successful development of
    alternative technologies, which could then be exported, could
    contribute to the global solution as well as provide job opportunities
    in the U.S.?
        Answer. Yes, it is possible to realize the potential for these
    advanced technologies, if successfully developed and exported, to
    contribute to the global solution, as well as provide opportunities in
    the United States. In fact, these are among the program drivers in the
    development of these technologies.
                             clean coal technology
        Question. The fiscal year 1998 budget proposes some restructuring
    of the funding profile for the Clean Coal Technology program. While I
    am pleased that the Administration has not proposed the huge raids on
    the clean coal program that have been rejected in the past, I still
    have some concerns about the proposal. Is it accurate that the DOE
    budget proposal for fiscal year 1998 assumes a ``savings'' in current
    year budget authority of $286 million from the clean coal technology
    program?
        Answer. The Clean Coal Technology budget proposal for fiscal year
    1998 includes a rescission of $153 million and a deferral of $133
    million until fiscal year 1999. The proposed $153 million rescission
    represents savings made available from approved project restructuring
    and projects that ended prior to completion. The proposed deferral of
    $133 million would not decrease the total value of the Clean Coal
    Technology Program. The combined rescission and deferral represents a
    proposed decrease in budget authority of $286 million for the Clean
    Coal Technology Program in fiscal year 1998 and an increase of $133
    million in budget authority in fiscal year 1999.
        Question. Isn't this somewhat disingenuous in that the
    Administration recognizes that some of these are not true savings from
    clean coal, because the deferral amount will become available right
    away next year?
        Answer. No. The proposed decrease in budget authority for fiscal
    year 1998 represents an earnest effort to be fiscally responsible in
    meeting budget constraints in fiscal year 1998, as well as reducing
    overall Clean Coal Program costs wherever possible. The combined
    rescission and deferral represents a proposed decrease in budget
    authority of $286 million for the Clean Coal Technology Program in
    fiscal year 1998 and an increase of $133 million in budget authority in
    fiscal year 1999. The proposed rescission amount of $153 million
    represents savings made available from approved project restructuring
    and projects that ended which results in a net decrease in overall
    program budget authority and would decrease the total cost of the Clean
    Coal Technology Program. The proposed deferral of $133 million would
    not decrease the total cost of the Clean Coal Technology Program. The
    proposed deferral reflects known and acknowledged schedule delays in
    several projects and does not represent ``true savings'' from the Clean
    Coal Technology Program.
        Question. Is it mere coincidence that the estimated savings from
    the clean coal deferral total nearly the same amount of the proposed
    fiscal year 1998 increase for the energy efficiency program?
         Answer. In the Department's annual budget process, all programs
    are independently reviewed in regard to their resource requirements. As
    a result of the schedule delays in several major Clean Coal projects, a
    deferral of budget authority from fiscal year 1998 to fiscal year 1999
    was proposed. The overall DOE budget for fiscal year 1998 reflects many
    decreases and increases due to various factors including resource
    requirements, schedule and priorities. The overall budget constraints
    require decisions that trade-off savings found in some programs against
    increased requirements in others in order to fund a balanced energy
    portfolio.
        Question. If we were to defer clean coal funding, wouldn't it make
    more sense to not spend any of the artificial savings in fiscal year
    1998 given that the dollars will be required in fiscal year 1999?
        Answer. The overall annual budget constraints for the Department
    require reallocation of resources between programs each year to conduct
    programs in the most efficient manner.
        Question. In addition to the proposed deferral, the budget also
    includes a recommended rescission of $153 million. To date, Congress
    has already rescinded $323 million from the original clean coal program
    appropriation of $2.7 billion. Has DOE been able to identify $323
    million in savings yet? In other words, is there enough funding in the
    clean coal program under current law to complete projects still in the
    pipeline?
        Answer. Under current law, there is a surplus of funds after
    fulfilling all commitments for the remaining projects in the Clean Coal
    Technology Program. Even after the proposed $153 million rescission for
    fiscal year 1998, adequate funds would exist to fully fund all projects
    in the pipeline assuming no major contingencies.
        Question. It is my understanding that a restructuring of the
    PENELEC clean coal project in Pennsylvania must occur if the clean coal
    program is to avoid a deficit under the proposed rescission scenario.
    What is the status of this project and has the necessary restructuring
    (and resulting savings) occurred?
        Answer. Negotiations are continuing with PENELEC to restructure and
    downsize the Warren Station External Fired Combined Cycle (EFCC)
    Project. Additionally, negotiations are continuing with PENELEC to
    restructure and relocate the York Atmospheric Fluidized Bed Combustion
    (AFBC) Project. The projected savings of $40 million are associated
    with the downsized Warren Station EFCC Project and not the York AFBC
    Project. The resulting savings are expected to occur when the
    Cooperative Agreement is officially modified. Even after the proposed
    $153 million rescission for fiscal year 1998, adequate funds would
    exist to fully fund all projects in the pipeline assuming no major
    contingencies.
        Question. When do you expect to know for sure whether the estimated
    savings from PENELEC will accrue?
        Answer. The estimated savings which are based on the Warren Station
    EFCC Project will officially occur when the Department makes a decision
    on the restructured project and officially modifies the Cooperative
    Agreement. The Department expects to make a decision on both of these
    projects and modify the Cooperative Agreements accordingly by early
    summer 1997.
        Question. What is DOE's current level of confidence on the cost
    estimates associated with the clean coal projects currently in the
    pipeline?
        Answer. The Department's confidence level in the remaining Clean
    Coal projects is the same as it has been for all the other projects.
    The cost estimates on all these projects are normally accurate to
    within plus or minus 20 percent in the early design stages, and the
    accuracy increases as the projects progress toward completion. We are
    likely to incur cost increases with the remaining projects, as they are
    large repowering and greenfield projects, which are in the design
    stage. However, as most of the Clean Coal Technology projects are
    either in operation or have ended, the need isn't as great to maintain
    as large a management reserve for cost increases. Please note that each
    Cooperative Agreement states that the government will consider cost
    sharing cost increases subject to available appropriations, but the
    government is under no obligation to fund them.
        Question. Under the proposed rescission, is there any allowance
    being provided for the possibility of cost growth?
        Answer. Yes. The Department has taken into account the anticipated
    savings from restructured projects, the risk of projects not continuing
    to completion, and probable cost increases on other projects in
    arriving at the proposed rescission. The Department believes that
    sufficient funds remain even with the proposed rescission in fiscal
    year 1998 to complete the existing Clean Coal projects.
        Question. Is cost growth something that is common with new
    technologies?
        Answer. Cost growth is common for new technology demonstrations.
    Cost growth was anticipated from the beginning of the program, with the
    Department provided the authority to share in cost growth of up to 25
    percent of the originally awarded federal commitment to a project.
        Question. Has cost growth been experienced on the earlier clean
    coal projects?
        Answer. Of the twenty projects that have concluded operations under
    the Clean Coal Program, only three projects had no cost growth from the
    original Cooperative Agreement amount. Two additional projects had
    minimal cost growth to perform emissions characterization testing that
    was not part of the originally budgeted project. Of the 40 projects
    currently in the Clean Coal inventory, 26 have had some amount of
    federal sharing in cost growth. As of December 31, 1996, the Department
    has approved a total of nearly $120 million in federal funds for cost
    growth in the Clean Coal Program.
        Question. On another clean coal matter, the Administration is
    proposing an advance appropriation of $50 million, to become available
    in fiscal year 1999, to initiate an international clean coal program
    with China. Does the Administration envision that this will be a one-
    time requirement, or will there be additional international clean coal
    projects in the future?
        Answer. This will be a one-time requirement.
        Question. What is different about the technology proposed for this
    international initiative from the technologies currently being worked
    on as part of the domestic clean coal initiative?
        Answer. The IGCC technology that would be utilized for this
    initiative must be adapted for the Chinese environment. Adaptations
    would be made to achieve lower capital costs, performance with Chinese
    coals, and lower operating costs. Modifications would also be made to
    the technology to allow for less stringent performance standards than
    those imposed for the U.S. market.
                         advanced clean fuels research
    Coal preparation
        Question. The fiscal year 1998 budget proposes to increase funding
    for air toxics by $812,000 in order to finance a down selection from
    three contractors to one in the area of advanced coal cleaning. Why is
    increased funding necessary for a downselection?
        Answer. Increased funding is necessary for a downselection because
    of the larger scale research and development effort now necessary to
    fully investigate the potential of advanced coal cleaning to reduce the
    trace elements that are precursors to potential hazardous air
    pollutants that could be emitted during coal combustion. Research work
    on air toxics (Phase I) has already demonstrated some good results that
    are worthy enough to proceed with obtaining economic, as well as
    technical, information on the technology.
        Question. Does going to one contractor correlate with proceeding to
    a next phase of the air toxics program?
        Answer. Yes, going to one contractor correlates with proceeding to
    Phase II of the air toxics program.
        Question. If so, what will be the next major objective to be
    accomplished by the remaining contractor?
        Answer. The next major objective to be accomplished by the
    remaining contractor is a proof-of-concept demonstration of a coal
    cleaning technology for control of hazardous air pollutant precursors.
        Question. The budget proposes an increase of $140,000 for advanced
    dewatering research to enable the commercial deployment of advanced
    coal cleaning systems already developed. How will the increased funding
    proposed expedite the resolution of problems in this area which have
    impeded commercial development?
        Answer. The budget proposes an increase of $420,000 for advanced
    dewatering research to facilitate greater commercialization of advanced
    dewatering and fine coal cleaning technologies. This increased funding
    will expedite the resolution of problems in this area by supporting the
    formation of a coal preparation or solid fuels consortium that will
    interface with industry and conduct appropriate research related to
    solid fuels processing. The consortium will include academic, industry,
    and government involvement.
        Question. If the technology involved is otherwise commercially
    viable, why is this not an investment that the owner of the technology
    should make?
        Answer. The owner of the technology does not have sufficient
    resources to make the initial investment necessary to fully
    commercialize the technology.
        Question. An increase of $266,000 is proposed to fund new ideas for
    lab scale research. The budget indicates these funds will be used for
    research on solid fuels for advanced combustion systems. What benefit
    would come from this higher funding level?
        Answer. This $266,000 increase is due to increased funding for a
    greater level of effort in advanced dewatering research as discussed in
    previous answers.
        Question. Why is it important to spend money on solid fuels for
    advanced combustion systems?
        Answer. The benefit that will come from the higher funding will be
    greater commercialization of fine coal cleaning technologies. It is
    important to spend money on solid fuels for advanced combustion systems
    because these technologies have the potential to effect significant
    improvements in coal-based power systems, including improved
    efficiency, economics, and environmental performance. Other benefits
    include the potential to develop coal-based fuels of consistent quality
    for new boiler applications, the ability to reduce emissions of acid
    rain and hazardous air pollutant precursors from coal-fired power
    systems, and a reduced dependence on imported oil.
                              direct liquefaction
    In-house research and advanced liquefaction
        Question. A reduction of $279,000 is proposed for in-house research
    on advanced liquefaction. This will affect activities at the Pittsburgh
    site. What impact will this funding reduction have?
        Answer. The reduction of $279,000 is proposed in the key activity
    for laboratory and bench scale innovative research which includes FETC
    in-house research. Therefore this reduction will come out of in-house
    innovative research activities which support coprocessing of coal and
    waste and direct liquefaction. This reduction is consistent with the
    redirection of priorities leading to a change in emphasis of activities
    at FETC. The development of liquefaction technologies will proceed on a
    longer schedule while efforts on other activities will be accelerated.
        Question. What activities will be eliminated at the lower funding
    level?
        Answer. $200,000 of this reduction will come out of in-house
    innovative research activities which supports coprocessing of coal and
    waste and direct liquefaction. Therefore, these activities will be
    stretched-out. It is not anticipated that any projects will have to be
    eliminated.
                         coprocessing of coal and waste
        Question. An increase of $595,000 is proposed for coprocessing of
    coal and waste. What is the objective of conducting bench-scale studies
    in this area?
        Answer. Coprocessing of waste products from coal is the most
    promising approach very recently found for greatly reducing the cost of
    liquid fuels from coal (while also eliminating waste products).
    Development of a continuous bench scale database for coprocessing of
    wastes (such as plastics, tires refinery wastes, and mixed solid
    wastes) with coal and petroleum resid technology offers the potential
    for producing a supplementary source of low sulfur liquid distillate
    for refinery upgrading. The distillate crude could compete with
    petroleum crude at $20 per barrel or lower. An important additional
    benefit will be the reduction of landfill required for waste disposal.
        Question. What additional benefits are expected if the funding is
    increased from the current level of $300,000?
        Answer. The bench scale database for the concept would be expanded
    to include municipal solid waste which is primarily paper materials and
    refinery waste materials. This would significantly increase the
    availability of waste materials for production of distillate liquids
    and would also provide additional significant environmental benefits by
    reducing landfill space and providing environmental waste cleanup. This
    database would be available for use in feasibility studies and economic
    evaluation of this coprocessing concept.
        Question. How will this research area contribute to achieving the
    goal of developing economically competitive and environmentally
    acceptable technology for the manufacture of liquid fuels from coal?
        Answer. The development and demonstration of coprocessing of coal
    with resid and waste materials (plastics, tires, refinery wastes,
    municipal solid wastes) technology offers the potential for producing
    low sulfur, premium distillate crude which could compete with petroleum
    crude at $20 per barrel or less. The distillate would be utilized in
    existing refinery facilities. The liquefaction facilities would be
    state-of-art complying with all environmental siting requirements. The
    development and potential demonstration activities which will be
    partnered with industry would be directed to mitigate technical,
    economic and environmental concerns, so that commercialization of these
    technologies could be accomplished by the private sector without
    further government involvement.
        Question. What is different between this research initiative and
    the activities being pursued by the Consortium for Fossil Fuels
    Liquefaction?
        Answer. This research is focused on continuous bench scale
    development to achieve a database which can be utilized in further
    development of the technology leading to engineering scaleup and
    feasibility studies. The Consortium for Fossil Fuels Liquefaction is
    comprised of five universities (University of Kentucky, University of
    Pittsburgh, Auburn University, West Virginia University. University of
    Utah) and is chartered to conduct innovative studies to improve our
    understanding and providing novel approaches to direct liquefaction of
    coal. For the last several years the consortium has been conducting
    innovative laboratory research in the coprocessing of coal and waste
    materials, expanding the database by looking at additional sources of
    waste to be processed. This information is utilized as the basis for
    defining the continuous bench scale tests. The Consortium work and the
    continuous benchscale research is complementary.
                        pioneer plant feasibility study
        Question. The fiscal year 1998 budget proposes $100,000 for a
    ``pioneer plant feasibility study''. What is the proposed plant, and
    how is it different from liquefaction technologies that have, as of
    yet, not been cost-competitive?
        Answer. The purpose of the feasibility study is to further define
    the concept, feed materials including coal to be used, database
    requirements and siting issues related to the design of a ``pioneer
    plant'' by an industrial team. The direct liquefaction pioneer plant is
    envisioned to be a small commercial plant to demonstrate technology for
    coprocessing of coal with resid and wastes. It would be built adjacent
    to an existing refinery which would provide the resid for coprocessing,
    the low sulfur distillate crude would be returned to the refinery for
    upgrading to produce refined products, the waste gases produced in the
    liquefaction facility would be processed in the refinery and petcoke
    produced in the refinery could be used to produce hydrogen for the
    liquefaction process. The combing of these activities would
    substantially lower the capital cost of the liquefaction facility.
        The purpose of the first-of-kind ``pioneer plant'' demonstration,
    which would be partnered with an industrial group, would be to answer
    technical, economic and environmental issues so that private sector
    could finance and economically operate these facilities without any
    government involvement.
        The economic analysis based on bench scale data suggests that the
    syncrude distillate from a commercial coprocessing liquefaction plant
    could compete with crude at $20 per barrel or less.
        Question. Who are the partners on this feasibility study?
        Answer. The Federal Energy Technology Center earlier this year
    distributed a Sources Sought Announcement which asked for parties who
    would be interested in participating in feasibility studies to submit
    responses of interest. These responses from interested parties are
    currently being reviewed. The Office of Fossil Energy envisions
    significant participation from the private sector and interested
    stakeholders, such as state and local governments.
        Question. What is the cost-sharing that will be associated with
    this effort?
        Answer. There are no specific project discussions at this juncture.
    The Office of Fossil Energy is interested in substantial cost-share to
    be provided by the industrial and stakeholder partners for this
    activity.
        Question. What is the estimated cost to construct the plant?
        Answer. The specific costs of the pioneer plant will not be known
    until a feasibility study is completed which will define site specific
    aspects and produce the required engineering database. Preliminary
    estimates based on the existing bench scale database suggest that a
    plant to produce 12,000 barrels per day of distillate crude could cost
    in the $350 to $400 million range.
        Question. What would be the Federal share?
        Answer. The funding of the first-of-kind ``pioneer coprocessing
    plant'' would have to be negotiated between the industrial and
    stakeholder partners and the government. The staff of the Office of
    Fossil Energy, is studying innovative approaches to identify possible
    options that may be ways to pay the up-front costs for this ``first-of-
    kind'' pioneer plant demonstration. The proposed effort is to conduct a
    cost-shared feasibility study to better define engineering aspects and
    development concepts that could result in a successful project.
                             indirect liquefaction
    Air separation membrane development
        Question. In fiscal year 1998, the Department proposes to spend
    $191,000 to initiate development of an ``air separation membrane''. Why
    is development of this product necessary?
        Answer. In indirect coal liquefaction, oxygen or enriched air from
    the air separation plant is used to combust the coal in the gasifier to
    produce synthesis gas which is the precursor for liquid fuels and
    chemicals. Current air separation plants use cryogenic technology which
    is both capital and energy intensive and accounts for a significant
    portion of the product costs for indirect liquefaction. Recent advances
    in membrane R&D have shown its use in air separation offers great
    promise as a cheaper alternative to the conventional cryogenic
    technology. Any liquefaction technological developments that can
    significantly lower the cost of oxygen will result in U.S. technologies
    being more competitive in the global market.
        Question. How is it anticipated to contribute to lowering costs?
        Answer. In the conversion of coal, petroleum coke, biomass, waste
    plastics, and any other carbonaceous material to electricity, fuels,
    and chemicals via gasification, the production of oxygen via
    conventional cryogenic air separation technologies can account for up
    to 25 percent of the total capital cost of the facility. Preliminary
    indications are that the use of ceramic membranes for producing oxygen
    has potential for reducing the cost of oxygen by 35 percent. In a
    current CRADA, the economic impact of this novel technology on the cost
    of fuels and power from IGCC, Indirect Liquefaction, IGCC/indirect
    liquefaction coproduction, and advanced combustion technologies are
    being assessed. If such economic improvements are confirmed, it is
    envisioned that a joint project between the Indirect Liquefaction,
    IGCC, and Advanced Power Systems programs would be initiated to speed
    the development and commercialization of this technology. If
    successful, improvements in efficiency will result in their being
    competitive in the market in the next decade.
        Question. What previous investments in indirect liquefaction are
    failing to realize their potential because of this problem?
        Answer. None. The major thrust of the indirect liquefaction program
    has been to develop a novel liquid phase reactor to convert synthesis
    gas from advanced coal gasifiers to premium fuels and chemicals. The
    accomplishments from this program include the successful proof-of-
    concept (POC) scale development of liquid phase methanol technology
    which is now under commercial demonstration at the Eastman Chemicals
    plant in Kingsport, Tennessee with the support from the DOE Clean Coal
    Technology program. The current effort is to extend the know-how in
    this technology to the liquid phase Fischer-Tropsch (F-T) technology
    which is to convert synthesis gas to premium hydrocarbon fuels and
    chemicals. The proposed work on air separation membrane represents a
    new initiative which is to further reduce the costs of indirect liquids
    through a system integration approach.
        Question. What is the estimated total cost to resolve the air
    separation membrane issue?
        Answer. The proposed program would be structured in two phases:
    Phase 1 is laboratory research to validate technical feasibility. The
    federal cost of the phase 1 program is estimated to be $12 million over
    three years, assuming at least 50 percent industrial cost share. In
    addition, due to the applicability of air separation technology to both
    fuel and power systems it is anticipated that federal costs would be
    shared through a joint program in this area. If the proposed effort
    were started in fiscal year 1999, phase I activity would be completed
    around 2002.
                consortium for fossil fuel liquefaction sciences
        Question. A group of six universities, including West Virginia
    University, has been conducting research and investing promising
    technologies for ways of converting waste materials into oil using coal
    liquefaction technology. If a cost-effective means can be determined,
    this may be a way to achieve the environmental benefit of helping
    dispose of urban waste by co-processing it with coal to develop a new
    domestic oil source. What results have been achieved to date as a
    result of Federal support provided for this consortium?
        Answer. The Consortium for Fossil Fuel Liquefaction Sciences has
    conducted considerable laboratory experimentation of coal with waste
    material such as tires, plastics, paper and other waste materials to
    provide the fundamentals which are now being exploited at the
    continuous bench scale level. The consortium is also performing a study
    to determine the optimum feeds and conditions for a conceptual waste/
    coal liquefaction facility. This approach has the potential of reducing
    the cost of coal derived liquid fuels to below $20 a barrel.
        Question. Are there important ``next steps'' that need to be taken?
        Answer. The next steps would include development of a continuous
    bench scale database for coprocessing of coal/petroleum resid/waste
    materials. The continuous database is being developed by Hydrocarbon
    Technologies, Inc. (HTI). Emphasis is being placed on establishing
    process conditions and expanding the waste materials that can be
    effectively handled. This database will be utilized for future
    feasibility studies for a coprocessing ``pioneer plant'' facility.
        Question. In fiscal year 1997, the consortium is funded at a level
    of $1 million. The group has requested $1.7 million for fiscal year
    1998, but no funding is proposed in the DOE budget. What could be
    accomplished if the Consortium's requested funding level ($1.7 million)
    is provided?
        Answer. If the requested funding of $1.7 million for fiscal year
    1998 is provided, the Consortium could continue investigating
    additional methods for pre-treatment and exploring additional
    coprocessing feed mixtures utilizing coal with municipal solid waste,
    plastics, used tires, and other hydrogen-rich waste. The program would
    be able to explore additional commercial opportunities to utilize the
    cleaned product stream and convert it into high value products such as
    commercial chemicals for transportation fuel production. Efforts would
    also increase to improve the environmental performance of direct
    liquefaction concepts leading to potential reduction in carbon dioxide
    production.
        Question. What would be achieved if the prior year funding level
    ($1 million) is maintained?
        Answer. With the restoration of the prior year (fiscal year 1997)
    funding level of $1.0 million, the Consortium could continue to
    maintain the present level of effort in conducting bench-scale research
    to improve the data base of knowledge for coal/waste coprocessing.
                     advanced clean/efficient power systems
    Advanced pulverized coal-fired powerplant
        Question. A major objective of this program is to redesign the
    currently widely- used pulverized coal combustion system to gain major
    performance improvements. In the end, it is hoped that the result will
    be a powerplant design with very low emissions (<1/6 New Source
    Performance Standards) and significantly higher efficiency (> 42
    percent) than conventional plants. If this can be achieved, export
    opportunities for these technologies could be pursued.
        Low Emission Boiler System (LEBS).--This program was conceived as a
    four phase technology development effort to test at a scale sufficient
    to provide performance guarantees for a commercial system when the test
    is completed. Three contractors completed phase II (engineering
    development) in fiscal year 1996; during fiscal year 1997, three
    contractors will complete Phase III (engineering design of proof-of-
    concept test facility); for fiscal year 1998--budget proposes
    downselect to one contractor to continue Phase IV (proof-of-concept
    facility construction and operation). Based on the results to date in
    the LEBS program, are there particular strengths of the various
    technologies being developed by the three contractors that would lead
    DOE to support continuing more than one contractor to Phase IV?
        Answer. The program objectives, plant efficiency, emissions levels,
    and cost are the same for each contractor. Although each contractor
    uses different technologies, based on the results, to date, it appears
    each will meet the requirements for Phase II and Phase III. Currently,
    it is premature to judge the specific strengths and weaknesses of the
    technologies under development. However, it can be observed that two
    distinct development approaches are being pursued. One, the Kalina
    cycle, represents a high risk, revolutionary approach to bring a
    totally new power technology into the marketplace. The other represents
    a low risk approach to greatly extend the performance of pulverized
    coal plants in a less revolutionary manner. The process for selecting a
    developer to continue in Phase IV of the LEBS program will be to form a
    Federal team of experts who will review and evaluate the Phase II and
    Phase III results as submitted by each of the three contractors.
    Selection will be based on an evaluation of the submissions and arrived
    at by a ranking grounded on a set of technical and other criteria.
        Question. Are the economics of some of the technologies under
    consideration more attractive than others?
        Answer. Until the submission of the results for Phase II and Phase
    III, there is no basis to conclude that one technology is more
    economically attractive than another technology.
        Question. How so?
        Answer. A thorough and critical evaluation of the results for
    Phases II and III is required before a conclusion regarding the
    economics of each technology can be made.
        Question. What is the schedule for making a down-selection prior to
    the start of Phase IV?
        Answer. Results for Phase II and Phase III are due at the end of
    July 1997. A 2-month evaluation period is planned. Phase IV is
    scheduled to begin in early fiscal year 1998.
        Question. Might the selection of one contractor's proposed
    technology as compared to another's affect the funding requirements for
    fiscal year 1998?
        Answer. Yes, but we expect to negotiate a cost, a cost-sharing
    level, and a schedule for the project acceptable to both DOE and the
    contractor.
        Question. To what extent is the overall DOE funding required over
    the life of Phase IV a factor in the down selection decision-making
    process?
        Answer. We expect to select the best proposal based on a thorough
    evaluation of the results from Phases II and III as ranked against a
    set of criteria. For the anticipated funding, we expect to negotiate a
    cost, a cost-sharing level, and a schedule for the project acceptable
    to both DOE and the contractor.
        Question. What funding is necessary in fiscal year 1998 to begin
    Phase IV?
        Answer. We believe the request for $5,462,000 allows us to begin
    Phase IV in fiscal year 1998.
        Question. What was the original program plan for the duration of
    Phase IV?
        Answer. The duration of Phase IV was always anticipated to be
    approximately 3 years.
        Question. Is it possible to stick to this schedule at the funding
    level proposed for fiscal year 1998?
        Answer. Until a developer is selected and negotiations begin, it is
    premature to know, with any certainty, the actual duration of Phase IV.
    For the larger proposals, the schedule could be extended beyond three
    years if funding levels could be increased sufficiently in future
    years.
                              indirect fired cycle
        Question. The High Performance Power Systems (HIPPS) program
    incorporates a new high temperature advanced furnace that integrates
    the combustion, heat transfer, and emission control processes. As with
    LEBS, HIPPS is geared at increased efficiencies (> 45 percent) and
    reduced emissions (< one-tenth New Source Performance Standards). These
    system efficiencies will also contribute to reduced carbon dioxide
    emissions levels. The fiscal year 1998 budget proposes continuation of
    Phase II (engineering development and testing) for the HIPPS program.
    There are presently two contractors participating in this program. An
    increase of $1.5 million is proposed to put the program on a schedule
    to complete Phase II by the year 2000. What is the estimated cost to
    complete Phase II?
        Answer. In order to complete Phase II at the end of fiscal year
    2000, a total of $44 million is required for fiscal years 1998 to 2000.
        Question. What level of cost-sharing are the partners contributing
    to this program?
        Answer. The cost sharing required in Phase II of the HIPPS project
    is 25 percent.
        Question. Given the significant additional costs and time required
    to complete Phase II, should this program be continued?
        Answer. We recommend that HIPPS be continued. The Fossil Energy
    RD&D Program has a number of technologies in its portfolio, HIPPS being
    one of them. This balanced approach reduces the overall risk in
    achieving the Fossil Energy mission. To not continue HIPPS, increases
    this risk.
        Question. What consequences will accrue if the increased funding
    for HIPPS is not provided for fiscal year 1998?
        Answer. The schedule will be stretched. However, the current re-
    structuring occurring in the electrical power industry has widened the
    window of opportunity for advanced pulverized coal technologies. At
    this time, a delay of several years does not appear to have a major
    impact on the potential success of HIPPS technology.
        Question. Will the schedule be stretched to the point that it no
    longer makes sense to continue HIPPS?
        Answer. It depends on how it is stretched. A schedule based on
    historical funding does not appear to place the success of HIPPS
    technology in jeopardy since it is a longer-term technology.
        Question. Which is more important based on technological promise--
    continuing more contractors to Phase IV in LEBS or continuing the HIPPS
    program?
        Answer. While LEBS currently is of higher priority, both LEBS and
    HIPPS are promising technologies--LEBS for the near-term and HIPPS for
    the mid-term. Both should remain in the Fossil Energy portfolio of
    technologies. The approach of including several technologies that would
    enter the market at different time periods reduces the overall risk of
    Fossil Energy achieving its mission.
                     integrated gasification combined cycle
        Question. This technology can convert coal into a clean gas used to
    fuel gas turbines and provide steam for a steam turbine cycle.
    Increased efficiencies (> 52 percent) and reduced emissions (< one-
    tenth NSPS) are the goal. To date, costs have not been reduced
    sufficiently to make this a widely used technology. DOE's program is
    focused on hot gas sulfur and particulate removal and control of air
    toxics and pollutants. To assist in these efforts, a desulfurizer
    process development unit (PDU) is being constructed at Morgantown. What
    is the status of construction of this unit?
        Answer. As of February 1997, PDU construction is 78 percent
    complete and scheduled for start of shakedown operation in fall 1997.
    Integrated operation will begin in June 1998.
        Question. Are additional funds necessary in fiscal year 1998 to
    complete construction?
        Answer. No funds in addition to the fiscal year 1998 Budget Request
    are needed to complete construction. Within the funding for IGCC, $2.4M
    will be required to complete construction activities and $530,000 will
    be required to complete shakedown operation activities during fiscal
    year 1998 (total $2.93M).
        Question. Are these funds included in the budget request?
        Answer. Yes, the required funds have been included in the fiscal
    year 1998 budget request.
        Question. What is the significance of the desulfurizer PDU to
    making integrated gasification combined cycle technology more cost-
    competitive?
        Answer. The Hot Gas Desulfurization (HGD) PDU is a flexible
    facility capable of operating either as a fluid-bed or transport-bed
    reactor. Reactant gas is provided by a synthesis gas generator that can
    simulate a broad range of coal gasification product compositions. The
    PDU will operate over a wide range of sulfur concentrations and process
    conditions to optimize performance and provide engineering data for a
    wide variety of IGCC applications. Compared to other HGD technologies,
    the transport and fluid-bed reactors provide for a stable operation,
    improved heat integration, improved sorbent performance and life, and
    lower capital cost. These features are expected to lead to a reduction
    in capital cost, as well as higher efficiencies for future IGCC
    applications. The engineering data and capital cost reduction to be
    provided by the PDU are expected to lead to a reduction in the cost of
    electricity.
        Question. How will the PDU contribute to better efficiency and
    reduced emissions?
        Answer. Development of the fluid-bed and transport reactor
    technology for hot gas desulfurization is expected to result in
    approximately a 2 percentage point improvement in overall plant thermal
    efficiency compared to conventional technologies. Such improvements in
    efficiency from hot gas desulfurization coupled with further
    developments in advanced power cycles, advancements in air separation
    technologies using ceramic membranes, and the coproduction of
    environmentally superior transportation fuels and/or high value
    chemicals, has potential for achieving very high thermal efficiencies,
    approaching 55-60 percent by 2010. At these efficiencies, IGCC
    technologies will be among the cleanest, environmentally friendliest
    technologies for the generation of electricity and other products.
        Question. The budget also includes a proposed increase of $1.251
    million for enhanced testing of sorbents to address hot gas clean-up
    and sulfur controls. What portion of this funding will be used for
    testing of sorbents in the desulfurizer being constructed at
    Morgantown?
        Answer. No portion of this funding increase will be used for
    testing of sorbents in the FETC Morgantown hot gas desulfurization PDU.
    The funding increase is for continued R&D and testing of novel and
    advanced sorbents to control sulfur and NOx emissions,
    completing R&D on sulfur recovery concepts, and validating performance
    of promising hot gas cleanup materials, components, or subsystems in
    facilities through slipstream/coupon testing. Such work is to be
    conducted at General Electric, Research Triangle Institute, and
    industrial companies yet to be determined through competitive
    solicitations.
        Question. Why is it important to conduct tests both at Morgantown
    and at the IGCC clean coal project at Tampa?
        Answer. Two very different reactor concepts are being tested by
    Tampa Electric and FETC Morgantown. The Tampa project will demonstrate
    the General Electric moving-bed desulfurizer concept for hot gas
    cleanup. This concept has been developed by General Electric over the
    past 10 years through DOE sponsorship. It has been taken through the
    research scale-up process from bench-scale simulated gas testing to
    real coal gasifier-fired Process Development Unit testing. It is ready
    for demonstration in a commercial setting as planned for this year at
    Tampa Electric's Polk Power Station. The FETC desulfurizer is at the
    Process Development Unit testing scale. It employs two reactor
    concepts, the fluid-bed and transport-bed reactor for hot gas
    desulfurization. It is fired by a simulated coal gas, and initial R&D
    efforts will focus on transport-bed desulfurization.
        All three concepts are being developed and proven out in order to
    establish the most efficient and effective desulfurizer system for hot
    gas cleanup. Hot gas cleanup is a critical subsystem to both IGCC and
    PFB technologies in order to achieve much higher efficiencies. The
    Department believes that it is necessary to develop more than one
    desulfurizer system to minimize the technical risk. Additionally, the
    two desulfurizers at FETC Morgantown will be used to test and develop
    various sulfur sorbents. The Tampa CCT project is demonstrating the
    larger G.E. moving-bed desulfurizer as a critical subsystem versus
    conducting a sorbent R&D test program.
                           pressurized fluidized bed
        Question. This technology involves high combustion and heat
    transfer efficiency; sulfur dioxide removal through the introduction of
    sorbents; and low NOx emissions as a result of low
    combustion temperatures. In fiscal year 1998, an increase of $796,000
    is recommended for continued research at Morgantown on hot gas
    particulate cleanup and to improve understanding of combustion in the
    PFB technology. The objective is to reduce the risks associated with
    commercialization of PFB technology. To what extent is the funding
    necessary for the research at Morgantown linked to technical issues
    that have surfaced as a result of testing done at the Wilsonville
    facility?
        Answer. Filter testing to date at Wilsonville is limited to
    shakedown mode of operation. There are insufficient hours of operation
    for technical issues to surface to date. The Wilsonville Advanced PFBC
    pilot scale process, which includes high-temperature filter systems, is
    scheduled to go into operation in first quarter 1998. The Morgantown
    Research Development Program is the primary center of effort which
    focuses on filter systems development in support of future testing at
    Wilsonville. For example, the filtration systems are being developed in
    partnership with scientists at the Oak Ridge National Laboratory and
    with cost-share industrial vendors such as Westinghouse Science &
    Technology Center (Pittsburgh, PA); Pall Corporation (Cortland, NY);
    Babcock & Wilcox (Lynchburg, VA); DuPont/Lanxide (Newark, DE);
    Techniweave (Rochester, NH); Combustion Power Company (San Mateo, CA);
    and Industrial Filter & Pump Mfg. Company (Cicero, IL). Other vendors
    providing systems and components include Coors Ceramics (Golden, CO);
    3M (St. Paul, MN); Refractron Technologies Corp. (Newark, NY); and
    CeraMem (Waltham, MA). This research is necessary in support of the
    performance of advanced PFBC systems in order to meet current and
    future particulate emissions standards and stringent gas turbine inlet
    specifications. In addition to supporting the Wilsonville facility, the
    Morgantown research also supports the DOE Clean Coal Technology Program
    which currently has one advanced PFBC project that will utilize this
    technology.
        Question. If the increased funding is not provided, what
    consequence will this have on making further progress towards proving
    the viability of the PFB technology?
        Answer. If the increased funding is not provided, it would
    significantly delay resolution of key filter issues, e.g., long-term
    temperature degradation, overall system reliability, and would
    significantly increase the performance risks associated with the hot
    gas cleanup system operation at Wilsonville and the Lakeland Advanced
    PFBC CCT Demonstration project.
                              natural gas research
    Coal mine methane
        Question. The fiscal year 1998 budget proposes $963,000 for
    research into the issue of coalmine methane. Current mining practices
    often result in venting of methane gas to the atmosphere, which is a
    concern in terms of greenhouse gases. Is the release of methane gas
    into the atmosphere a problem for all mines, or is it particularly
    focused on smaller mines?
        Answer. Methane emissions from coal mines are a significant source
    of greenhouse gas. EPA estimates that in 1988 about 9.0 to 12.6 million
    metric tons of carbon equivalent (MMTce) was released from the methane
    emission of 60 mines classified as large and gassy (greater than 0.5
    million tons of coal per year and greater than 500 cubic feet of
    methane per ton of coal). EPA further estimates that 19.2 to 30.0 MMTce
    will be released from coal mines in 2000.
        Question. Why is it more of a problem for smaller mines?
        Answer. The goal of the program is to expand existing research
    efforts to broaden the range of cost-effective technologies/methods for
    recovering and utilizing methane associated with mining, especially in
    smaller mines where the economics of methane recovery is marginal.
        Question. How would the proposed funds be used?
        Answer. Ten Phase I awards were made in fiscal year 1995 for
    feasibility studies in response to a competitive solicitation that
    sought proposals for cost-shared demonstrations of alternative ways by
    which recoverable methane released in the course of underground coal
    mining could be economically utilized. Based on an assessment of these
    studies, five of the proposers were selected for Phase II engineering
    design preparation. The requested amount would fund the Phase II
    Engineering Design for the five contractors selected.
                           advanced turbines program
        Question. In fiscal year 1997, Congress funded the advanced
    turbines program at a level of $46.6 million. In fiscal year 1998, the
    Administration proposes to reduce this program by $15.2 million to a
    level of $31.4 million. This reduction occurs despite indications that
    development of advanced turbines is a high priority because of the
    potential results--high efficiency (greater than 60 percent, as
    compared to current power generation systems in the 35 percent range).
    When the turbine program began, the Department laid out its plan for a
    comprehensive program and a series of timetables. Based on the funding
    provided to date for this program, what is the current schedule for
    completion of the turbines program?
        Answer. Based on the funding to date, and assuming future funding
    is consistent with the ATS Turbine funding profile provided to Congress
    in fiscal year 1994, estimated completion is the end of 2000. However,
    with the fiscal year 1998 budget request of $31.4 million, the
    estimated completion is the end of 2002.
        Question. How does this compare to the initial proposal?
        Answer. The funding provided thus far is consistent with the same
    completion date as the initial proposal. However, with the fiscal year
    1998 budget request, the estimated completion is stretched out by two
    years.
        Question. How does the funding level proposed for fiscal year 1998
    affect the schedule?
        Answer. The administrative budget for fiscal year 1998 of $31.4
    million would stretch out the program by 2 years.
        Question. What are the advantages and disadvantages of stretching
    out the schedule?
        Answer. An advantage to stretching out the schedule is that budget
    needs are spread out over a longer time period, thus enabling us to
    deal with budget constraints. The disadvantage to stretching out the
    schedule is the potential loss of market share to foreign competitors
    and increases in overall program cost due to slip in schedule.
        Question. How does it affect the overall cost of the program?
        Answer. The overall cost of the program would escalate due to
    general inflation caused by a stretch in the schedule. This is due to
    work that will have to be performed at a date later than currently
    planned with attendant higher labor and material costs.
        Question. Does the fiscal year 1998 budget include adequate funding
    to complete all aspects of Phase III (full scale component and sub-
    system testing)?
        Answer. The fiscal year 1998 budget of $31.4 million is adequate to
    complete the originally planned baseline activities for fiscal year
    1998 (including Phase III), but will stretch out the overall program
    schedule by up to 2 years.
        Question. Are there promising technological advances thus far in
    the turbines program that merit further investigation as part of phase
    III?
        Answer. With the funding levels of fiscal year 1997 ($46.6 million)
    Phase III has remained on schedule and several promising technological
    advances have been made in the program. Both General Electric and
    Westinghouse have performed tests and collected data to verify that
    their advanced gas turbine designs can be successfully manufactured and
    operated. During the past year, both General Electric and Westinghouse
    have made significant progress in advanced turbine engine design and
    technology validation testing. GE successfully completed heat transfer
    testing on full-scale, first-stage nozzle cascades at their laboratory
    in Evendale, Ohio. Results of the test showed that steam cooling is as
    effective as predicted with pre-test calculations. Steam cooling is a
    revolutionary technique which has not yet been used to enable gas
    turbine operation at ultra-high efficiencies. The GE Advanced
    Technology Combined Cycle promises improved economics of electric power
    generation with outstanding environmental performance in natural gas
    and coal-fired applications. Under the first year of Phase III,
    Westinghouse has also been highly successful in technology development
    and testing. During this stage of the program, Westinghouse has
    successfully developed and tested the piloted-ring combustor for ultra-
    low NOx emissions with excellent stability, advanced seals
    for increased turbine efficiency, new thermal barrier coatings (TBC),
    and a new inspection tool to spot TBC defects before they become a
    problem. These promising technologies developed during Phase III may
    merit further investigations beyond the originally planned baseline
    activities for Phase III.
        Question. If so, what funding is necessary to conduct the
    investigations?
        Answer. Funding required to conduct the investigations and to
    remain on the original schedule is estimated at $58.6 million for
    fiscal year 1998 as given in the 1994 Advanced Turbine System Program
    Report to Congress.
        Question. If the increased funding is not provided, how will DOE
    proceed?
        Answer. A stretch out in the program will occur and certain
    activities planned to be initiated in fiscal year 1998 will not begin
    until fiscal year 1999.
        Question. There are presently two major contractors participating
    in the utility-scale aspect of the turbines program. Is it DOE's
    estimation that a logical down-selection to one contractor should occur
    after completion of phase III and prior to initiation of phase IV?
        Answer. The original baseline program is structured to include a
    down-select to one contractor to continue in Phase IV. Down-selection
    to one contractor for Phase IV continuation could occur prior to final
    completion of Phase III if sufficient information from Phase III exists
    upon which to base a selection. The Department is also evaluating
    options for a restructured program that could include the retention of
    both developers, while maintaining cost to the Government within the
    original program estimate.
        Question. What funding is necessary to initiate phase IV and keep
    the program on-schedule?
        Answer. Funding of $58.6 million (as indicated in the 1994 Report
    to Congress) is necessary to initiate Phase IV and keep the program on-
    schedule.
        Question. Is this amount included in the fiscal year 1998 budget
    request? If not, what funding level is necessary to stay on schedule?
        Answer. No. The fiscal year 1998 budget request of $31.4 would
    result in a shortfall of $27.2 million needed to stay on the initial
    schedule. The funding level of $58.6 million would be required to stay
    on that schedule.
        Question. What is the estimated total cost of phase IV?
        Answer. The anticipated Government cost for Phase IV of the program
    is approximately $155 million.
        Question. What level of cost-sharing is anticipated?
        Answer. The anticipated range of industrial cost share for Phase IV
    is in the 60 percent range. It will vary depending on final selections
    and negotiations.
                                   fuel cells
        Question. Fuel cells represent another technology supported in the
    fossil energy program because of their promising prospect as a highly
    efficient and environmentally ``clean'' power system. Technology
    development continues to address cost barriers that preclude widespread
    market introduction. These systems, which can be operated using natural
    gas, and gas and coal (liquefied into gas), offer reduced pollutants
    and lower emissions than conventional power systems. When combined with
    gas turbines, fuel cells have the potential to operate at higher
    efficiencies (70 percent) and low emissions. The fiscal year 1998
    budget proposes $46.3 million in total for the fuel cell program, a
    decrease of $3.8 million from the fiscal year 1997 level. As with the
    turbines program, multiple contractors are involved in a multi-year
    program. What impact does the proposed fiscal year 1998 funding level
    have on the schedule for the molten-carbonate fuel cell program?
        Answer. The requested funding level for molten carbonate fuel cells
    for fiscal year 1998 is $32.7 million and is a result of having to
    balance the funding priorities given budget constraints. The impact is
    a 2-year slippage in the original schedule. It is now expected that
    developers would have a commercially ready molten carbonate fuel cell
    power system in 2002.
        Question. What funding would be necessary to maintain the current
    schedule?
        Answer. The estimated amount as reported by the contractors
    required in fiscal year 1998 to maintain the current schedule is a
    total of $50 million.
        Question. If the fiscal year 1997 funding level cannot be restored,
    would DOE consider downselecting to one contractor in the molten
    carbonate program?
        Answer. Downselecting to one contractor in the molten carbonate
    program is not planned. The prospects of successful market entry and a
    sustained domestic fuel cells industry are enhanced by maintaining both
    developers although it may result in the schedule being slipped.
        Question. What are the advantages and disadvantages of doing such a
    downselection at this time? (Appear to be in Phase III--product
    improvement and cost reduction--which is anticipated to last through
    fiscal year 1999).
        Answer. The advantages of a downselection to one contractor at this
    time are the concentration of requested molten carbonate funding to the
    remaining contractor thus allowing acceleration of that contractor's
    schedule. Disadvantages of down selection of a developer at this time
    include the following: It could result in collapse of the downselected
    developer or entry of foreign investors to fill the gap; since each
    developer is targeting a different power system application, it would
    leave that application unfilled; it would not protect the taxpayers'
    investment in this highly beneficial technology; the establishment of a
    strong, diverse, domestic fuel cell industry would not be realized;
    clean, highly efficient energy benefits, high value jobs and other
    economic benefits to the United States would be limited.
        Question. A different type of fuel cell technology is the solid
    oxide fuel cell. This program is proposed for funding at a level of
    $12.4 million in fiscal year 1998, roughly level with the fiscal year
    1997 appropriation. It is my understanding that the industry partner in
    this program has identified a need of $16 million for SOFC in fiscal
    year 1998. If this higher level is not provided, what do you anticipate
    will happen with the program?
        Answer. The requested level for fiscal year 1998 for the solid
    oxide fuel cell is a result of having to balance fiscal constraints
    with program needs to generate an overall balanced portfolio of
    technologies. The effect is that the developer is expected to stretch
    out the development schedules for 2 years and reach a commercially
    ready power system in about 2002.
                                     ______

                     Questions Submitted by Senator Cochran
                      state and local partnership programs
        Question.  Mr. Secretary, I've heard some good things about DOE's
    State and Local Partnership Programs as they operate in Mississippi.
    These funds have been used by our State Energy Office to create
    partnerships with other levels of government, non-profit entities, and
    businesses to leverage substantial additional funding and resources.
    While the fiscal year 1998 Request would provide a modest increase over
    last year, it is still far below the level provided back in fiscal year
    1995. Are you aware of the success that some of the States have
    achieved with these funds?
        Answer. We are indeed aware of the success of these programs. As
    example we cite the following programs sponsored by the State of
    Mississippi:
        Master Lease Program.--Utilizing services of legal and financial
    consultants funded under a DOE State Energy Program, the Mississippi
    Department of Economic and Community Development (MDECD)--Energy
    Division worked with state government leaders and secured legislative
    authority to establish a tax-exempt loan program through which a third-
    party financier would provide pre-arranged, tax-exempt financing for
    energy efficiency projects in public facilities. The Master Lease
    Program reduces high origination fees associated with individual
    project financing and streamlines an otherwise lengthy funding process.
    The Energy Division provides technical assistance to the public
    administrators in determining an energy management improvement plan and
    provides the financier with verification of project need. Currently,
    more than $2.5 million in energy projects with an estimated $400,000
    annual energy dollar savings are underway in facilities operated by
    public school and local governing authorities.
        Alternative Passenger Rail Program.--Funding provided by the MDECD-
    Energy Division along with other state, federal, local government
    units, and private entities has enabled four Mississippi coastal
    municipalities to renovate or construct manned or unmanned passenger
    facilities for both passenger and freight rail services. The
    renovations, such as parking lot improvements, upgrading handicapped
    facilities, and enhancing public waiting areas, enables the
    municipalities to promote energy efficiency by diverting traffic into
    intermodal activities such as park-and-ride and use of public transit
    for local travel along the Mississippi Gulf Coast.
        Energy Efficient Building.--Through local, state and federal
    funding, an energy efficient, environmentally controlled Math/Science
    Complex building was constructed on the campus of Northeast Mississippi
    Community College, Booneville, Mississippi. The MDECD-Energy Division
    provided both technical assistance and funds to install the most energy
    efficiency technologies currently available. The building has served as
    a model for energy efficient management planning for public use
    facilities. It has also been featured on national and international
    radio and television stations and in national consumer and trade
    magazines.
        Over the history of the State Energy Program and its predecessors,
    the State Energy Conservation Program and the Institutional
    Conservation Program, on a Nationwide basis over 8,000 State energy
    projects of many types have been funded, and over 69,000 schools and
    hospitals buildings have been made more energy efficient. Additional
    funding provided by DOE end-use sector offices since fiscal year 1996
    has allowed States to implement additional State-oriented building,
    industrial, transportation and utility sector programs.
        Question.  Given these good results, why isn't the funding for the
    State Partnership Programs being increased even more to bring it back
    in line with the fiscal year 1995 level of $53 million?
        Answer. In addition to the increased funding the Administration has
    proposed for the State Energy Program, which includes the State
    partnership activities, the Department of Energy has provided funding
    from end-use sector offices for Special Projects under SEP. Those funds
    totaled $11.2 million in fiscal year 1996 and $9.8 million in fiscal
    year 1997. It is anticipated that Special Projects funding will
    continue in fiscal year 1998. Traditionally State Energy Offices have
    been able to leverage their Federal funds for this program at the rate
    of 4 non-Federal dollars for each Federal dollar received, and have
    leveraged as much as 13 to 14 non-Federal dollars for each Federal
    dollar for some activities.
                             clean coal technology
        Question. Mr. Secretary, there is a very large clean coal
    technology project currently underway in Mississippi. What are your
    thoughts on DOE's long-term commitment to the Clean Coal Technology
    Program?
        Answer. The DOE is fully committed to the successful completion of
    the Clean Coal Technology Demonstration Program. Considerable effort is
    being dedicated to careful financial management and project stewardship
    of the program to successfully achieve a number of objectives. These
    objectives include completion of all projects in the program that
    continue to show success in achieving their technical milestones while
    at the same time providing the fiscal management that permits the
    Department to recommend the rescission of funds as they become excess
    to the needs of the program in accomplishing it's objectives.
                                     ______

                      Questions Submitted by Senator Leahy
                       energy information administration
        Question. Given this winter's unusually high prices for many fuel
    commodities across the country, especially home heating oil and
    propane, what actions is the Energy Information Agency planning to take
    to address the need for increased tracking and dissemination of
    information on trends in fuel prices?
        Answer. The Energy Information Administration took a number of
    measures to make the public aware of price volatility in the market
    place during the 1996/1997 heating season. EIA increased the frequency
    of its State Heating Oil and Propane Program (SHOPP) survey from
    semimonthly to weekly, thereby providing residential heating oil and
    propane prices on a more timely basis. In addition, EIA prepared
    numerous briefings, presentations, and articles, keeping the public
    informed of current market conditions. In early November, EIA
    cosponsored the Winter Fuels Conference in Washington, D.C., to inform
    energy officials about heating fuel outlooks for the upcoming winter
    heating season.
        Weekly price and supply information were disseminated through
    publications, market watch publications, phone (price hotline), fax-on-
    demand, and the Internet. Through its energy emergency communications
    protocol with State Energy and Emergency Management offices, EIA was
    able to exchange information with states regarding any concerns and
    problems associated with transportation logistics, motor driver waiver
    restrictions, refinery problems, and heating fuel shortages. EIA also
    participated in biweekly conference calls with state offices to keep
    them informed of energy markets, as well as the status of the Low
    Income Home Energy Assistance Program. Currently, EIA is conducting an
    analysis of the propane market to examine the supply and demand
    conditions of the past heating season. This report will be published in
    May 1997.
        With respect to increasing the tracking and dissemination of fuel
    price information, EIA recognizes that there are several gaps in its
    coverage of sensitive winter fuels. These include timely data on retail
    natural gas prices year around and on other winter fuels during
    critical stock building periods in the late summer. There is little
    likelihood these gaps can be filled with existing resources. EIA will
    continue, however, to conduct the SHOPP survey for the upcoming heating
    season, publish monthly price and supply data, provide heating fuel
    assessments as needed, and coordinate energy information with State and
    Federal agencies.
        Question. In particular, I am concerned about the effects of
    potential cuts in EIA's budget on the provision of state-based data.
    How will EIA insure that this information is produced?
        Answer. EIA recognizes that state-level data is essential to many
    users and expects to continue its current coverage within the 1998
    budget. This has been possible through smaller samples and more
    efficient editing, processing, and dissemination procedures, including
    electronic methods. Nevertheless, any erosion of EIA resources from
    proposed levels may jeopardize all programs, including state-level
    data.
        Question. The Administration has stated that one of its primary
    goals for the coal program of the Fossil Energy and Research
    Development is to develop super-clean emission control systems for
    SO2, NOx, air toxics and particulate matter that
    can be applied to existing plants. Has the Department conducted studies
    or models on how these developments will assist industry in meeting the
    proposed EPA ozone and fine particulate standards and what cost-savings
    have been projected for industry in developing new systems?
        Answer. We have not conducted any modeling studies of the proposed
    EPA ozone and particulates standards. However, the goals of our
    programs are to achieve greater than 95 percent reduction in
    SO2, 70- to 90-percent reduction in NOx at one-
    half the cost of currently available approaches, and to reduce
    particulate emissions to less than one-tenth New Source Performance
    Standards. Achievement of those goals could significantly reduce the
    cost of meeting potential new standards and the regulations implemented
    to achieve those standards.
                            electricity deregulation
        Question. As states begin to develop and implement their utility
    restructuring plans, a number of questions arise about the future of
    existing energy generating facilities that face regulatory and other
    costs that may affect their competitiveness. Some may argue that the
    closure of these plants will have environmental benefits and the
    federal government should look at ways to assist these facilities to be
    converted to more cost-effective power generation or decommissioning.
    Has the Department considered the establishment of a ``decommissioning
    fund'' to assist facilities and their surrounding communities reduce
    the economic impact of the transition.
        Answer. The overall impact of restructuring on plant retirement
    patterns is unclear, but we would not be surprised if it hastened the
    retirement of some existing fossil and nuclear generation units. We are
    aware of the potential economic hardships related to plant retirement,
    particularly in a small community that has relied on the plant as both
    a major source of employment and tax revenue. The Department has not,
    however, considered the idea of an economic decommissioning fund. The
    core of the problem appears to be the need for new economic development
    in communities affected by plant closures. We see this as an issue that
    states need to address as part of their overall plans for the
    transition to competition in retail electric markets.
                                     ______

                     Questions Submitted by Senator Dorgan
                      cooperative research and development
        Question. The scientific community, as well as the Administration
    itself in its 1994 report: ``Science in the National Interest'',
    recognizes the significance of basic research as the foundation for
    emerging technologies. The basic research component of the Jointly
    Sponsored Research program under the DOE Cooperative Agreement ensures
    that development activities address the public interest and not the
    special interests of individual industry partners; it is the antithesis
    of ``corporate welfare''. Yet, each year the Department of Energy's
    budget request fails to include funding for basic research under this
    program. Congress has traditionally restored funding for the basic
    research component so this crucial function has, fortunately, been able
    to continue. Can you provide me with the Department of Energy's
    justification for not including basic research funds in the Cooperative
    Research and Development Account?
        Answer. The Department is very satisfied with the cost sharing that
    both the Western Research Institute (WRI) and the University of North
    Dakota Energy and Environmental Research Center (UNDEERC) are receiving
    under the jointly sponsored research program. In order to get the
    greatest benefit from our limited budget resources, it was decided to
    support the cost shared aspects of this program instead of the base
    program, because it leverages the government funding to provide for
    significantly more research, and better assures its development in the
    marketplace.
        Question. The Department has recognized the EERC's expertise by
    including $1.864 million for cost-shared coal related research approved
    by the Department of Energy and which is consistent with the Fossil
    Energy mission. Did the DOE intend to limit this research initiative to
    coal to the exclusion of oil and gas, and if so, why?
        Answer. The Department, in requesting funds for University of North
    Dakota Energy and Environmental Research Center (UNDEERC), has
    anticipated a need to utilize the specific, recognized talents of the
    UNDEERC employees in the area of coal research. Currently, UNDEERC is
    providing support to Fossil Energy in the Advanced Clean/Efficient
    Power System area and it is possible that the Department would have a
    need for additional research in this area or in the Advanced Clean
    Fuels Research area.
                              advanced fuel cells
        Question. During your testimony before the subcommittee last year,
    you mentioned that you would be testing in the commercial market
    ``advanced fuel cells'' that were developed under the Fossil Fuel R&D
    Program. Can you advise me of the results of these tests?
        Answer. The Molten Carbonate Fuel Cell Program has two field test
    demonstrations of technology developed under the Fossil Energy R&D
    Program. The first is a megawatt-scale integrated unit in Santa Clara,
    CA, operated by the City of Santa Clara. Testing has just been
    completed. The general power plant operation was successful despite
    some technical problems encountered. The unit operated as designed and
    produced full rated electric power into the power grid resulting in the
    largest fuel cell power plant operated in the United States. The
    fundamental problems experienced were not caused by principal
    developmental equipment and are easily surmountable. Plant operating
    time was limited to about 4,000 hours primarily by private-sector
    funding. The second field test demonstration is a 250-kilowatt
    integrated unit near San Diego, CA, operated by the local utility. It
    contains the world's largest molten carbonate fuel cell stack.
    Operation began in January and is currently successfully generating
    about 80 percent of full electric power and co-generated heat.
    Operating time of about 8,000 hours is scheduled. No significant
    technological problems have been encountered.

                              subcommittee recess

        Senator Gorton. The subcommittee will stand in recess until
    9 a.m., Thursday, April 10, when we will receive testimony from
    the Bureau of Indian Affairs and the National Indian Gaming
    Commission.
        [Whereupon, at 4 p.m., Thursday, March 13, the subcommittee
    was recessed, to reconvene at 9 a.m., Thursday, April 10.]

      DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 1998

                                  ----------

                            THURSDAY, APRIL 10, 1997

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

                           DEPARTMENT OF THE INTERIOR

                            Bureau of Indian Affairs

    STATEMENT OF HON. ADA E. DEER, ASSISTANT SECRETARY FOR
                INDIAN AFFAIRS
    ACCOMPANIED BY:
            HILDA A. MANUEL, DEPUTY COMMISSIONER OF INDIAN AFFAIRS
            JOANN SEBASTIAN MORRIS, DIRECTOR, OFFICE OF INDIAN EDUCATION
                PROGRAMS
            DEBORAH J. MADDOX, DIRECTOR, OFFICE OF TRIBAL SERVICES
            TERRY VIRDEN, DIRECTOR, OFFICE OF TRUST RESPONSIBILITIES
            JAMES H. McDIVITT, ACTING DIRECTOR, OFFICE OF MANAGEMENT AND
                ADMINISTRATION
            LINDA RICHARDSON, DIRECTOR OF AUDIT AND EVALUATION
            JERRY SCHWEIGERT, FACILITIES TRANSITION PROGRAM STAFF
            ROSS MOONEY, DAM SAFETY OFFICER, BIA

                                 budget request

        Senator Gorton. Good morning. The subcommittee meets today
    for the second of its hearings on 1998 budget requests for
    agencies funded by the Subcommittee on Interior and Related
    Agencies.
        This morning we will hear testimony regarding the 1998
    budget request for the Bureau of Indian Affairs and the
    National Indian Gaming Commission. Testimony on the Office of
    the Special Trustee for American Indians will be heard in
    conjunction with the Secretary of the Interior's hearing.
        We will begin with the Bureau of Indian Affairs and then
    proceed to the National Indian Gaming Commission [NIGC].
    Because members of the subcommittee may have questions on both
    programs, we ask that all of the witnesses remain at the table
    for the duration of the hearing.
        Ada Deer, who has announced her departure from the BIA but
    who has not yet been replaced, will present testimony on the
    BIA budget together with staff. Ada Deer will also testify on
    behalf of the NIGC as the Commission's Acting Chairman. I
    encourage both the Bureau and the Commission to complete their
    processes for finding a permanent Assistant Secretary and
    Chair.
        Before you begin I would like to remind everyone here of
    the formidable task before the subcommittee. We are responsible
    for funding a number of diverse agencies. A large part of the
    bill is devoted to funding the four land management agencies:
    the Park Service, the Bureau of Land Management, the Fish and
    Wildlife Service, and the Forest Service. The cost of day to
    day management of our natural resources continues to increase
    in spite of a reduction in the rate of land acquisition, and
    inventories of infrastructure maintenance backlogs are
    increasingly unmet and growing into the billions of dollars.
        The second significant group of agencies in our bill is
    more loosely defined and consists of scientific agencies, like
    the Geological Survey, the Minerals Management Service, and the
    Office of Surface Mining, each of which has important
    regulatory, land management, or study responsibilities.
        The third major group of agencies in our bill are cultural:
    the Smithsonian, the National Gallery of Art, the Kennedy
    Center, and the National Endowments for the Arts and
    Humanities. While these agencies account for only a small
    portion of the total funds appropriated in the Interior bill,
    they are in many cases responsible for the protection of our
    Nation's heritage. As for the endowments, I imagine you are
    aware of the vocal support they receive from people all across
    the country, as well as from many Senators on both sides of the
    aisle.
        The fourth grouping of funding is for a portion of the
    Department of Energy programs.
        A final group consists of programs for the benefit of
    native Americans, including the BIA and the NIGC, but also
    including the Indian Health Service, for which the cost of
    simply maintaining existing levels of health services increases
    at an annual rate that exceeds inflation by a substantial
    amount.
        The bill will be increasingly burdened also by the costs
    associated with reform of trust responsibility functions.
        I have broken the bill out this way, Ms. Deer, so that you
    can see what your challenges are. The competition for funds
    will be even more fierce if the President and Congress are
    unable to enact a budget that includes measures that enable us
    to achieve balance without relying almost exclusively on
    reductions in discretionary spending. It is becoming ever more
    possible that such draconian measures are likely.
        The President's budget this year is relatively generous
    with this subcommittee, but the President's budget is also, by
    any rational and conservative standard, dramatically out of
    balance, and we will simply not get the allocation in the
    President's budget unless there is an agreement on entitlement
    reform and a number of other issues that have caused dramatic
    differences between the Congress and the President in the past.
        I hope we are going to be able to get that full allocation,
    but I am going to have to plan for a markup which has
    considerably less. As I told you each of the last 2 years,
    under those circumstances we are going to need your aid and
    assistance in setting priorities for the programs that are
    under the jurisdiction of the Bureau.
        With that, I will be delighted to hear your opening
    statement.

                       summary statement of hon. ada deer

        Ms. Deer. Thank you, Mr. Chairman, and the other
    distinguished members of the committee when they arrive.
        Senator Gorton. We hope we will have some more of them here
    before you are finished.
        Ms. Deer. I am delighted to be here today to present
    testimony on support of the President's request for the Indian
    affairs budget. Rather than read the prepared testimony which
    has already been submitted for the record, I will present a
    very short summary.

                           introduction of Associates

        Accompanying me we have: Hilda Manuel, Deputy Commissioner;
    Deborah Maddox, Director of Tribal Services; Terry Virden,
    Director of the Office of Trust Responsibilities; Joann
    Sebastian Morris, Director of Tribal Education; and Jim
    McDivitt, budget and administration. I am not sure I have your
    correct title, but those are your functions.
        Mr. McDivitt. Close enough.
        Ms. Deer. This budget is extremely lean. Yet it is
    responsive to the needs of the tribal communities. It provides
    funds for the basic operation of the Bureau and will permit us
    to alleviate some backlogs in trust programs. Great care has
    been taken in its preparation and we strongly urge this
    committee to appropriate funds at the President's requested
    level of $1.73 billion.
        The proposed budget contains a modest increase of $126
    million over the fiscal year 1997 appropriation. Nearly one-
    half of this increase will accrue to the tribal priority
    allocation to support vital tribal governmental services such
    as law enforcement, social services, child welfare programs,
    among others.
        Since 1995 shortfalls in these programs have been
    particularly serious. The exceptionally harsh weather patterns
    of the past 2 years have damaged buildings, roads, bridges, and
    other physical infrastructure in many areas, increasing needs
    as well.
        About one-third of the requested increase will benefit
    Indian schools. I have made a point of visiting as many tribal
    and BIA schools as possible. Recently I had the opportunity to
    visit the Chief Leschi High School in Washington State. While I
    was there I learned, Mr. Chairman, that you have been a strong
    advocate and supporter for the school, and I want you to know
    how much your efforts are appreciated.
        It is a wonderful school, one of the finest, and any
    community would be proud to have a school like this. I wish
    that every school in our system was like the Chief Leschi High
    School. Unfortunately, this is not the case. Classrooms are
    overcrowded in virtually all of the schools and some are in a
    disgraceful state of dilapidation and disrepair. The bus fleet
    is aging, a process accelerated by the rough roads and harsh
    climates in much of Indian country.
        Funding has not kept pace with the needs of our school
    system, which are growing. We anticipate an annual increase in
    enrollment of approximately 3 percent. One-third of the BIA's
    requested construction budget will be used for education
    construction so that we can continue to replace some of the
    unsafe schools on the priority list.
        The schools on that priority list are some of the oldest,
    most dilapidated schools in our system; $8 million of the
    requested increase in the facilities improvement budget and
    repair will be used for school repairs.
        At a minimum, we must provide children a safe learning
    environment in schools that meet accreditation standards and
    good teachers who are provided essential training and
    continuing education. The requested resources are vital to this
    result.
        The remainder of the requested increase will be used to
    address high priority needs in a number of areas, particularly
    in relation to public health and safety. Some $4 million of the
    increase will be used to repair structural deficiencies in
    high-hazard dams on Indian lands. This is particularly
    important given the severe flood conditions in many areas of
    the country this past year.
        We have requested a $12 million increase for public safety
    and justice construction, which will fund the construction and
    repair of detention centers and the establishment of fire
    protection safeguards and schools and other facilities.
        Mr. Chairman, I know that you are interested in determining
    the level of tribal investment in various tribal governmental
    operations in comparison to the Federal contribution. I am
    pleased to be able to address this issue here today. While
    there are some differences between the accounting methodologies
    used by Federal and tribal governments respectively, we were
    able to produce a reasonably reliable snapshot based on
    information in the single audit reports filed by tribal
    governments.
        We reviewed the expenditures documented by 192 tribes in
    these reports. The total came to 1.3 billion. You may be
    surprised to learn that 45 percent of the total, or $593
    million, came from the tribes' unrestricted general fund.
    Department of the Interior contributed slightly less than 25
    percent or $324 million. The remaining 30 percent, or $399
    million, came from other Federal and State sources.
        Finally, Mr. Chairman, I know you have had serious concerns
    about the BIA's efficiency. I would like to take this
    opportunity to emphasize that we have been sensitive and
    responsive to fair criticism. I have long been a strong and
    outspoken advocate of measures to make the Bureau a more
    efficient, effective responsive, and responsible agency, and I
    have pushed hard to improve its management and operations.
        We have also worked hard to carry out Congress' intent to
    shift greater authority and responsibility for program and
    service delivery to tribal governments. Accordingly, we have
    been able to reduce our FTE level by more than 2,000 positions
    since 1995, achieving our lowest staffing level in more than 15
    years. This is due to large congressional budget reductions as
    well as increased tribal contracting.
        In spite of diminished resources, we have achieved a 66-
    percent improvement in resolving material weaknesses in our
    management. We have satisfactorily resolved 11 material
    weaknesses, bringing the number from 16 to 5 in the last 4
    years. We have closed all of the 123 overdue external audits
    which existed when I was sworn in and none are overdue at this
    time.
        We have dramatically improved the rate at which corrective
    actions are taken to problems identified in internal audits, 11
    internal audits have been closed just since September.
        While we have worked hard to improve our management and
    become more efficient, we have realized some negative impacts
    from downsizing. The backlogs in land titles and records have
    increased. Recently the inspector general identified problems
    in our computer operations attributable to lack of staff. There
    was a loan servicing failure in the Phoenix area because of
    insufficient staff.
        The few modest increases requested in this budget will
    allow us to alleviate some of the most severe backlogs in our
    trust operations, including land titles and records and
    administrative records management, and to continue work toward
    replacement of the facilities management information system.

                               prepared statement

        We have made a real difference in the way our Nation
    conducts its affairs with the first Americans. Today 90 cents
    of every dollar directly serves tribal communities and tribal
    members. Gone is the attitude that the Bureau knows what is
    best for Indian people. Today the Bureau works to empower
    tribal governments. It is a new era. Yet we must be cognizant
    of and act consistently with the solemn duties and obligations
    to which our Nation pledged itself some 200 years ago.
        There are no frills in the budget that we have presented
    today. Hard choices were made and priorities were set. We urge
    favorably the consideration of the President's request.
        Thank you and we are open for questions.
        [The statement follows:]

                      Prepared Statement of Hon. Ada Deer

                                  introduction

        Good morning, Mr. Chairman and Members of the Committee.
        The Bureau of Indian Affairs (BIA) is the principal bureau
    within the Federal Government responsible for the
    administration of federal programs for federally recognized
    Indian tribes, and for promoting Indian self-determination. In
    addition, the BIA like all Federal agencies has a trust
    responsibility emanating from treaties, statutes, judicial
    decisions and agreements with tribal governments. The mission
    of the BIA is to enhance the quality of life, to promote
    economic opportunity, and to carry out the responsibility to
    protect and properly manage the trust assets of Indian tribes
    and Alaska Natives. The BIA provides resources and delivers the
    kinds of services to support tribal government operations
    similar to those provided by State, city, and municipal
    governments. These services include, but are not limited to:
    law enforcement, social services, education, housing
    improvements, loan opportunities for Indian businesses, and
    leasing of land.
        The BIA currently provides Federal services to
    approximately 1.2 million American Indians and Alaska Natives
    who are members of more than 550 federally recognized Indian
    tribes in the 48 contiguous States and in Alaska. The BIA
    administers more than 43 million acres of tribally-owned land,
    more than 10 million acres of individually-owned land, and over
    400,000 acres of federally owned land which is held in trust
    status.
        The Bureau is headed by the Assistant Secretary--Indian
    Affairs, who is responsible for BIA policy. Reporting to the
    Assistant Secretary are the Deputy Assistant Secretary for
    Indian Affairs, the Deputy Commissioner of Indian Affairs, the
    Director, Office of Indian Education Programs and the Directors
    of the Offices of American Indian Trust, Self Governance and
    Audit and Evaluation. Day-to-day operations of the BIA are
    directed by a Deputy Commissioner of Indian Affairs, who has
    authority over 12 Area Offices, 83 Agency Offices, three
    subagencies, six field stations, and two irrigation project
    offices. The Director of the Office of Indian Education
    Programs has direct authority over 26 education line officers.
    At the end of fiscal year 1996, the BIA's total employment was
    10,672 full-time equivalents.

                                  streamlining

        While increased tribal contracting of programs and the
    transfer of schools to tribal operation has resulted in a
    consistent decline in BIA staff over the last decade, the most
    significant change in Bureau staffing levels occurred in fiscal
    year 1996 as a result of Congressional budget reductions. The
    number of BIA staff is at its lowest level in over 15 years;
    FTE levels have been reduced by more than 2,000 since 1995.
        The BIA Central Office has been trimmed to a ``residual''
    level where only trust and inherently federal functions remain.
    Management and administrative positions have been reduced
    bureau wide to levels at or below the ratios and proportions
    recommended by the National Performance Review. Budget
    specialists, acquisition specialists, accountant positions, and
    personnel specialists have all been reduced by significant
    numbers.
        At the field level, many FTE reductions are taking place as
    a result of increased tribal contracting and self-governance
    compacting. One recent example is the Red Lake Agency in
    Minnesota, where the Red Lake Band of Chippewas is now
    contracting for all BIA funded programs resulting in the
    displacement of more than 70 Bureau employees. Another example
    is the Mississippi Band of Choctaws who are taking over all of
    the BIA facilities operations at the Choctaw Agency displacing
    12 to 15 BIA employees. Many tribes which have not previously
    contracted with the BIA are issuing notices of intent to
    contract an entire agency, such as in the Albuquerque Area, or
    law enforcement programs, as has occurred at several agencies.

                        fiscal year 1998 budget overview

        The fiscal year 1998 budget request for the BIA is $1.73
    billion in current appropriations, an increase of about $126
    million above the 1997 enacted level. The budget emphasizes the
    resources tribes need to provide basic reservation programs,
    develop strong and stable governments, ensure accreditation of
    Bureau schools, address critical infrastructure needs, and meet
    the Secretary's trust responsibilities. The BIA continues to
    keep administrative costs low; more than nine of every ten
    dollars appropriated to the BIA is provided directly to
    reservation programs.
        While the BIA's role has changed significantly in the last
    two decades with an increasingly greater emphasis on Indian
    self-determination, Indian tribes still look to the Bureau to
    provide a broad spectrum of critical and complex services
    administered either by the tribes or the BIA: from an education
    system for an estimated 52,400 elementary and secondary
    students; to 24 tribally controlled community colleges; to law
    enforcement and detention services on more than 200
    reservations; to social services programs for children,
    families, the elderly, and the disabled; to management of the
    forest, mineral, fishery and farmland resources on trust land;
    to the maintenance of more than 25 thousand miles of roads and
    bridges on rural and isolated reservations; to economic
    development programs in some of the more depressed areas in the
    U.S.; to the negotiation and implementation of legislated land
    and water claim settlements; to the replacement and repair of
    schools and detention centers; and to the repair of structural
    deficiencies on high hazard dams.

                          operation of indian programs

        In fiscal year 1998, the total request for Operation of
    Indian Programs (OIP) is $1.54 billion, an increase of $105
    million over the fiscal year 1997 enacted level.
        Within OIP, the single largest budget activity is tribal
    priority allocations (TPA) on which tribes depend for basic
    necessities and services such as law enforcement, child
    welfare, scholarships, natural resource management, and other
    programs critical to improving the quality of life and the
    economic potential of the reservations. Congress has given the
    tribes the flexibility to prioritize funds among TPA programs
    according to their unique needs and circumstances. TPA supports
    the goals of Indian self-determination by providing tribes with
    a choice of programs, as well as the means of delivery, either
    by the tribe or the BIA.
        In fiscal year 1998, TPA will comprise nearly half of the
    BIA operating budget. The TPA activity is funded at $757
    million, an increase of $76.5 million over the fiscal year 1997
    enacted level, to help tribes address the unmet needs in basic
    programs. Shortfalls in these programs have become particularly
    serious with the reductions in this activity since 1995.
        In fiscal year 1998, the BIA will continue to operate as a
    highly streamlined and decentralized agency, with maximum
    resources going to tribal programs. The BIA has identified $3.4
    million that will be transferred to TPA programs in fiscal year
    1998. The BIA anticipates that about half of the fiscal year
    1998 operating budget will be spent directly by tribes which
    elect to operate various Bureau programs under self-
    determination contracts, grants, or self-governance compacts.
    Self-governance compacts, which give tribes greater flexibility
    to administer BIA programs, now number 60 and are expected to
    rise to more than 70 in 1998.
        Congress continues to fund specific Indian Education
    programs in response to treaty requirements and federal
    statutes. Current Indian Education programs are governed by a
    number of laws, including the Snyder Act, the Johnson O'Malley
    Act, the Elementary and Secondary Education Act, the Tribally
    Controlled Community Colleges Assistance Act, the Tribally
    Controlled Schools Act; the Education Amendments of 1978; the
    Hawkins Stafford Act; and most recently, Goals 2000 and the
    Improving America's Schools Act. Collectively, these laws are
    aimed at ensuring quality education of Indian youth and
    improving the long-term employment and economic opportunities
    on reservations.
        The fiscal year 1998 budget includes a significant
    investment in Indian education. The request for School
    Operations, which will fund schools and dormitories serving an
    estimated 52,400 elementary and secondary students in 23
    States, is $467 million, an increase of $16.8 million over
    fiscal year 1997. The increase is needed to ensure that schools
    can deliver quality education, maintain accreditation, and
    provide safe and adequate transportation for an estimated 3
    percent annual increase in enrollment. The BIA anticipates that
    between School Years 1996-97 and 1998-99, the student
    population will increase by more than 3,000.
        The budget provides an additional $3 million for operating
    grants to the 24 tribally controlled community colleges, which
    have been successful in providing college-age and adults with
    college degrees and eventual professional employment. It is
    also anticipated that this increase will support Tribal
    Community Colleges as they provide job training, continuing
    education and GED's to those seeking employment due to Public
    Law 104-193, the Personal Responsibility and Work Opportunity
    Reconciliation Act of 1996 (Welfare Reform).
        The budget includes trust investments crucial to saving
    additional costs in the out years. The BIA environmental
    management program is increased by $3 million to begin to
    address the backlog of environmental cleanup work, which is
    estimated at approximately $200 million. An additional $1.5
    million is needed for water rights studies and negotiation, as
    successful negotiations are always less costly than litigated
    claims. An additional $3.4 million is requested to address the
    backlogs in adjudication and certification of title and
    ownership to Indian lands. Until the backlog is eliminated,
    trust income cannot readily provide an accurate and timely
    reflection of account holders' land interests and related
    revenues.

                                  construction

        The request for the BIA Construction appropriation is
    $125.1 million, with over one-third for Education Construction.
    In the last 2 years, the BIA has made progress in eliminating
    the unobligated balance in Construction facilities projects,
    mainly due to an increasing emphasis on tribal contracting for
    projects. The unobligated balance at the end of 1996 was the
    lowest in 5 years.
        The Replacement School Construction program funds the
    replacement of older, unsafe, and dilapidated schools on
    reservations according to a Congressionally approved priority
    list, which is currently limited to 16 schools. In fiscal year
    1998, $14 million is requested to construct the Many Farms High
    School in Arizona, the fourth school on the Priority List. The
    main facility was demolished due to structural building
    failure; therefore, the 400 children at Many Farms are
    attending school in portable trailers that are more than 17
    years old and have now deteriorated to the point where
    children's safety could be at risk. The Education Facilities
    Improvement and Repair Program is funded at $32 million and
    includes an increase of $8 million to continue to address the
    $682 million backlog of repair work in existing education
    facilities.
        The budget also requests $16.5 million, an increase of $12
    million above the fiscal year 1997 level, for Public Safety and
    Justice construction. This activity funds detention centers on
    reservations and fire protection safeguards in schools and
    other facilities. Tribes cite law enforcement as a top
    priority; without adequate reservation detention facilities,
    offenders are prematurely released into the community. An
    increase of $2 million is requested for facility improvement
    and repair of existing detention facilities. The budget also
    includes $9.1 million for replacement of the Ute Mountain Ute
    Detention Facility in Colorado and $1 million to complete the
    design of the facility to replace the Salt River Detention
    Center in Arizona. Inmates of the current Ute facility are
    housed in a building so overcrowded that the health and safety
    of the inmates are a serious concern. A recent consent decree
    requires the BIA to immediately address the overcrowded
    conditions at the Ute facility.
        The budget includes $22 million, an increase of $4 million
    over fiscal year 1997, for the correction of structural
    deficiencies of high hazard dams on Indian lands. The backlog
    of repairs to hazardous dams currently exceeds $400 million. In
    fiscal year 1998, the BIA will begin correction of high risk
    problems on dams in Wyoming, New Mexico, and Montana.

       indian land and water claim settlements and miscellaneous payments

        The program provides payments to meet Federal requirements
    for legislated settlements. The fiscal year 1998 budget request
    includes $59.4 million for payments for settlements resolving
    long standing tribal claims to water and lands. A large portion
    of the fiscal year 1998 request is dedicated to the Ute Indian
    Rights Settlement, in order to move closer to the funding
    schedule set forth in the settlement.

               tribal shares and the national performance review

        The centerpiece of the National Performance Review
    Reinventing Government Phase II in the BIA is the tribal shares
    process. Along with the negotiated rulemaking process for self-
    governance compacts and self-determination contracts, the
    tribal shares process is the mechanism that the BIA is using to
    accelerate the transfer of program operations to tribes and,
    ultimately, to downsize and restructure the BIA. The tribal
    shares process builds on the Administration's commitment to the
    policy of self-determination and local decisionmaking.
        The first attempt to implement tribal shares was completed
    by a BIA team in February 1996. However, the process was
    delayed because consultation meetings with tribes revealed that
    tribes wanted full tribal participation in reviewing and
    determining inherently federal functions and their costs. The
    tribes feared that additional dollars identified for tribal
    shares would again be taken by the Congress for budget
    reductions as had occurred in fiscal year 1996. Tribes were
    also disappointed by the relatively small amount of funding
    being made available for tribal shares which offered little
    financial incentive to choose to contract/compact BIA programs.
    Some small tribes were also concerned about the diminishing
    amount of resources available to provide for tribes which did
    not contract services from the BIA.
        Since September 1996 the Deputy Commissioner authorized and
    directed the election of 24 tribal representatives, two from
    each of the 12 areas, to serve as members of a tribal workgroup
    to establish a mutually agreeable tribal shares determination
    process in partnership with the Bureau. The joint federal/
    tribal workgroup recently met and achieved consensus on their
    plan to publish a list of inherently federal functions in the
    Federal Register by May 1, 1997. During the 90-day comment
    period, May 1-August 1, 1997, three regional tribal
    consultation meetings will be scheduled to obtain feedback and
    explain the list of functions. A revised list of inherently
    federal functions will be published as final in September 1997.
    The next phase of the tribal shares process is the
    identification of the costs associated with performance of the
    inherently federal functions, as well as the costs associated
    with functions available for contracting. The projected
    completion date is May 1998.

                     government performance and results act

        As required by the Government Performance and Results Act
    (GPRA) of 1993 (Public Law 103-62), the BIA intends to submit a
    final strategic plan to the Congress by the end of fiscal year
    1997. Based on a multitude of statutes, court rulings and
    treaty obligations, the plan will define the Bureau's long-term
    mission, broad goals and objectives. The program goals and
    objectives reflected within the budget justifications support
    these broad goals. In fiscal year 1998, the BIA will complete
    the fiscal year 1999 annual performance plan which will expand
    upon these programs goals by adding performance measures. These
    performance measures will help indicate the BIA's progress in
    meeting its mission as set forth in the strategic plan.
        The BIA has made progress in implementing a GPRA pilot
    project for forestry and ecosystem restoration in the Pacific
    Northwest. The project's strategy included tribal participation
    in prioritizing projects which has resulted in a noticeable
    improvement in the tribe's satisfaction with funding
    distribution. The BIA is continuing to refine its methodology
    of collecting accurate data to measure overall project
    performance.

                                   conclusion

        The funds requested in the President's fiscal year 1998
    budget are critical to the health and well-being of tribal
    communities, tribal governments, and the tribal resource base.
    This funding will allow the Government as trustee to fulfill
    trust obligations and reduce the liability for failure to meet
    legally defined trust obligations.
        This concludes my opening comments. My staff and I would be
    happy to respond to your questions.

                     sources of money for tribal government

        Senator Gorton. Thank you, and let me say before I begin my
    questions that, at least for myself, I am quite favorably
    impressed with the changes that you have made, not only in your
    administration, but with respect to tribal shares, over the
    period of your time here. You have a right to be proud of a
    great deal of what you have done, because much of it is not
    just purely administrative, but based on a set of theories.
        I would like you to go over once again those sets of
    figures of the sources of money for tribal governments and
    exactly what services it is that they cover. Would you read
    that for me?
        Ms. Deer. Level of tribal investment in various tribal
    government operations?
        Senator Gorton. Yes, yes.
        Ms. Deer. In comparison to the Federal contribution?
        Senator Gorton. Yes; that is what I am after.
        Ms. Deer [reading]:

        While there are some differences between the accounting
    methodologies used by Federal and tribal governments
    respectively, we were able to produce a reasonably reliable
    snapshot based on information in the single audit reports filed
    by the tribal governments. We reviewed the expenditures
    documented by 192 tribes in these reports. The total came to
    $1.3 billion.
        You may be surprised to learn that 45 percent of the total,
    or $593 million, came from the tribes' unrestricted general
    fund. The Department of the Interior contributed slightly less
    than 25 percent, or $324 million. The remaining 30 percent, or
    $399 million, came from other Federal and State sources.

        Senator Gorton. OK, that is what I would like to pursue.
    Those figures relate to the moneys expended by tribal
    governments on their governmental activities, am I correct in
    that understanding?
        Mr. McDivitt. Yes; that is correct.
        Senator Gorton. That does not include their expenditures on
    other activities, even though some of them may have been funded
    by the BIA? Or does that include all the distributions of
    moneys from the BIA to the tribes?
        Ms. Richardson. Mr. Chairman, it includes all expenditures
    from the BIA and Federal agencies to the tribes, the general
    fund expenditures of tribes' unrestricted funds. Then tribes
    have a special revenue fund and in the special revenue fund all
    of the Federal funds are accounted for, and State funds as
    well.
        Senator Gorton. Now, how, Ms. Deer--or any of your staff
    can answer this question if they wish--how do you determine at
    this point how much each tribe receives out of that fund?
        Ms. Manuel. Out of the special revenue fund or the general
    fund?
        Senator Gorton. The general fund.
        Ms. Manuel. We do not have any control over the general
    fund. These are typically funds that are generated from tribal
    enterprises.

                            tribal fund distribution

        Senator Gorton. No; I do not mean what the tribes are
    spending. I mean how do you determine--I have got the wrong
    question. How do you determine, of the money that we
    appropriate to BIA and that you distribute to the tribes, how
    do you determine how much each tribe gets?
        Ms. Manuel. Historically, the funding that has been
    allocated to tribes has been based on an old system that the
    Department and the Bureau had in place for several years called
    the Indian priority system, where the tribes in each location
    and each area establish what they felt was their need for
    funding on the basis of population, land base, forestry
    dollars. They looked at the number of forestry acres.
        There was a process that actually was followed which to
    this day when we look at funding for new tribes we take the
    same factors into consideration.
        So the funding was established years ago and it has been
    pretty constant. Tribes pretty much know what their base
    funding has been for the past several years.
        Senator Gorton. And is it affected at all by your
    individual agreements with individual tribes on tribal shares?
    Do those agreements guarantee a certain share?
        Ms. Manuel. They should not, but we are finding in some
    locations where, especially where you have multitribe agency
    situations where the tribes all share an agency and one of the
    tribes or two of the tribes may want their shares, there is a
    process that the superintendent and the area director have to
    undertake to ensure that, if they provide a share to the
    requesting tribe and it is a share of a program or an activity
    that is funded to benefit all the tribes in that agency, if
    they take their share there has to be a determination that the
    reduction in funding and resources will not impact or harm the
    remaining tribes who do not take their shares.
        Senator Gorton. Now, in making these determinations do you
    take into consideration the relative prosperity or poverty of
    the individual tribes, the income that the tribes are receiving
    from other sources?
        Ms. Manuel. No.
        Senator Gorton. You do not?
        Ms. Manuel. Not in determination of tribal shares. It is
    based strictly on what has traditionally been available to that
    tribe through the budget formulation process.
        Senator Gorton. Well, that leads me to a policy question
    for Ms. Deer. Through my State news clippings the other day I
    learned of a story about the Colville Tribe in north-central
    Washington. The thrust of the story is that the members of the
    tribes were going to meet on the following Saturday to
    determine how to distribute $10 million in gambling profits.
        They had four proposals that were going to be before them,
    I think all of which included distributions--or most of which
    included per capita distributions to the members.
        Is it appropriate, Ms. Deer, for us to consider the profits
    that tribes are making from gambling over and above the
    salaries they pay, in determining how much money the taxpayers
    of the United States should distribute to those tribes for
    their annual governmental activities? Should the tribes be
    required to put some of those profits into activities that
    demonstrate a degree of self-sufficiency in the case of those
    tribes that have gambling enterprises that make profits?
        Ms. Deer. As you know, Senator, the tribes must spend
    money, according to the Indian Gaming Regulatory Act, for
    tribal economic development, for improving the tribal welfare,
    for improving the quality of life on their reservations. They
    make contributions also to other governmental, and charitable
    purposes.
        I have not seen that particular article you are referring
    to, but the tribe must submit and receive permission to
    dispense these per capita payments.
        Senator Gorton. I am sorry? Must receive permission to do
    what from whom?
        Ms. Deer. There has to be a request made by the tribe. They
    must receive permission from the Secretary.
        Senator Gorton. In other words, from you.
        Ms. Deer. Well, it is just not me, but it is the whole
    process, yes, in order for the per capita payments to be
    distributed.
        I would point out that the States also have lotteries and
    that there is no, at this point as far as I know, no tie-in for
    dispersal of Federal funds in relation to the State lotteries.
    The tribes are opposed to that type of testing. The Bureau does
    administer some eligibility criteria in some of their programs,
    such as housing improvement and higher educational services and
    general assistance.
        So I think from your point of view it is a question that
    has arisen and would require some additional study and
    discussion in my opinion.
        Senator Gorton. Well, I have here the statute and one of
    the purposes for the use of those revenues, to quote from the
    statute, is to ``fund tribal government operations and
    programs.''
        Ms. Deer. That is true.
        Senator Gorton. Now, my question is whether or not your
    formula for distribution for government operations programs
    should not reflect those profits, so that more of your
    distributions would go to tribes that are isolated and do not
    have this form of income and less should go to those tribes
    that do have that, the ability to fund at least some of their
    governmental operations through gambling revenues.
        The answer was that you have got a formula that is an
    ancient formula, that has hardly ever changed. Should it not
    change in the light of these, these relatively new sources of
    income?
        Ms. Manuel. I think the IGRA does provide that opportunity,
    because if you look at the statute it does require that the
    Secretary be satisfied that the tribe--before we approve a
    revenuesharing per capita plan, we have to make a determination
    that in fact the tribe is spending--and we have established
    that to be at least one-half or 50 percent of whatever the
    gaming revenue is, for the purposes that are authorized in the
    statute, before they can distribute it as per capita.
        And I would certainly encourage my area directors to look
    at situations where, if there is a shortfall in tribal
    government funding and clearly the tribe has revenue from
    gaming that could offset that and they are not looking at
    spending it for offsetting their shortfall, we would have to
    take a real hard look at their per capita plan before it is
    approved.
        Senator Gorton. So that the last alternative I see here in
    this clipping, which says $8 million for per capital
    distribution and $2 million for government activities, would be
    unlikely to be approved?
        Ms. Manuel. That is right, that is right.
        Senator Gorton. We now have Senator Domenici here. Since I
    have a whole long lists of questions and I know that Senator
    Domenici is responsible for the whole budget, I am going to
    defer to him for any statement he has and any questions that he
    has.
        Senator Domenici. Sir, I would prefer that you go on maybe
    15 minutes.
        Senator Gorton. All right. Well, you tell me whenever it is
    that you would like to ask questions.
        Senator Domenici. May I just comment, however, on the one
    issue you have raised with reference to Indian profits from
    gaming. The one thing that is of concern to me in any effort to
    do a new formula is that we clearly should understand the great
    disparity, even among casinos and gambling profits.
        My State has been in a state of turmoil, as you know, as to
    whether or not our Indian casinos are legal or illegal. It has
    nothing to do with us. It has to do with State law. After many
    months of wrangling, they are going to make them legal.
        We have some that make very little money, some that make a
    lot of money, and I think it is all going to change.
        Senator Gorton. And some that are so isolated that they
    cannot do it at all.
        Senator Domenici. What bothers me is, if you get into a
    formula where you then have all those who do not have casino
    profits that are getting a certain amount, and then all of a
    sudden the gaming falls off and then you have got to change the
    amount they are getting. I think before we do anything like
    that we ought to be very careful to understand it.
        I also truly believe that, from the standpoint of Indian
    economic development, unless there is some big social damage
    occurring, gaming is a source of funding. People take one side
    or the other of that with reference to gambling all the time.
    It does seem to me, however, that Indian people have hit upon
    something that does give them an opportunity to raise their
    standards of living and to do some very exciting things for
    their people.
        Whatever one reads about the very, very wealthy, those who
    are making millions and millions of dollars, it is a lot
    different than my State. A lot of my casinos in New Mexico--
    casinos in New Mexico; I should not say mine. I do not have
    anything to do with it. [Laughter.]
        Sometimes I refer to New Mexico that way, but I should stop
    that.
        In any event, a lot of gaming revenue is going for
    improvements. It is rather interesting. A couple of Pueblos
    have built some very exciting facilities for their people. They
    are very positive projects. I have not visited every one, but I
    have visited enough to say that there are some very
    responsible, in anybody's sense, uses of these funds for the
    Indian people.
        I think we need a little time to see how that works in
    States like mine, as compared with perhaps a few that have the
    biggest casinos in the world. I guess there is one up there on
    the east coast. So they are very different. I think the
    question is a legitimate one, but clearly I still believe it is
    a little premature to decide how to change gaming. I guess I
    would resist your efforts if you move that way this year.

                                 tribal shares

        Senator Gorton. Ms. Deer, on this subject of tribal shares
    agreements and decentralization and greater authority on the
    part of the individual tribes, how far have you proceeded? How
    many tribes now have such agreements?
        Ms. Deer. Are you talking about tribal shares?
        Senator Gorton. Yes.
        Ms. Deer. That whole process has not been completed yet.
    Ms. Manuel, can you explain a little more about that? There
    have been many, many meetings on this.
        Ms. Manuel. We do not have any tribes that are taking their
    shares under the authority of title I of Public Law 93-638,
    which is the contracting self-determination part. We do have,
    as you know, about I believe 60 tribes that take their shares
    under self-governance. In other words, they have negotiated
    self-governance compacts and are now in the self-governance
    program.
        As I reported, I believe a year ago, we were looking at
    having completed the tribal shares process, where we have
    clearly identified inherently governmental functions or
    inherently Federal functions, identified the contractable,
    compactable activities and functions in a very detailed manner.
    That process has been further delayed by actually the tribes
    themselves.
        I established a work group in July of last year to ask them
    to provide us assistance and to work with us in developing this
    final process to enable the tribes that had indicated at that
    time their desires to take their shares under the 638 title I
    section. They have spent--the tribal work group, which consists
    of two representatives from each of our 12 areas, tribal
    leaders, who sit on this work group, in turn established a
    smaller work group to work with Bureau staff in trying to come
    to some final closure on the tribal shares process.
        Last month in Albuquerque, the complete work group met,
    heard from the subwork group, and determined that they were
    still at least 2 years away from completing and coming to some
    final tribal shares process.
        What we are going to do, and in fact, I believe in May, we
    are taking to the Federal Register a notice to the public of a
    preliminary list of inherently Federal functions, what we,
    working through the tribal work group, have identified as
    inherently Federal or inherently governmental functions, that
    will be published for public comment.
        Senator Gorton. So you do not need any further authority,
    then? Only 60 tribes take their shares, and you have got a
    process that is going to take another couple of years. I think
    in each of the last 2 years we have expanded the number of
    tribes.
        Ms. Manuel. I do not believe we have.
        Senator Gorton. You do not need any additional authority in
    that connection?
        Ms. Manuel. No; I think the authority we have now under
    title IV is sufficient. We expect that we will probably have at
    least 10 more tribes. The 60 compacts do represent 200-plus
    tribes.
        Senator Gorton. That is right, OK. But you have enough
    authority?
        Ms. Manuel. Yes; that is right.
        Senator Gorton. You are not going to need any more from us
    this year?
        Ms. Manuel. That is right, no.
        Senator Gorton. Now, you have already anticipated my next
    question, something that Ms. Deer referred to. What is an
    inherently Federal function? Is it a short enough list so you
    can tell me right here what you are going to publish among
    those functions that you think are essentially Federal?
        Ms. Manuel. No; it is not short enough. That is why we want
    to publish the list, because I am sure there are probably
    functions or activities that we did not think of and the public
    will have the opportunity to come and let us know. And even the
    definition has created some great debate and discussion within
    the tribal work group, within the Federal work group, and I
    believe even the solicitor's opinion has not been that specific
    or clear, and in fact has referred us to a number of
    governmental publications out of OMB that define how you look
    at and determine what is inherently Federal.
        But simply, the easiest response is it is those functions
    which by statute or even judicial opinion can be performed only
    by a Federal official and cannot be delegated to anyone other
    than a Federal official.
        Senator Gorton. So you do see a permanent and significant
    Bureau of Indian Affairs?
        Ms. Manuel. Yes.
        Senator Gorton. You do not see the end of this process
    being one in which there is a set of formulas or block grants
    pursuant to which aid goes directly from the Congress to each
    individual tribe and each individual tribe makes all of its own
    decisions? That is not the end process?
        Ms. Manuel. No; in fact, as you know, Indian tribes and
    Indian affairs is the most regulated business in the Federal
    Government. There are just hundreds and hundreds of statutes
    that impose some statutory requirement on the Secretary.
        Senator Gorton. Sure, but those statutes could be repealed.
        Ms. Manuel. Most are based either in treaty or have some
    historical foundation that is based in the political
    relationship between tribes and the United States.
        Senator Gorton. So you do not see any time in the future in
    which either the bill that Senator McCain had last year from
    the Indian Affairs Committee or a simple block grant proposal
    that we had briefly in this bill last year would be
    appropriate? The administration is not going to recommend any
    fundamental statutory changes in the relationships between the
    Federal Government and the tribes?
        Ms. Manuel. I think there will be fundamental changes in
    how the Bureau conducts business as tribes become more
    sophisticated and progressive and take on the noninherently
    Federal activities and functions. You are going to see, I
    think, a much more streamlined organization that I think will
    be comprised of purely professional technical skills and
    abilities that are going to be there to provide technical
    assistance to tribes.
        You are not going to see the Bureau of Indian Affairs of 10
    years ago, where you had 15, 16,000 employees and the Bureau
    did pretty much everything for tribes. They ran the courts,
    they ran the police, they ran the social services program. I
    think you are not going to see that kind of an organization.
        Senator Gorton. I have just been informed that Senator
    McCain is reintroducing his bill today. Assuming that it is the
    same bill as it was 2 years ago, will the attitude of the
    Secretary and the Bureau be identical to what it was a year
    ago?
        Ms. Manuel. From the Bureau's perspective, the concept of
    developing a Bureau with the active participation of the tribes
    is something that we believe in and we are doing for the tribal
    shares process. The only aspect of the bill that concerned me
    was the many layering of consultations and compacts that were
    required, and if the bill is identical I would have great
    problems supporting it.
        Ms. Deer. Mr. Chair.
        Senator Gorton. Yes?
        Ms. Deer. I would like to mention that at the meeting of
    the tribes, the President and the Cabinet on April 29, 1994,
    the President did reaffirm the government-to-government
    relationship between the Federal Government and the tribes. So
    I think that that outlines the basic thrust of the
    administration toward the tribes to reaffirm the government-to-
    government relationship.
        Senator Gorton. But you are not going to propose a
    statutory change like Senator McCain's? We are going to get
    nothing from you with respect to fundamental statutory change?
        Ms. Deer. I doubt it.
        Senator Gorton. OK.
        Senator Domenici.
        Senator Domenici. Yes.
        Senator Gorton. I have finished my questions on this
    subject matter area, so if you have some.
        Senator Domenici. I thank you. Thank you very much, Mr.
    Chairman.

                              education facilities

        I want to talk just for 1 minute and also share with you a
    concern. You know, in America we all say the gateway to the
    future is in education, and that opportunity is closely linked.
    Frankly, one of the biggest shortcomings that we are foisting
    on young Indian people is the inferiority of the Bureau of
    Indian Affairs school system that they run for the young Indian
    people. Not all of them, I understand.
        First I have four or five questions, just to make my case,
    of individual schools run by the BIA where I have had to
    intervene, or a school is left half built, or dormitories that
    are patently necessary way out in Navajo country are not built,
    so the school does not work.
        Now, it seems to me that there is an awful lot of money
    being spent sort of running in place and making legal decisions
    and determining the nuances of relationships, while in Indian
    country among the Indian people the education plant is falling
    apart. Now, is anybody here capable of telling us the current
    evaluation of what is needed to bring just physical plants--do
    not worry about whether we get enough teachers--just to bring
    them up to standards that others are living under in the United
    States? How much is that?
        Is my recollection of $700 million for dilapidated
    buildings and inferior, second-rate schools and dormitories,
    correct? Is that a fair number?
        What is your name, sir?
        Mr. Schweigert. Jerry Schweigert. I am the Director, Acting
    Director, of the old Office of Construction Management. Now we
    are the facilities transition program staff.
        Yes, we did, for the 1998 budget, we ran a new inventory or
    updated our inventory, and we found that to bring all of our
    facilities up the standards, codes and standards, it would cost
    approximately $890 million.
        Senator Domenici. So close to $1 billion?
        Mr. Schweigert. That is correct, sir.
        Senator Domenici. I have heard a couple of Senators who had
    a chance to go out and visit Indian schools on their
    reservations. Maybe you have, too, Mr. Chairman. I am talking
    about the dilapidated condition of a school and just its total
    inferiority. I heard one Dakota Senator speak about that. I was
    wondering whether anybody could get educated in that kind of
    facility.
        This issue causes me a great deal of concern. I will say, I
    am not terribly impressed with the President's budget, asking
    for $5 billion for here and there new construction of schools
    around the country, when the one school system that, for better
    or for worse, that we are responsible for does not even have
    adequate buildings to educate young Indian people. I do not
    think you have got a budget to take care of anything like that.
        We are not even making any headway on the priority list on
    education. It is longer rather than shorter each year that you
    fulfill the top five or six requests. Is that a fair
    assessment?
        Mr. Schweigert. Well, as the buildings age, currently we
    have 63 percent of our buildings that are over 30 years of age
    and 26 percent that are over 50 years of age. Normally we
    design the life of a building around 30 years. So our buildings
    are basically aging and 80 percent of them are education
    related. So as our buildings age, they escalate in
    deterioration. So the older they get, the faster they
    deteriorate.
        Senator Gorton. Excuse me. Can I interrupt?
        Senator Domenici. Of course.
        Senator Gorton. Does that 30 year rule and 30 year and 50
    year percentages represent a different set of standards from
    public schools in most of the 50 States? Aren't a majority of
    all of our schools over 30 years old?
        Mr. Schweigert. Normally our facilities are designed and
    built along the same codes and standards as public schools are.
        Senator Domenici. That was not his question.
        Senator Gorton. That really was not my question. Are not
    most public schools more than 30 years old?
        Mr. Schweigert. I have no idea, sir, on that.
        Senator Domenici. I think for a number of reasons that is a
    relevant question. You might want to plug that in and see if
    somebody in the Department of Education knows. I will bet they
    do. I think that does give us another set of facts that we
    would want to explore.
        Nonetheless, the kids, they are the ones at the bottom of
    this that have to get helped. They are not getting the right
    education. So we have got to work on that issue.
        I have two or three education issues that I want to raise,
    as I indicated. I do not like to do this and I wish the system
    was running so we would not be up here doing this, so I would
    not be in a subcommittee saying fund this particular school
    even though it is not on the priority list because we ought not
    be running a school system as broad as that in my opinion. I
    think you agree with that, Mr. Chairman.
        Senator Gorton. I certainly do.
        Senator Domenici. I am going to just tick them off for you,
    and I would appreciate an answer for the record from whomever
    is qualified. Santa Clara Day School, this remains two-thirds
    completed. Last month I raised the issue with you, Madam
    Secretary, and I pointed out that the school was a monument to
    the incompetence--and I say this very, very forthrightly--to
    the incompetence of the Bureau of Indian Affairs and its
    monumental bureaucracy.
        Somehow or another, somebody has been able to identify
    $300,000. Apparently it needs $900,000 to get finished, and I
    would ask you to explain for the record what the situation is.
        [The information follows:]
                             Santa Clara Day School
        A Public Law 93-638 contract was awarded to the Pueblo of Santa
    Clara on December 19, 1991, in the amount of $1,312,041. The funds were
    authorized for the renovation and expansion of the existing day school
    serving grades Kindergarten through 6th grade.
        Additional funds for phase 2 were requested by the Bureau and were
    received in the fiscal year 1995 appropriations to complete the
    project. Subsequent contract modifications including phase 2 funding
    resulted in a revised contract award amount of $3,416,123. The phase 2
    funding was requested from Congress based on the Tribe's Architect's
    estimate of what it would cost to complete all work on the project.
    However, when the Tribe awarded the construction subcontract in
    November 1995, the total combined appropriation was insufficient to
    complete all of the work in the project. The Tribe awarded the
    subcontract at an amount which exceeded the Architect's estimate by
    $643,064 or 23 percent. The Tribe has been pursuing additional funds
    estimated at $1.2 million to complete the renovation project.
        The fiscal year 1997 Senate Report contained the following
    direction: ``The Committee urges the BIA to continue its efforts to
    settle the dispute over funding for the facilities improvement and
    repair at the Santa Clara Day School.''
        Working with the Tribe's planning administrator, FMCC provided an
    additional $315,000 on March 4, 1997, based on items of work that were
    felt to be absolutely necessary and were related to safety and health
    conditions. In addition, in a letter dated March 3, 1997, from the
    Director, FMCC 997 letter to the Tribe, the Tribe was requested to
    provide additional information so that a final decision on additional
    funding could be made by FMCC. The information requested has not been
    received as of May 19, 1997. The tribe has requested additional items
    of work that were outside Congressional authorization and are not
    safety and health related.
        The construction appropriation does not have funds to cover these
    costs in today's environment of constrained budgets. The major item in
    the Tribe's request is a new gymnasium. The Tribe has a community
    center, with gym, across the street from the school which the school
    has been using for physical education. Although unobligated balances
    exist in the Facilities Improvement and Repair Program, funds are
    already committed to specific projects which were justified in prior
    budget requests.
        In addition to the $315,000 indicated above, FMCC will make
    available to the Tribe, at no cost, new surplus equipment and
    furnishings from completed school construction projects. We have made
    the offer to the Tribe and the Tribe is working with FMCC staff to
    determine if what we have available will meet the needs of the school.
    Conclusion
        FMCC could potentially provide an additional amount up to $185,000
    without seeking reprogramming authority from Congress and without
    impacting other funded projects, but does not have the remaining
    $700,000 for non-health and safety requirements.

                           mescalero apache proposal

        Senator Domenici. I have another. Again, I do not know why
    I should have to do these, but one of the tribes in New Mexico
    that ranks high in good management is the Mescalero Apaches,
    Wendell Chino's tribe. I think when they have a good idea you
    ought to give it serious thought. They want to put a manager in
    to manage all the programs of the Bureau that apply to them.
    They have had great success whenever they have had management
    in their various industries and businesses. I urge you to
    consider that request, and I am submitting for the record for
    you to review a letter with attached documents from Wendell
    Chino indicating why they think this is a good idea. Would you
    take a look at that, please?
        [The information follows:]

                           Mescalero Apache Proposal

        The Tribe proposes to contract for the Superintendent's
    position without assuming responsibility for all agency
    positions and responsibilities. This would create a situation
    where federal employees were being supervised by a person other
    than a federal employee and would violate federal personnel
    laws.
        The Superintendent provides direct service to the Tribe
    and, in addition, supervises federal employees, has other
    federal responsibilities and reports to the Albuquerque Area
    Director. Consequently, if contracting were to occur based on
    the Tribe's current proposal, in order to comply with federal
    law, it would be necessary for the Bureau to retain federal
    supervision over federal employees by withholding the
    supervisory portion of the Superintendent's responsibilities
    from the contract, and placing that function with another
    federal employee.
                                    ------

                           Letter From Wendell Chino
                                        Mescalero Apache Tribe,
                                          Mescalero, NM, April 9, 1997.
    Hon. Pete V. Domenici,
    U.S. Senate,
    Washington, DC.
        Dear Senator Domenici: Mescalero Apache Tribe is in the process of
    attempting to contract the Superintendent's position at Mescalero
    Indian Agency. In place of the superintendent we want to hire a manager
    so we can breathe new life and innovation into the agency with a
    manager.
        For years as you know, we have utilized several managerial
    positions with our Tribal enterprises and they have proven highly
    successful. We believe it is time we applied the same concept and
    principle with just one position under contract at Mescalero. All of
    the trust obligations and responsibilities remain with the Bureau of
    Indian Affairs through the remaining positions and branches at the
    Mescalero Indian Agency.
        Enclosed is a position paper we developed regarding the proposed
    agency manager. We are enclosing a copy of the pertinent code of
    Federal Regulations which allows for a contract of all or part of the
    Bureau Programs in Mescalero.
        We trust that you will support our efforts to contract the
    position. In addition we hope you will convey to the Secretary of
    Interior about our new concept that can make the Bureau of Indian
    Affairs highly successful on an Indian reservation.
                Very truly yours,
                                              Wendell Chino, President.
                                     ______

                                 Agency Manager

                                 scope of work

        The scope of this contract will establish a managerial
    position between the Mescalero Apache Tribe and the Bureau of
    Indian Affairs. This position will manage the work force of the
    Mescalero Apache Agency and will be responsible for its day to
    day operation.
        The Agency Manager will coordinate all activities which
    contribute to the accomplishment of the Bureau of Indian
    Affairs mission statement. Much of this will be accomplished by
    the management of the Agency Branch chiefs as they carry out
    the trust responsibility of the Federal Government.

                            the agency manager will

        Maintain an Official relationship between the Federal
    government and the Tribe, providing programs and services in
    this capacity develops and fosters a positive relationship
    between the Tribe and the Bureau which supports a co-equal
    partnership arrangement in carrying out all governmental Trust
    and program responsibilities of the Bureau to the Tribe and its
    people.
        Responsible to the Tribe for the Trust and program work of
    the agency branch chief and the federal employees they
    supervise. The Agency Manager administers these programs and
    services in accordance with Federal Laws, regulations,
    policies, procedures, and guidelines and has the authority to
    use discretion concerning the uses of all government resources
    (dollars, manpower, facilities, supplies and materials);
    establishes internal policies, and controls all program and
    activities in a manner which will best benefit the Tribe and
    its people.
        Reviews the planning, organizing, coordinating, operating,
    evaluating, and controlling actions taken and recommendations
    submitted by immediate subordinates to assure compliance with
    technical, managerial and administrative requirements. Reviews
    justifications for resources such as personnel, funds,
    equipment or facilities; compares them with other requirements;
    and endorses, modifies, or rejects them as considered
    appropriate. Also, reviews a variety of progress reports,
    status records, comments of tribal and bureau and management
    officials and similar data to ensure that assigned functional
    objectives are being achieved.
        The Agency Manager is to justify, defend, negotiate or
    settle matters involving significant or controversial issues.
    This usually involves active participation in conferences,
    meetings, hearings, or presentations involving problems or
    issues of considerable consequences or importance. The
    manager's contacts usually have diverse viewpoints or
    objectives requiring the manager to achieve a common
    understanding of the problems and a satisfactory solution by
    convincing them, arriving at a compromise, or developing
    suitable alternatives.
        Based on knowledge and understanding of tribal goals,
    priorities, and needs determines the kinds and scope of
    programs and services to be provided by the Agency. Determines
    results to be achieved. Develops policies, rules, and
    procedures to carry out operations, organizes work into
    manageable units and allocated resources to each. Discusses
    proposed final plans with the Tribal President and make
    modifications as necessary.
        The Agency Manager is the official responsible for settling
    disputes, negotiating joint ventures and finding solutions to
    complex problems between the Tribe, Federal Agencies, State
    Government and private enterprises.
        The Agency Manager will direct the planning, organization
    staffing, and budgeting of the total Federal Government
    operation which provides a variety of programs and services;
    identify its goals, priorities, policy, guidelines and
    procedures; and determines, identifies, and procures the
    support necessary for implementation.
        The Agency Manager will be supervised by the Tribal
    President and receive advise, counsel, and analysis from the
    Area Director or his staff.
        The Agency Manager will have signature authority for all
    personnel actions, payroll, and leave.
        The Agency Manager will be responsible for the faithful and
    efficient discharge of the Federal Government's
    responsibilities to the Mescalero Apache People in accordance
    with established laws and approved policies, objectives, and
    standards, and for the protection and sound management for the
    extensive resources and funds held in trust by the United
    States Government for the Tribe as well as individual tribal
    members.
        The Agency Manager will supervise with the idea, of
    managing all functions through subordinate staff and allow the
    subordinate staff to have the latitude to manage their
    respective programs. This latitude will provide greater
    stability, span of control and confidence to supervisors giving
    them the ability to be more effective.
                                    ------

                         Subpart B--Application Process

    Sec. 271.11 ELIGIBLE APPLICANTS.

        Any tribal organization is eligible to apply for a contract
    or contracts with the Bureau to plan, conduct, and administer
    all or parts of Bureau programs under section 102 of the Act.
    However, before the Bureau can enter into a contract with a
    tribal organization. It must be requested to do so by the
    Indian tribe or tribes to be served by the contract in
    accordance with Sec. 271.18.

    Sec. 271.12 CONTRACTABLE BUREAU PROGRAMS.

        (a) Tribal organizations are entitled to contract with the
    Bureau to plan, conduct, and administer all or parts of any
    program which the Bureau is authorized to administer for the
    benefit of Indians. All or parts of any program include:
        (1) Any part of a Bureau program which is divisible from
    the remainder of the program so long as the contract does not
    significantly reduce benefits to Indians served by the
    noncontracted part(s) of the program. However, to the extent
    that it is within the Bureau's existing authority and the
    program or part thereof involves only one tribe and one Bureau
    Agency or Area Office, the benefits provided to Indians by the
    non-contracted part(s) of the program may be reduced at the
    request of the tribe. When the program or part thereof serves
    more than one tribe, the benefits provided by the non-
    contracted part(s) of the program may be reduced when all of
    the tribes served consent to a reduction.
        (2) A single employee position only when the functions to
    be performed provide a direct service to Indians and meets the
    criteria in paragraph (a) of this section.
        (3) Programs or parts of programs or services that are
    authorized but not currently operated or provided by the
    Bureau.
        (4) Operation of, or services provided by, previously
    private schools.
        (5) Alterations and repairs in direct support of a
    contracted program. Individual construction projects are not
    contracted under title I of the act, but can be contracted
    under other authorities.
        (6) Architect and engineer services.
        (b) Paragraph (a) of this section also applies to trust
    resources programs or portions thereof. Additional criteria for
    contractable trust resources programs, or portions thereof are
    given in Sec. 271.32.
        [40 FR 51286, Nov. 4, 1975, as amended at 43 FR 37440, Aug.
    23, 1978.]

                                   education

        Senator Domenici. I was in error. On the school that is
    two-thirds completed, you found $300,000 but the total needed
    is $1.2 million. So they are still $900,000 short.
        There is a very serious dormitory problem on the Navajo
    Nation. They have made a request with an inventory. I am very
    hopeful that you will take a look at that and give us your
    recommendations.
        I want to share another thought with the chairman. I do not
    know what to do about it, but we are in the process of taking
    an inventory of the Indian colleges and community colleges and
    post-high school institutions that we are in some way obligated
    to pay for, and it is absolutely amazing. On the one hand, we
    have some that we fund on par with what it costs to run a
    reasonably good, comparable non-Indian college. But we have
    these college institutions going up and some of the funding is,
    on just a rough analysis, $5,400 per student count is about
    average elsewhere, and we are funding them at $2,900.
        I do not know how anybody would expect to run a first class
    institution, unless the $5,400 is outrageous, and I do not
    imagine it is 100 percent outrageous. Maybe 30 or 20 percent,
    but not 100 percent. So I just share that here is another area
    where here we are encouraging our young Indian people to go to
    those schools, and they have got to be inferior by definition.

                               laguna industries

        I have one last issue, since you have invited me to take my
    turn and use your valuable time. I want to talk about the
    Laguna Industries in New Mexico. Are any of you aware of that?
    Do you know something about it?
        Ms. Manuel. Yes.
        Senator Domenici. Laguna Industries is one of the best
    success stories of an Indian group setting up a business,
    employing their own people, and doing some big time contracting
    with the U.S. Department of Defense. They are in the process of
    refinancing, and I would urge that you take a look at what is
    being recommended with reference to the refinancing package and
    seriously consider what might happen to that industry if the
    current financing is not continued in some way as you put a
    final package together.
        They have a huge backlog of jobs. Their management is back
    in shape. They employ over 500 Indian people in good jobs. I
    would very much like you to take a look at that situation. They
    have $40 million in backlog of contracts. I do not want to see
    somebody trying to make a point up here in the bureaucracy that
    they are smarter than the banks and that they know what is best
    when there is a market out there. I would hope you will take a
    look at this issue.
        Ms. Manuel. We have been working very closely with Laguna
    Industries and the bank. There is now a new bank involved.
    There were a lot of problems that we have worked through with
    the tribe and the management at Laguna Industries, and I think
    as of last week my understanding is that everyone was on board
    and we were going to be able to do what the tribe wanted.
        Senator Domenici. Well, I would hope then that you would
    take another look, will you, because I think it is not done.
    There is a proposal.
        Ms. Manuel. OK.

                                   education

        Senator Domenici. Mr. Chairman, I hate to bother you with
    these kind of questions when you have the whole budget of this
    committee to put together, but this is a big piece of it. I
    thank you for the time.
        Senator Gorton. Well, Senator Domenici, even on my own list
    of questions here, the next ones were all on education. If you
    want to stay around for that, I can follow up and supplement
    yours. And if the education gentleman wants to take a seat up
    here again, that would be appropriate.
        First let me just ask you a factual question. Of all of the
    Indians of school age who live on reservations, what share,
    what percentage, what number, attend Indian schools and what
    number attend the regular public schools of the States in which
    those reservations are located?
        Ms. Morris. I do not have the figures for the 23 States
    where schools are located. Nationally, Indian students comprise
    85 percent of the public schools, 10 percent of BIA schools,
    and about 5 percent are in church or Catholic, various
    denominational schools.
        Senator Gorton. Roughly, when we are speaking about this
    budget and this money we are speaking about schools for about
    10 percent of the Indians?
        Ms. Morris. Ten percent.
        Senator Gorton. Are those schools usually in relatively
    isolated places?
        Ms. Morris. Yes; consistently.
        Senator Gorton. I am curious. I had a very parochial
    question before you came, Mr. Chairman. Ms. Deer was talking
    about the magnificent Leschi High School in the State of
    Washington, which has recently been completed and which I
    visited and which is a wonderful facility. It certainly is not
    isolated. It is about 1 mile from the city limits of the city
    of Tacoma.
        How do you set your priorities with respect to construction
    funds in Indian schools? Have we done that for you? Have we
    just told you which ones you are going to do, as against
    letting BIA make that determination itself?
        Ms. Morris. Mr. Schweigert handles the construction money.
        Mr. Schweigert. We do set the priorities, Senator. Those
    schools were prioritized in fiscal year 1992-93, and then in
    1993 Congress basically froze the 16 that were on the Federal
    Register. The prioritization goes back to about 1979, when the
    Bureau worked out the process with Congress which basically
    determined that the highest ranking factor would be unhoused
    students. Those students at Chief Leschi were basically
    unhoused when their school was condemned.
        Senator Gorton. The previous school.
        Mr. Schweigert. So they competed, and in 1993 when we went
    through the process and only five schools were eventually put
    on the Federal Register, 66 schools actually applied and would
    have been eligible, but the criteria has weighting factors that
    were determinative.
        Senator Gorton. How many of those five schools or the
    earlier 16 are still on a priority list? Are some of them under
    construction? Would the others still be priorities?
        Mr. Schweigert. Well, we basically froze the 1992-93 list,
    and so far we have built seven schools, and Chief Leschi was
    the last. We have nine more schools to go and that includes
    Many Farms, which was in the 1997, is now in the 1998 list as
    well.
        Senator Gorton. Does this budget have enough money in it
    for the completion of that school?
        Mr. Schweigert. Many Farms, yes. We put $14 million in the
    1998 budget, yes.
        Senator Gorton. Senator Domenici, you came up with that
    figure of $890 million on the backlog of school facilities. My
    notes say that there is another $400 million backlogged on dam
    repairs and $2 billion for irrigation projects. And the whole
    budget request for facilities construction is less than $74
    million out of that $2 billion, which certainly supports the
    point you made earlier.
        In addition, assuming you get that $74 million, how much of
    the funds that have already been appropriated are still
    unobligated, for all kinds of construction projects?
        Mr. Schweigert. Well, for education we have a little over
    $100 million currently unobligated. Those are all earmarked for
    specific projects.
        Senator Gorton. All on that list of 16?
        Mr. Schweigert. No; Many Farms is the only one.
        Senator Gorton. The rest is for rehabilitation?
        Mr. Schweigert. FI&R, facilities improvement and repair
    projects that go back several years. And with 638 and self-
    determination regulations, we deal with the tribes and a great
    many of those projects are joint efforts between the tribes and
    the government, and it takes a while to get them designed and
    constructed.
        Senator Gorton. So would it be fair to say that with
    respect to the moneys that you have and are seeking now, the
    higher priority is for repair and rehabilitation than for new
    construction?
        Mr. Schweigert. Well, in the current budget, we have a much
    higher figure, $30 million-plus for facilities improvement and
    repair, versus $14 million for new construction, yes.
        Senator Gorton. And can I infer from your previous answer
    that, in addition to the money that we appropriate, that
    various tribes make contributions of their own to both
    construction and repair and rehabilitation projects?
        Mr. Schweigert. We have had several schools in Wisconsin
    that have built their own schools, but normally that is not the
    case.
        Senator Gorton. Either on construction or on improvement
    and repair?
        Mr. Schweigert. We supply the money for the schools,
    basically.
        Senator Gorton. How do you balance priorities? You have the
    frozen priority list for construction. How do you set up your
    priorities for repair and rehabilitation?
        Mr. Schweigert. We have an automated system. First of all,
    we have a backlog and our backlog is an amalgam of items that
    are comprised of codes and standards, national codes and
    standards such as the National Fire Code and so forth, and
    those are determined and put in a backlog by building. So we
    develop a program of requirements, the areas and agencies
    develop.
        On an annual basis they put their program of requirements
    in, and we have an automated system. We have an automated
    computer system that ranks all of these program of requirements
    that ultimately become projects, and it is a weighted average
    based on such things as the age of the students, the condition
    of the building, whether it is a fire code versus a structural,
    and things such as that.
        Senator Gorton. How much money have you actually spent on
    the repair and rehabilitation of Indian schools in the last
    year?
        Mr. Schweigert. Last year I think we spent $56 million.
        Senator Gorton. That's not much of a dent on the deferred
    maintenance, is it, or on the necessary repair and
    rehabilitation?
        Mr. Schweigert. Not if you consider that we have $890
    million, no.
        Senator Gorton. No.
        Ms. Deer, perhaps this is an inappropriate question for
    you, but do you have the slightest idea when the President is
    going to appoint a successor to you?
        Ms. Deer. Various names are in contention and so far no one
    has been officially announced.
        Senator Gorton. And have you agreed to stay on until your
    successor is nominated and confirmed?
        Ms. Deer. Confirmed, yes.
        Senator Gorton. So there will not be a vacancy.
        Ms. Deer. So we will have continuity, yes.
        Senator Gorton. My other subcommittee, Transportation, has
    the budget for Federal Aviation Administration and it is not as
    fortunate as the BIA. We have been waiting a long time for a
    successor to the leadership position.

                           law enforcement facilities

        Briefly, would you answer some of the same kinds of
    questions that you have answered now with respect to schools in
    connection with justice facilities: what your backlog is, what
    you are doing about the backlog, how you set priorities?
        Mr. Schweigert. Yes, I can, Senator. We have 34 justice
    facilities that we have responsibility for. We have
    approximately $112 million, $112 million it would take to do
    the repair or replacement of those facilities. Currently in our
    latest inventory we say that 13 of those facilities should be
    replaced.
        I do not have the exact figures in my head, but I think it
    was around $27 million. It was around $27 million to replace
    those facilities.
        Senator Gorton. My notes say that the budget has just over
    $2.5 million for existing public safety and justice facilities,
    so that would be about 10 percent of your backlog?
        Mr. Schweigert. Well, what we have is the 34 facilities,
    and we have 13 that we indicate--$34 million, my correction,
    $34.2 million that we should have replaced. The renovation of
    the 21 remaining facilities would be $22.7 million, and it
    would cost us approximately $5.7 million for planning and
    design.
        However, if we were to take those facilities and actually
    build them to the size that they should be, it would cost us
    approximately $112.7 million. So what I am using as the figures
    for replacement of the 13 is basically the same size as we
    currently have there that exist, not taking into consideration
    that they should be larger.
        So we do have a major--we did a major inventory of the law
    and order facilities here in the last 3 years.

                                 safety of dams

        Senator Gorton. Let me go on. I guess I am with you for the
    next several sets of questions. Dam safety. Let us move the
    microphone down there and talk to me about dam safety.
        My notes tell me here that your classification of dams with
    respect to safety has less to do with the risk that one of them
    is going to fail as it does with the consequences of a failure
    if it took place. How do you determine and how do you set
    priorities for the repair of dams in looking at the actual risk
    of a failure?
        Mr. Virden. We participate with the Department of the
    Interior in a technical rating of all dams. The Bureau of
    Indian Affairs has approximately 100 dams out of the 400 the
    Department of the Interior has. And you are correct, the
    technical priority rating is based on consequences of failure.
        Senator Gorton. Is there a separate determination of the
    actual risk of a failure? You know, the consequences can be
    overwhelming and the chances of failure 1 in 10,000, and
    consequences in another case, I suppose, considerably smaller,
    but the dam may be in imminent danger of collapse. Is there a
    separate rating system for the chances of a failure as against
    what the potential consequences might be?
        Mr. Virden. I have a staff person here I can check with,
    but I believe that the technical rating priority system does
    include that, the structural soundness.
        Senator Gorton. How do you set your priorities for this?
    You have got 104 dams. How many of them are actually at serious
    risk of failure right now?
        Mr. Virden. Ross Mooney is our dam safety person.
        Senator Gorton. OK.
        Mr. Mooney. Good afternoon. My name is Ross Mooney.
        Senator Gorton. It is still morning. It just seems long.
        Mr. Mooney. It seems like we have been here for a while.
    [Laughter.]
        I am the dam safety officer for the Bureau of Indian
    Affairs. As Terry said, we have about 100 dams in the Bureau of
    Indian Affairs that are rated as a high or significant hazard.
    The criteria by which we evaluate dams is set up by the Federal
    guideline, which all Federal agencies must use throughout the
    country.
        There are two different things you look at. First is, as
    you said, the impact of the dam regardless of what its
    condition is. If it did fail, what is its impact on life and
    property? There are three classifications--high, significant,
    and low. Low hazard means nobody will get killed and minimal or
    no property damage will occur.
        To be on the departmental technical priority ranking list,
    a dam must be a high or a significant hazard. These two ratings
    mean that life is in danger and significant property damage
    could occur. You can have a perfectly safe dam, but it will be
    a high or significant hazard dam because if it failed, what we
    call a sunny day failure, it could take life or damage
    property.
        Over on the other side, you have technical factors, about
    eight of them, that you go in and look at various criteria of
    the dam--the seepage, the structural integrity--various factors
    that are then evaluated, assigned a point value. The Department
    under Secretarial Order 3078 has assigned the Bureau of
    Reclamation with departmental oversight. As part of their
    oversight responsibilities they are the keepers of the TPR, the
    technical priority ranking list.
        This list is comprised, I think, of about 420 dams now. As
    Terry said, we have 100. Actually we are up to about 110. Since
    the Indian Dam Safety Act was passed in 1994, it refers to I
    believe 54 dams. We have doubled that since then. It is not
    that we have built any dams. it is just that we have gone out
    and reevaluated the dams that we do know about. And some of
    them, because we found people living downstream, we have had to
    reclassify to high or significant hazard.
        We do have an agreement with the Bureau of Reclamation, by
    the way, to have them go out and do some of the technical work
    for us, the evaluations, since they are the experts in this
    area for the Department of Interior, and that is why they have
    departmental oversight.
        Is that the information you needed?
        Senator Gorton. Well, what are you going to get done if you
    get your $22 million this year? What dams are you going to work
    on and how have you determined which ones are going to get that
    relatively modest amount of money?
        Mr. Mooney. Well, the Bureau of Indian Affairs uses the
    TPR's for setting its priorities, the list. I neglected to say,
    when you assign all these points to each of the dams and add
    them up and you rank them, the dam with the highest number of
    points is at the top and it goes down. The Bureau of Indian
    Affairs uses this list for funding purposes, and we fund the
    dam with the highest likelihood of failure.
        Senator Gorton. If we get the $22 million, will we get 1
    dam completely repaired or 10?
        Mr. Mooney. Historically, we got $18 million in the past.
    You want to know what we would do for the $4 million?
        Senator Gorton. Whether it is $18 or $22 million. You have
    got all of these dams on the list. How many dams will that
    actually repair?
        Mr. Mooney. We will be working on 12 dams. There will be
    three dams for which the final construction will be funded.
        In the safety of dams program it is a six-step process from
    the evaluation of the dam as a high or significant hazard dam,
    then you go in and look at the physical site of the dam, and
    then you do the conceptual designs, final designs, and then
    finally construction. So it is a six-step process which takes a
    couple years to get through.
        Senator Gorton. So when you say--I am sorry; was it 12?
        Mr. Mooney. Yes; 12 dams we will be working on.
        Senator Gorton. Yes; but that includes the very first of
    those six elements?
        Mr. Mooney. Right.
        Senator Gorton. You will actually finish three?
        Mr. Mooney. We will actually fund the final construction
    for three. The rest will be funding the other portions of steps
    in other dams.
        Senator Gorton. All right. Thank you. You have certainly
    answered my questions.
        Good morning. One more set of questions.
        Senator Domenici. I am just here to listen.
        Senator Gorton. OK. Ms. Deer, as you of course well
    remember, last month the Indian Affairs Committee and the
    Banking Committee had a fairly well publicized hearing on
    Indian housing programs. We both learned, without regard to any
    misuse, that Indian housing costs are higher on average than
    other low income housing projects, partly, I suppose, because
    they are often in isolated areas, partly because of Native
    hiring preferences, and partly because of the Davis-Bacon Act.
        The misuses of the money in the Indian housing programs
    were nationwide and were significant. Fortunately, you did not
    have any responsibility for that. But I would like to ask the
    general question connected with all of these construction
    projects we are talking about, whether it is work on dams or on
    schools or on justice facilities: Are all of the same factors
    of additional costs applicable to other Indian construction
    projects as they are to schools?
        Second, do you run the risk of the same kind of misuse of
    money for which HUD was at least partly responsible?
        Ms. Deer. Well, let me say that nobody is perfect and that,
    yes, there have been problems. But we are consistently working
    to prevent problems, and in my earlier statement I talked about
    the resolution of these audits and better management. So
    everyone knows that we have to adhere to the highest standards
    and that when there are problems there is a lot of publicity on
    them.
        I would have to refer to our construction person in terms
    of your question about the general problems.

                      construction on indian reservations

        Senator Gorton. Well, I would like an answer to that
    question. Does construction of all these other facilities cost
    considerably more on Indian reservations than it does for local
    governments or in the private sector?
        Mr. Schweigert. In facilities, which I can speak for,
    Senator, our costs are relatively the same. Because of the fact
    that in most cases our facilities are in rural or out of the
    way places, they do cost more money generally, because you have
    to haul material and people in as opposed to cities and so
    forth, metropolitan areas.
        But we feel that our projects are well designed. We have
    architects and engineers that are registered normally in the
    States in which we design and build those facilities, and our
    cost estimates are based on national costs. So we feel that our
    costs are----
        Senator Gorton. Does either Indian preference or the Davis-
    Bacon Act add significantly to the cost of these projects?
        Mr. Schweigert. It would depend on whether the tribes
    handled the project through a 638 contract. If they handle it
    through a 638 contract or a 297 grant, it could be higher
    because of their associated costs of managing the project.
        Senator Gorton. Thank you.
        Mr. Schweigert. But that would vary from tribe to tribe.
    There is quite a variance between tribes.
        Senator Gorton. Thank you.

                         education program performance

        I would now like to ask a few more questions on education,
    but in this case not education construction but education
    performance. Since we have a significant number of Indian
    students in Indian schools, but a far greater number in public
    schools, how do you evaluate the quality of education that is
    being provided by the Indian schools? Is there a significant
    difference in student performance in the Indian schools and
    among Indians in the regular public schools?
        Do we know that we are getting a decent quality of
    education for the money that we are investing?
        Ms. Morris. The difficulty surfaces because you do not have
    identical assessment measurements in public schools as in our
    school system or to compare also with, say, the church schools
    on the reservations. In the past there have been reports, none
    very recently, that gave indications that Indian students
    attending public schools fared much better than they did in
    Bureau schools. We have not seen a report in recent years that
    is documenting that.
        Within our schools, since about 1987-88 we have been
    working very strongly with the schools on improving. The focus
    has been on improving them academically. And there is an
    effective schools movement that began in about 1988, and that
    has continued now that there is legislation for Goals 2000 and
    the Improving America's Schools Act.
        All of our schools are in the school reform movement. They
    are looking at how they test the children, how they assess them
    with multiple measures, rather than simply standardized tests.
    There is one school that is in the process of getting
    reaccredited. Otherwise, 99 percent of the schools are all
    accredited now, whether regionally, and/or by the State.
        Senator Gorton. Are Indian schools required to meet the
    State education requirements of the State educational
    authorities in the States in which they are located?
        Ms. Morris. They are not required to. Many of them choose
    to. If they choose to be accredited by the State, then they
    follow those mandates.
        Senator Gorton. Did you say 99 percent were accredited?
        Ms. Morris. Either by a regional accreditation agency and/
    or by the States. Some are dual accredited by a State and
    regional.
        Senator Gorton. How many of the Indian schools are actually
    accredited by the States in which they are located?
        Ms. Morris. Is it about 67? Yes.
        Senator Gorton. Can you make comparisons on ultimate
    performance by SAT scores? Are SAT scores in Indian schools
    comparable to those in public schools or comparable to the
    Indians in public schools who take SAT's?
        Ms. Morris. Again, we are not talking about standardized
    achievement tests, but SAT's, those that are preparing people
    for college----
        Senator Gorton. Right.
        Ms. Morris [continuing]. That is very much a voluntary test
    that young people can take, like the ACT's. And the States
    maintain that data, we do not, because the States administer
    the tests, those tests. So we could gather that data for you if
    you wanted it for the 23 States where we are, where we have
    schools. But we do not maintain that.
        Senator Gorton. Do you not think that that would be of
    considerable value to you?
        Ms. Morris. It would give us additional indicators. But
    again, it does not impact all of the young people.
        Senator Gorton. No; of course not.
        Ms. Morris. Because it is a voluntary test.
        Senator Gorton. It would seem to me that a comparison of
    how your young people who voluntarily take that test in Indian
    schools do as against the general population or against the
    Indian population in public schools would be of great value to
    you in determining and setting priorities.
        Almost 10 years ago, Congress requested that the Office of
    Indian Education Programs complete a comprehensive education
    plan on the requirements of Bureau schools and how best to
    address them. We, at least, have never received such a plan. At
    last year's hearings you told us that a single comprehensive
    plan was found to be inappropriate for all of the various
    schools, and I am told that your office has been developing a
    strategic plan to comply with the requirements of the
    Government Performance and Results Act of 1993.
        When are we going to see that, and how does it differ from
    what was requested in 1988?
        Ms. Morris. I was not here 10 years ago and I understand
    that there was quite a bit of turmoil that was generated as a
    result of that request. I do not know the facts behind that.
        Our intention in this last year since I have come in as the
    Director has been to set a plan for the next 5 years that any
    organization, any entity, has to have. You have to have a plan
    to know where you are going and to measure yourself to see what
    progress you are making. So we have been meeting with staff in
    the field, with tribal reps as well, to develop a strategic
    plan.
        A draft was prepared last December. We started consultation
    with tribes in February on that. We are in our official
    consultation mode right now. The first regional hearing,
    regional consultation in fact, started today for the east
    coast. The draft plan has been distributed across the country.
    The strategic plan is a part of our consultation package. There
    are eight major items that we are consulting on, and it is
    included in the yellow consultation booklet that has been
    distributed for review prior to the consultations.
        If we did not get a copy to you and your staff, we can do
    that so you would have a copy of that. But it has been
    available since December.
        Senator Gorton. OK. We would like that.
        [Clerk's note.--Due to its volume, the above mentioned
    document has been retained in subcommittee files.]

                           remarks of senator bennett

        Senator Gorton. Senator Bennett, at this point I am at the
    end of one set of questions and ready to move to another. We
    are delighted to have you here, and if you have any comments or
    any questions I will defer to you at this point.
        Senator Bennett. Thank you, Mr. Chairman. I am going to
    have to leave very shortly because, in the genius of the
    Senate, we have two subcommittees of the Appropriations
    Committee meeting simultaneously and I am a member of both of
    them. So I am going to have to run off.
        Senator Gorton. You are going to have to ask my
    transportation questions for me.
        Senator Bennett. Yes; I will do my best to do that.
        I have a personal observation. We had an Indian foster
    daughter who lived with us for 4 years coming off the
    reservation. We put her in the schools where we lived then in
    the Los Angeles area and found a very significant difference
    between her Indian experience and the experience she had in
    public schools in the Las Virgines School District in the Los
    Angeles basin.
        When she returned to the reservation, which was an
    appropriate thing for her to do given her past experiences and
    her long-term life goals, her educational opportunities dropped
    off very dramatically from those that she had had in our
    neighborhood, and we were sorry to see that happen.
        We stayed in touch with her, consider her still a foster
    daughter, and her child our foster grandchild. We are
    personally very distressed at what we see as a rather bleak
    future for this grandchild compared to what would be available
    if she could somehow get into a school that we would consider
    more traditional in the American educational system.

                  long-term goal for bureau of indian affairs

        It is a universe of one and it is never fair to make
    generalizations from it, but I could not resist, given the line
    of questioning you are having. And that brings me to the
    general question that I guess, Ms. Deer, is your
    responsibility, of what is the long-term goal of the Bureau of
    Indian Affairs?
        We are giving you roughly $2 billion every year to spend
    on, if I understand your testimony correctly, about 1.2 million
    Indians. Where do we want this segment of our population to be
    10 years, 20 years from now? What are we hoping to build with
    this $2 billion that can say to my foster granddaughter, things
    are going to be better for you and your children as a result of
    the money the Federal Government is spending than they were for
    your mother? We are building a ramp toward what? Fill in the
    blank for me.
        Ms. Deer. The Bureau of Indian Affairs is the main
    mechanism by which the U.S. Government carries out its
    responsibilities to the tribes as outlined in the treaties and
    court decisions and attorney general's opinions and other types
    of acts. I would envision the Indian tribes having the basic
    standard of living comparable to the rest of the U.S.
    population.
        At this point, by every single census American Indians and
    Alaska Natives are at the bottom of the socioeconomic ladder. I
    feel that there is the power here, especially in the
    Appropriations Committee, to meet many of these needs. It is
    not rocket science. We need to invest more in education, more
    in health services, so that the tribes will be able to march
    into the 21st century with hope.
        So I would emphasize that you have the power in your
    capacity as U.S. Senators, as members of this Appropriations
    Committee, to allocate sufficient resources so that we can
    repair the dams, so we can build the schools, so we can make it
    possible for the tribes to have a very realistic standard of
    living.
        Senator Bennett. So the long-term goal is to raise the
    standard of living, without making any attempt to bring the
    Indian population into any kind of integration with the rest of
    the population of the country?
        Ms. Deer. Many thousands of Indian people live in urban
    areas, and it is an individual's choice whether they want to
    live on the reservation or whether they want to live off the
    reservation. You ask a very interesting question which has been
    the subject of many articles and many discussions, integration
    versus assimilation. I would point out in the fifties
    relocation was one of the policies, where they attempted to
    have many Indian people leave the reservations and move into
    the cities. It was also the termination era, et cetera.
        I would like to point out that it would be important for
    individuals to have the choice and for the tribes to exercise
    their choices in all these matters. And at this point, again,
    if there could be a long-term commitment on a bipartisan basis
    to fund these programs, we could resolve many of these
    problems.
        We, the United States, rebuilt Europe after World War II,
    and this is a much smaller population. It is within our
    interior boundaries. So I would ask you to consider this as you
    make your deliberations.
        Senator Bennett. Well, this is an appropriations hearing,
    so probably not the proper venue for this, but, yes, we put
    money into the Marshall plan and rebuilt Europe, and then we
    disappeared economically. We stayed there militarily for a
    variety of reasons, but at the invitation of the Europeans. We
    put them on their feet and then they took over.
        Is there an anticipation that at any point this will cease,
    in the European pattern?
        Ms. Deer. That is Europe and this is this country, and we
    are talking about the native peoples here. Efforts such as the
    self-governance, self-determination, have been aimed at helping
    tribes assume more responsibility and to make a change from the
    previous policies of paternalism that the Bureau and the
    Government followed to one of self-governance and self-
    determination.
        So I think it is too far in the future to anticipate that,
    but I always anticipate that there will be American Indians and
    Alaska Natives living in this country, that we will have a
    government-to-government relationship with. This is a large
    country. We have millions of people here, and I think that the
    fact that we have approximately 2 million Indians now is a
    great tribute to the courage and the leadership of the
    individual Indian people as well as the tribes, in view of the
    harsh policies and many of the problems that the tribes have
    encountered over the years.
        Senator Bennett. Well, as I said, this is probably not the
    appropriate venue to have this discussion, but we appropriate
    money year after year--and if I am not mistaken, Mr. Chairman,
    is this not the largest single portion of this subcommittee's
    budget?

                    programs subcommittee is responsible for

        Senator Gorton. Well, Senator Bennett, you bring up
    something that I want all the audience to be able to come up
    and see when they wish. This chart shows the relative amounts
    of money spent for the various purposes within this
    subcommittee's jurisdiction. The blue are Indian programs. That
    is not as tall as all of the land management programs together,
    but it is taller than any one of them.
        Senator Bennett. Yes.
        Senator Gorton. Land management agency budgets are large.
    Energy and research and cultural activities are all much
    smaller. So yes, funding in our bill for native programs is a
    considerable amount of money. It is larger than any single
    other purpose, but it is not as large as all of our land
    management combined.
        Senator Bennett. Yes; I see. Well, coming from where I come
    from, in the business world, I always like to think in terms of
    a strategic plan and a goal, and where this is going to take us
    5 years, 10 years from now. Or are we in a circumstance where 5
    years, 10 years, 20 years from now, we are going to be
    appropriating money on a maintenance basis and nothing is going
    to change, other than we want to raise the standard of living
    within the present context?
        If that is the policy decision made someplace else, I
    should understand that that is what our appropriations'
    function is. But I would like at some venue to open that
    question, and this is clearly not the venue, and I have
    exhausted my time.
        Senator Gorton. No; it is appropriate--no, on the contrary,
    Senator Bennett, it is an appropriate venue for that. I asked
    that question of Ms. Deer last year and got the answer that you
    fear, that it is essentially a maintenance program.
        I guess my followup question to yours to Ms. Deer would
    relate to the fact that, while the goal is that the standard of
    living of Indians in Indian country be roughly the equivalent
    of that of all Americans, in fact, it is the lowest
    socioeconomic identifiable ethnic group in America, which would
    seem to me at least to indicate that 150 years of this kind of
    policy have been an overwhelming failure.
        I guess my philosophical question to Ms. Deer would be, is
    that simply because we have not appropriated enough money and
    that it should be double or more of this, more or less in
    perpetuity? Is it because of the total ineffectiveness of the
    Department of the Interior and the Bureau of Indian Affairs for
    100 years or more? Or is it because there is a conceptual flaw
    in attempting to keep people separate and say that there are
    obligations toward them other than their own obligations to
    work for themselves?
        Ms. Deer. You have asked a mouthful of questions.
        Senator Gorton. I sure have. I think that is what Senator
    Bennett was looking at, too.
        Ms. Deer. Indian people want to be Indians. They want to
    live in the reservation areas. They would like to maintain the
    culture, the kinships. Not everyone wants to melt into the
    mainstream. When the relocation came, some Indians did stay in
    the cities, but there was a lot of travel back and forth.
        One of my own tribal people camped out in Chicago--this is
    my term--camped out in Chicago for 30 years. When retirement
    came, she now lives 10 miles from the reservation. So Indians
    moved into the cities, but established Indian centers and
    maintained their cultural and ethnic identity.
        Again, these are questions that I think would be very
    appropriate for the tribal people to answer. But I want to say
    that Indian people want to be Indians, wherever it is, and each
    person can decide for themselves what this means. But we do
    envision the Federal Government carrying out its
    responsibilities as specified in the treaties and the court
    decisions and the Attorney General's opinions and some of the
    other actions.
        I think that, to answer your question about the cost, the
    wealth of this country is built from the wealth of the tribes.
    This all at one time was Indian country and, as you know, over
    a long period of time the reservations were established, and
    the tribes have been deprived of meaningful economic
    opportunity for many years. In my opinion, if there could be
    this long-term commitment to resolve some of these very serious
    problems that we talked about here with the schools, with the
    dams and roads and so on, and help the tribes with their
    economic development projects, the tribes could in all
    probability really function well.
        There are tribes that are doing this now, and I would point
    out that the Mississippi Band of Choctaw Indians has done a
    remarkable job in a 30-year period, going from the bottom of
    the socioeconomic ladder in Mississippi to now being the major
    force in that area. This has occurred through the hard work and
    determination and leadership of the chief and the tribal
    leaders there, taking advantage of the opportunities that were
    made available by this Government. They are doing well and I do
    not envision that they would want to make backward changes.
        So some of the problems of the tribes are very hard to
    solve. For example, out in the plains we have significant
    numbers of people and there are not enough resources at this
    point to adequately meet the health and education and economic
    development needs of the tribes out there.
        So again, it is hard to answer in a global way speaking for
    all the tribes, because there are small tribes, there are
    medium tribes, there are large tribes. I really do appreciate
    the many-faceted questions that are being asked here and I
    would encourage all of us to carry on some additional discourse
    when it is appropriate.
        Senator Bennett. I suppose we have probably exhausted that
    subject, but I am sure we are going to come back to it again
    and again, because you have given me an example of a tribe that
    demonstrated--I know nothing about it. I am just taking what
    you told me at face value. I would guess, from what you have
    said, this is a tribe which members have shown some fairly
    significant entrepreneurial spirit, created their own economic
    activity, and, therefore, got themselves into a circumstance
    where the long-term vision can be that they would ultimately be
    off any Federal kind of subsidy, just the way, back to your
    earlier analogy, the Europeans have gotten off the American
    subsidy at the end of the Second World War.
        If indeed that is a correct analysis of what you said, it
    would seem to me the clear message on the part of all of
    society, as manifested through its elected representatives
    here, would be to try to engender that entrepreneurial spirit
    on the part of every tribe, because the Mississippi Choctaw
    Indians apparently solved their problems. Their standard of
    living is not at the bottom. They have, in your phrase, become
    one of the leaders in that area.
        That is what I would like to see eventually happen, so that
    we could look at this money and say ultimately this was seed
    money put up by the Federal Government, on the basis of which
    the Indian tribes in America, wisely using this seed money,
    became economically self-sufficient and weaned themselves to
    the point where they would not require it any more.
        But if that is a philosophical no-no and you are saying,
    no, under the treaties these people must never be weaned from
    some kind of a Federal subsidy, then I want to know if that is
    the basic policy.
        Ms. Deer. The tribes wish to have economic self-sufficiency
    and, as I mentioned earlier, good education, good health. We
    have tribes that have achieved some of these and I mentioned
    one, the Mississippi Choctaws. Others are striving toward this.
        But again, the reason I mentioned the Marshall plan was to
    remind all of us how we helped rebuild the European countries,
    and we have not been able yet to do that, to help the tribes
    rebuild so that they can be economically self-sufficient.
        Senator Bennett. I think we have exhausted this.

                             political contribution

        Senator Gorton. I would like to go on to another question.
    Recently the Washington Post reported that the Cheyenne Arapaho
    Indians had given $107,000 to the Democratic National Committee
    during the course of last fall out of a welfare fund for tribal
    members who need help with hospital bills, heating bills, and
    the like, from a tribe with what the newspaper described as 80
    percent unemployment.
        Was that an appropriate use of tribal money?
        Ms. Deer. Well, let me say that tribes, like all other
    groups of citizens, do have the right to make political
    contributions. I am not sure that that is where the money came
    from, but it is their basic right. And I think that your
    question is appropriate.
        Senator Gorton. Well, do you know the source of that
    $107,000 contribution?
        Ms. Deer. No.
        Senator Gorton. You say you do not know whether it was from
    the tribal welfare fund?
        Ms. Deer. No; I do not have that information.
        Senator Gorton. Do you know whether Federal appropriated
    funds were involved, went into that fund out of which the
    contribution was made?
        Ms. Deer. No; I am sorry, I do not know that.
        Senator Gorton. Does BIA have the right to ask?
        Ms. Manuel. We are fairly certain that the funds did not
    come from Federal sources. However, you may be aware that the
    inspector general has sent a letter to Mr. Regula and Mr.
    Livingston dated April 8 that indicates that there will be an
    audit by the inspector general on the Federal funds, as
    requested.
        Senator Gorton. I am sorry. The inspector generalof the
    Department of the Interior?
        Ms. Manuel. Yes; of the Department of the Interior.
        We have been working with the Bureau of Indian Affairs and
    the Cheyenne Arapaho Tribe over the last couple of years over
    some audit issues, so that we are fairly certain that these
    funds did not come from Federal dollars. Upon the conclusion of
    the inspector general's review and our own conclusion of the
    outstanding audit issues that we are working with the tribe on,
    I think we can give you a more definite answer.
        Senator Gorton. But the Cheyenne Arapaho Tribe does get a
    distribution for tribal government and for other purposes from
    the BIA?
        Ms. Manuel. Yes.
        Senator Gorton. And some of that money certainly does go
    into the tribe's welfare fund, does it not?
        Ms. Manuel. They operate a social services program, yes.
        Senator Gorton. With money appropriated to the BIA and
    distributed by the BIA?
        Ms. Manuel. The social services program is actually run out
    of the area, so the tribe does not run--my understanding is
    that the tribal welfare fund that was referred to in the press
    releases was actually a tribal fund that was established by the
    tribe, and we had no control over it and none of the Federal
    dollars go into that fund.
        Senator Gorton. Federal dollars do go into it?
        Ms. Manuel. Do not, do not.
        Senator Gorton. Do not go into it? Well then, what funds do
    go into it?
        Ms. Manuel. Apparently funds that the tribe generates from
    sale of cigarettes, bingo revenues, funds that they generate
    from tribal enterprises.
        Senator Gorton. All right. So this fund to the best of your
    knowledge did not have any Federal money in it?
        Ms. Manuel. That is right, that is right.
        Senator Gorton. And that is what the inspector general is
    attempting to determine?
        Ms. Manuel. Yes.
        Senator Gorton. And I assume that you would take the
    position that it would be inappropriate for a tribe to make a
    political contribution out of Federal money?
        Ms. Manuel. Yes.

                            indian country in alaska

        Senator Gorton. I had hoped that Senator Stevens would be
    here. I know he has a large number of questions about the
    recent decision with respect to Indian country in Alaska. I
    guess I would just like to ask you, Ms. Deer, perhaps one
    general question on that subject.
        I understand that the BIA has said that that decision,
    assuming that it is finally upheld, will not have any
    significant impact on BIA funding. Am I correct in that
    assumption?
        Ms. Deer. That is correct.
        Senator Gorton. And why would it not?
        Ms. Deer. At this point, according to the Information I
    have, it will not have any significant impact. The tribes do
    have self-governance compacts and they make decisions under the
    self-governance compacts as to how the moneys are spent.
        Senator Gorton. So in your view, while the tribes might
    have more authority or more responsibility, the relationship
    between the tribes and the distributions to the tribes from the
    BIA would not be affected?
        Ms. Deer. Basically, yes.
        Senator Gorton. Well, as I say, Senators--there are a
    number of very detailed questions on that subject from Senator
    Stevens, and we will submit those to you in writing and hope
    that you can answer them.
        Ms. Deer. We will be very happy to provide the information.

                         Additional committee questions

        Senator Gorton. I also have some questions from Senator
    Cochran, and there could be those from others, and there will
    be some followup questions under my name on the subjects that
    we have already discussed. As Senator Domenici is, I am
    particularly interested in education programs and you will get
    some more questions on those.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing.]

                         Additional Committee Questions

                                wa he lut school

        Question. Last year Congress appropriated $2.5 million to
    begin rebuilding of the Wa He Lut Indian School in Washington
    State. $2 million was sent to the school as a construction
    grant last November. Based on the Bureau's own program of
    requirements calling for a 17,500 square foot facility, the
    total project cost will be $4 million. Is the Bureau supportive
    of an additional $2 million for this project?
        Answer. The Bureau provided a $2 million construction grant
    to the school board from the fiscal year 1996 emergency
    supplemental appropriations. The other $500,000 was provided
    for emergency evacuation of the school children during the
    flood. Based on an estimate prepared by the school board's
    architect dated April 11, 1997 for a 18,151 square foot
    replacement school, the estimated total construction cost is
    $4,182,000, or an additional $2,182,000 above the appropriated
    amount.
        Question. The Wa He Lut School rebuilding was chosen as one
    of five pilot projects to make BIA school construction ``more
    entrepreneurial and customer-focused,'' in Vice President
    Gore's words. Given the fact that the Office of Indian
    Education Programs originally requested $5 million for this
    effort, can you advise this Committee of any compelling reason
    why we should not provide the additional funding to complete
    this task?
        Answer. The request from the BIA, the Department and the
    Administration for the Wa He Lut School emergency response and
    repair needs from the 1996 floods was $2.5 million. The request
    was based on the report on the school's needs at the time as
    well as the comparative need of the other reservation emergency
    project needs. This amount was funded in the fiscal year 1996
    emergency supplemental appropriations.
        The Wa He Lut School Board was working with the Federal
    Emergency Management Administration (FEMA) to try to secure
    additional funds for the school replacement since the old
    school was destroyed by the 1996 floods. The Bureau understands
    that there is potentially up to $402,000 which will be made
    available to FEMA and eventually to the School Board. If this
    occurs, the balance needed for reconstruction is $1,780,000,
    based on the school board's estimate for replacement.
        The Bureau recognizes that Wah He Lut School cannot be
    completely replaced by the $2 million grant to the school board
    from the emergency supplemental appropriations. However, the
    Bureau's existing schools have an immense backlog of over $680
    million in code and standard deficiencies, many of which
    related to health and safety. In order to fairly distribute the
    limited funds available under constrained budgets, it has been
    necessary to establish a national prioritization process.
    Through this competitive process, a national list of annual
    repair projects are determined based on need. For School
    replacement projects must be funded in the order of the
    Congressionally approved priority process projects in order of
    need, Unfortunately, Wa He Lut School replacement is not
    currently high enough on the repair priority projects list; is
    not on the replacement school priority list frozen by Congress,
    and of which only seven of the 16 schools on the list have been
    completed. The school will need to compete in the future for
    any additional funds necessary for replacement if funds are not
    forthcoming from other sources.

                         tribal base fund distribution

        Question. Will you please provide this Committee with
    information on how Tribal base is determined? When was this
    formula last revised? Does the BIA take into consideration
    Tribes' current and changing population, their socioeconomic
    status--their need? Why isn't the base reevaluated periodically
    to reflect changes? Shouldn't it be, given that federal funding
    is declining? Would legislation be necessary to effect this?
        Answer. Historically, the funding allocated to Tribes has
    been based on the Indian Priority System, an old system that
    the Department and Bureau had in place for several years. In
    that distribution system the Tribes in each location and each
    area established what they felt was their need for funding on
    the basis of population, land base, forestry dollars, number of
    forestry acres. While a new system, the Tribal Priority
    Allocations System (TPAS) is now in place, the historic method
    of distribution is still in place.
        Tribal base fund distribution has not, to date, taken into
    consideration changing population or socioeconomic status, but
    included, historically, Tribes' determination of their need as
    described above. As programs such as Indian Child Welfare
    Assistance have been transferred to TPA, the distribution has
    been based on population, number of children at risk, etc. In
    the fiscal year 1998 budget, however, an increase of $7.3
    million is requested largely due to the increase in reservation
    population. Similarly, an increase of $10 million is requested
    for contract support based on the proposed TPA general increase
    and the fact that about 65 percent of the TPA funding is
    contracted by Tribes.
        Several programs recently transferred to TPA are not
    included in the Tribal base: contract support, welfare
    assistance, road maintenance and the housing improvement
    program. Funds appropriated for these programs are distributed
    by a variety of formulas. Need is still a key factor for
    welfare assistance and housing improvement. Need is based on an
    individual eligibility basis. Contract support is distributed,
    for the most part, based on rates negotiated with the Inspector
    General. Road maintenance is distributed on the following
    factors: the actual need requests for emergency,
    administration, bridges, airstrips and snow/ice removal; and
    the miles in the BIA Roads system. The BIA Roads system miles
    are weighted to reflect the road surface-type priorities.
        An additional factor that has come into play in Tribal base
    fund distribution is the focus and needs of Small and Needy
    Tribes and the need to provide funding to Tribes that are newly
    recognized. The method of distribution is currently the same
    for both programs: provide a minimum of $160,000 for Tribes in
    the continental United States and $200,000 for Tribes/Native
    entities in Alaska. The Joint Tribal/DOI/BIA Reorganization
    Task Force (Task Force) prepared a report on the Small and
    Needy Tribes and the fact that base funding for many Tribes,
    particularly in Alaska and California, are far less than the
    defined minimum levels above, and not enough to even begin to
    provide a viable Tribal government operation. The Task Force
    preliminary assessment of the total needed to bring small and
    needy Tribes to the minimum level was $23 million. To date, $6
    million has been appropriated and $8 million is requested for
    fiscal year 1998.
        Over many years, several studies have been undertaken to
    explore and define an ``equitable fund distribution
    methodology''. The most recent, done in 1989, used population,
    Tribally owned acres of land, individually owned acres of land
    as criteria and created agency management pools. Using the
    formula created in the study and comparing to current funding
    levels at the time, Tribes in five areas would have received
    increased funding, the Navajo Nation funding would have
    remained basically level, and the Tribes in seven areas would
    have received less funding. The report found that the data
    available was lacking and not always comparable from area to
    area. The report recommended that if a formula is instituted at
    all, that it be instituted over a number of years (five to ten)
    to minimize short term large dislocations.
        This study, similar to those undertaken earlier, basically
    resulted in the same results. There is not a formula for
    ``equitable funding'' that would produce a consensus from
    Tribes, much less a majority.
        The Task Force recommendations also included creating a
    ``standard assessment methodology'' tool for each individual
    program in the Bureau's annual appropriations. Considerable
    time over a two year period was spent in developing a model for
    one program, to be followed and used for the rest of the
    programs. A Work Group to develop this model was comprised of
    both Tribal and Bureau staff. There were exhaustive hours of
    discussion on the subject and again, it was discovered that it
    is virtually impossible to achieve ``equitable fund
    distribution'' that will achieve a consensus among Tribes and
    if that were possible, it would only be so with significantly
    increased appropriations in TPA. Finally, the Bureau does not
    believe legislation would be required to change the fund
    distribution methodology.

                              education facilities

        Question. The Bureau has raised the fact that many of its
    education facilities are very old. Will the Bureau provide this
    Committee with specific information as well as comparative
    information on the average age of public schools in the United
    States?
        Answer. The table below shows the number of school
    facilities in age increments of nine years.

                                                                 SCHOOL FACILITIES BUILDING AGE
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        School facilities building age in years
                                                          --------------------------------------------------------------------------------------------------
                                                             0-9     10-19    20-29    30-39    40-49    50-59    60-69    70-79    80-89    90-99    Total
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    School facilities....................................       21       26       23       49       20        9       26        7        2        2      185
    Percentage of total..................................       11       14       12       26       11        5       14        4        1        1      100
    --------------------------------------------------------------------------------------------------------------------------------------------------------

        Bureau staff have attempted to obtain a report providing
    the national average age of public schools but have found no
    information from either GAO or the Department of Education. It
    is important to point out, however, that public schools have a
    tax base and other resources upon which to draw. The Bureau
    does not.
        The Administration has requested $5 billion to address
    facility repair needs for public schools across America with a
    two percent set-aside for the Department of Interior. This
    resource combined with the Bureau's education construction
    budget request will help eliminate the ever-growing backlog of
    repairs in these schools.

                             education performance

        Question. Does the Bureau review the relative performance
    of Indian students in public schools versus BIA schools?
    Shouldn't it, if it does not already? How does the Bureau
    determine whether BIA schools are doing a good job of teaching?
    What is the average SAT or ACT score (or other standardized
    test of aptitude and achievement) in public schools? What is
    the average for students taught in BIA schools?
        Answer. No, the Bureau does not compare the performance of
    Indian students in BIA funded schools with Indian students in
    public schools. It is difficult to make comparisons between BIA
    schools and public schools. The Bureau does not collect SAT or
    ACT scores on its Indian students. Any testing for career
    planning or academic student assessment for BIA schools is
    designed at the local level with school board and parental
    input. BIA schools offer programs which are accredited by
    states or regional associations and require all teachers to
    meet state certification requirements. Almost all schools are
    participating in the school reform movement as defined in Goals
    2000: Educate America Act and Improving America's Schools Act
    of 1994.
        Within the Bureau's overall strategic plan to be submitted
    to the Congress in September 1997, the Office of Indian
    Education Programs' (OIEP) performance goals for fiscal year
    1999 will address student dropout rates, student attendance,
    student academic performance, Native languages and school
    accreditation rates. Under the requirements of GPRA, the
    student performance indicators selected for measurement will
    reflect the effectiveness of the Bureau's school system.
                                    ------

                     Questions Submitted by Senator Stevens

                            indian country in alaska

        In December, the Ninth Circuit Court of Appeals issued its
    opinion in Alaska v. Venetie Tribal Government that the Alaska
    Native Claims Settlement Act did not extinguish Indian Country
    in Alaska and that the land Venetie occupies is Indian Country.
    The State of Alaska opposes this decision and has submitted a
    petition for writ of certioraris to the Supreme Court. The
    Court will decide later this summer whether or not to hear the
    case. It is unclear what the Supreme Court will decide; and
    this decision opens the door for the remaining 225 Native
    villages in Alaska to explore the possibility that they have
    Indian country.
        I would like to know more about BIA funding of Alaska
    Native programs and the potential consequences on the Federal
    programs in the Interior bill if the Ninth Circuit's holding
    stands. Assume for the sake of argument that all 226 tribes in
    Alaska are successful in proving they have some Indian country.
        Question. Solicitor Sansonetti issued an extensive 180-page
    opinion in 1993 that there is no Indian Country in Alaska. Is
    that still the Department of the Interior's position?
        Answer. The Office of the Solicitor's position is that the
    portion of the 133-page Opinion of former Solicitor Sansonetti,
    that ``not withstanding the potential that Indian country still
    exists in Alaska in certain limited cases, Congress has left
    little or no room for Tribes in Alaska to exercise governmental
    authority over land or nonmembers,'' M-36-975, at 108 together
    with the January 19 Supplemental I (58 Federal Register
    54364(1993), is subject to review, but has not been withdrawn
    or modified. However, unless it is overturned, the Ninth
    Circuit's decision in Venetie remains the law in Alaska.
        In his Opinion, Solicitor Sansonetti did not conclude
    unequivocally that there is no Indian country \1\ in Alaska but
    found that Indian country might exist in certain circumstances,
    although he believed that Native villages do not have
    governmental jurisdiction over lands and nonmembers on ANCSA
    Native corporation lands and village owned fee lands.
    ---------------------------------------------------------------------------
        \1\ In 1948, Congress defined ``Indian country'' as follows:
        Except as otherwise provided in sections 1154 and 1156 of this
    title, the term ``Indian country'', as used in this chapter, means (a)
    all land within the limits of any Indian reservation under the
    jurisdiction of the United States Government, notwithstanding the
    issuance of any patent, and, including rights-of-way running through
    the reservation, (b) all dependent Indian communities within the
    borders of the United States whether within the original or
    subsequently acquired territory thereof, and whether within or without
    the limits of a state, and (c) all Indian allotments, the Indian titles
    to which have not been extinguished, including rights-of-way running
    through the same. 18 U.S.C. Sec.  1151.
    ---------------------------------------------------------------------------
        Question. My staff tell me that the Solicitor's Office is
    preparing a report on the potential impact of Indian Country in
    Alaska. Is that report completed? When do you expect to
    complete it? Please provide a copy of it to the Appropriations
    Committee before it is publicly released.
        Answer. The Department's Office of the Solicitor and the
    Bureau of Indian Affairs have prepared an analysis of the
    implications of the existence of Indian country in Alaska. The
    paper was sent to the Appropriations Committees on March 11,
    1997. A copy is attached.

               analysis of the impact of indian country in alaska

        The following provides an analysis of the implications of
    the existence of Indian country in Alaska, prepared in response
    to a request from the Senate Interior Appropriations
    Subcommittee. The paper is written in general terms, as it is
    difficult to say with any degree of certainty exactly what
    these implications are, since as of this date the Venetie
    matter remains in litigation and is on petition for certiorari
    to the Supreme Court. However, this paper explains the Venetie
    decision and discusses whether the decision would have an
    impact on BIA funding. While the scope of the Venetie decision
    currently remains unresolved, for the purposes of the
    discussion below, the paper assumes that the Venetie decision
    would apply to all Alaska tribes.
        Background. The total BIA funding allocated in fiscal year
    1996 for Alaska programs was $80.2 million. The estimated total
    funding level for BIA Alaska programs in fiscal year 1997 is
    $91.7 million and the fiscal year 1998 budget request is $97.4
    million. The greatest share of funding for BIA Alaska Programs
    (over 90 percent) goes to the Tribal Priority Allocations (TPA)
    activity for programs such as tribal government operations;
    social services programs; law enforcement and tribal courts;
    scholarships; and natural resource management. Tribes may
    prioritize and reallocate TPA funds among programs in
    accordance with their unique needs and circumstances. In
    addition, almost 60 percent of the Alaska TPA funds are
    provided to Tribes through Self Governance grants whereby
    Tribes are allowed greater flexibility in program management.
    Additional information on BIA funding to Alaska is provided in
    the Attachment.
        The Department believes there are no immediate budget
    impacts anticipated beyond the current levels of funding even
    if Indian country is assumed to apply to all Alaska Native
    communities.

                                 indian country

        By way of background, the phrase ``Indian country'' is a
    term of art in Indian law. Its meaning evolved over time, and
    Congress in 1948 statutorily defined it for application in the
    criminal context. 18 U.S.C. Sec.  1151. This definition is also
    used for civil jurisdiction. DeCoteau v. District County Court,
    420 U.S. 425, 427 n.2 (1975).
        [T]he term ``Indian country'', as used in this chapter,
    means (a) all land within the limits of any Indian reservation
    under the jurisdiction of the United States government,
    notwithstanding the issuance of any patent, and, including
    rights-of-way running through the reservation, (b) all
    dependent Indian communities within the borders of the United
    States whether within the original or subsequently acquired
    territory thereof, and whether within or without the limits of
    a state, and (c) all Indian allotments, the Indian titles to
    which have not been extinguished, including rights-of-way
    running through the same. \2\
    ---------------------------------------------------------------------------
        \2\ Under  18 U.S.C. Sec.  1151, Native allotments are Indian
    country, and some might be considered to lie within the boundaries of a
    dependent Indian community. However, the extent of tribal governmental
    jurisdiction over them arguably could be analyzed under the terms of
    the allotment statute, regulations, and 18 U.S.C. Sec.  1151
    case law.
    ---------------------------------------------------------------------------
        Subsequent case law in the contiguous forty-eight states
    has continued to refine this definition in a variety of
    applications, but the general absence of reservations in Alaska
    led many to believe that Indian country in Alaska did not exist
    beyond the Annette Island Reservation. In its decision in
    Alaska v. Native Village of Venetie Tribal Government, 101 F.3d
    1286 (9th Cir. 1996) (Venetie), the Ninth Circuit held that
    this belief was not correct.

                              the venetie decision

        The issue presented to the Ninth Circuit in Venetie was
    whether the Village of Venetie's Tribal Government had the
    authority to collect a Tribal ``business gross receipts'' tax
    from an out-of-town building contractor who came to the village
    to construct a school under a contract paid for by the State of
    Alaska. The resolution of this issue turned on whether the
    village was a ``dependent Indian community'' within the
    definition of Indian country set out in 18 U.S.C. Sec.  1151.
    The district court ruled that the village could not impose the
    tax because it did not satisfy the district court's
    reformulation of the Ninth Circuit's six criteria for finding a
    dependent Indian community.\3\
    ---------------------------------------------------------------------------
        \3\ The Venetie case had been remanded previously to the district
    court by the Ninth Circuit for consideration in light of Court of
    Appeals' opinion in Alaska v. Native Villace of Venetie, 856 F.2d 1384
    (9th Cir. 1988), which set out the Circuit's six- factor test for
    determining a dependent Indian community. The six factors articulated
    by the Ninth Circuit in its first Venetie decision include:
        (1) the nature of the area;
        (2) the relationship of the area's inhabitants to Indian tribes and
    the federal government;
        (3) the established practice of government agencies toward the
    area;
        (4) the degree of federal ownership of and control over the area;
        (5) the degree of cohesiveness of the area's inhabitants; and
        (6) the extent to which the area was set aside for the use,
    occupancy, and protection of dependent Indian peoples. Venetie, id.,
    856 F.2d at 1391.
    ---------------------------------------------------------------------------
        Although on appeal the Ninth Circuit agreed with the
    district court that federal set aside for Indians and federal
    superintendence were two prerequisites for a finding of Indian
    country, it stated that these requirements should be construed
    broadly as it had previously ordered in its 1988 decision in
    the same case. Alaska v. Native Village of Venetie, 856 F.2d
    1384 (9th Cir. 1988). Reversing the district court, the Ninth
    Circuit ruled that the Alaska Native Claims Settlement Act
    (ANCSA) did not extinguish Indian country in Alaska. ``In sum,
    we hold that ANCSA neither eliminated a federal set aside for
    Alaska Natives, as such, nor terminated federal superintendence
    over Alaska Natives. As a result, Indian country may still
    exist in Alaska.'' Venetie at 1299-1300.
        Applying its six factor test to the specific factual
    situation presented, the Ninth Circuit held that the land in
    question was federally set aside for Indians as such, and that
    the Native Village of Venetie remained under federal
    superintendence even if not under its dominance. Venetie at
    1300-02. Based on these findings, the Ninth Circuit concluded
    that Venetie is a dependent Indian community, that the land in
    question is Indian country, and that the Tribe therefore has
    the power to impose its tax within such territory. The Ninth
    Circuit remanded the case to the district court ``to determine
    whether Venetie has the power to impose a tax upon a private
    party where the State of Alaska will ultimately pay the
    obligation.'' Venetie at 1302-03.
        After the Ninth Circuit's decision was announced, the
    appellee State of Alaska petitioned the Ninth Circuit for
    rehearing, with a suggestion for rehearing en banc. The Ninth
    Circuit rejected that petition on January 6, 1996. The state
    has since announced its intention to submit a petition for writ
    of certiorari to the United States Supreme Court and calculates
    that its petition is due on April 7, 1997, under the Supreme
    Court's rules. Venetie's opposition will be due 30 days later.
    On January 23, 1997, the Ninth Circuit granted the Alaska's
    motion to stay issuance of the mandate in the Venetie case
    pending the Supreme Court's final disposition of the case. The
    United States is not a party to this litigation, and the
    Supreme Court may or may not request our views on it. Thus, the
    scope of the Venetie decision remains unresolved but applies,
    at a minimum, to the circumstances of the Native Villages of
    Venetie and Arctic Village: a Tribal government which has
    obtained title to its former reserve through a voluntary
    transfer of the land from both Native village corporations.

                         impact of the venetie decision

        Although the Venetie decision can be strictly applied only
    to the facts of the case, in accordance with the request of the
    Subcommittee, the following analysis assumes, for purposes of
    discussion, a broad interpretation of Indian country in Alaska,
    i.e., it assumes all 226 Alaska native groups.

                       general indian programs in alaska

        The existence of Indian country in Alaska would not affect
    the provision of social services programs in Alaska.
        Historically, services provided to Alaska Natives have been
    authorized by the Snyder Act of 1921 which has an extremely
    broad authorization of appropriations ``for the benefit, care
    and assistance of Indians throughout the United States.''
    Although the BIA has attempted to restrict its ``benefits, care
    and assistance'' in the lower 48 only to Indians living on or
    near a reservation, the realities in Alaska have required the
    BIA to extend the scope of its activities to include all of
    Alaska, treating the entire state as a ``reservation'' for
    provision of services. This scope includes the total Native
    population identified within the state which was served by the
    BIA prior to statehood and which continues today.
        The programs having a service area defined as on or near a
    reservation include Grant Assistance, Housing Improvement
    Program, and Indian Child Welfare grants. The BIA currently
    funds these types of Social Services programs in Alaska through
    the TPA activity.

                          education programs in alaska

        The existence of Indian country in Alaska would not affect
    the current prohibition on BIA-funded schools in Alaska.
        The BIA currently provides, either through direct program
    delivery or through contract or grants, the following education
    programs in Alaska: Johnson O'Malley education assistance
    program for eligible Indian students attending public schools;
    Post-secondary Scholarships; Adult Education; Higher Education
    Scholarships.
        While at one time BIA operated an extensive elementary and
    secondary school system in Alaska, responsibility for educating
    Alaska Natives was transferred to the state over the course of
    twenty years (1966-1985) as a result of an agreement reached
    with the state in 1964. In fiscal year 1982 and 1983, the
    Congress appropriated over $40 million to the State of Alaska
    for costs of upgrading facilities to complete the transition
    from Bureau operated to state operated schools. (These funds
    were provided in addition to routine school operations and
    facility repair funds for the remaining BIA operated schools in
    Alaska.) The transfer of BIA-funded schools to the state
    culminated in Public Law 98-63, the 1985 Appropriations Act,
    after extensive consultation among the state, the BIA, and the
    Alaska Native community. Public Law 98-63 included a permanent
    legislative provision that prohibits the BIA from funding BIA
    schools in the State of Alaska.
        After enactment of Public Law 98-63, the Tribally
    Controlled Schools Act of 1988 (Public Law 100-297), authorized
    a new program of Tribal grant schools and included Alaska
    Native villages within the definition of ``Tribe'' for purposes
    of the program. On May 21, 1993, the Department of the Interior
    Solicitors made a determination that Public Law 100-297
    requires funding of grant schools for Alaska Native villages
    meeting the eligibility requirements of the statute. Since
    fiscal year 1994, Congress has enacted annual appropriations
    language prohibiting funding for BIA grant schools in Alaska.

                  tribal courts and law enforcement in alaska

        The existence of Indian country in Alaska might motivate
    Tribes to exercise governmental authority, but the Tribes would
    have to reallocate current funds in order to exercise this
    authority.
        Alaska is a Public Law 83-280 state which means that the
    state has general criminal and civil jurisdiction for police
    and courts over Indian country. Tribes retain jurisdiction
    under the 1968 Indian Civil Rights Act over misdemeanors, but
    only those which involve Indians, a limitation imposed by the
    Supreme Court. Under Public Law 83-280, states can retrocede
    their jurisdiction back to Indian Tribes. However, for this to
    happen, the Secretary must consult with the Attorney General
    and agree to accept the retrocession. In recent years, the
    Secretary has declined to accept retrocession due to the lack
    of federal funding.
        As a matter of policy, the Bureau of Indian Affairs (BIA)
    does not provide funding in Public Law 83-280 states
    specifically for Tribal courts or law enforcement. However,
    some Alaska Tribes have prioritized their TPA funds for tribal
    courts and law enforcement programs.
        At the present time, the State of Alaska is responsible for
    providing law enforcement and detention services on Alaska
    Native lands. The Alaska State Police have developed the
    Village Public Safety Officers (VPSO) program in which local
    village members are provided minimal public safety training and
    can act as first responders to calls for service.

                           alaska native trust lands

        The presence of Indian country in Alaska would not affect
    the Secretary's trust responsibility since the land is not
    currently in trust, and current regulations prohibit the
    Secretary from taking land into trust for Alaska tribes or
    individuals.\4\
    ---------------------------------------------------------------------------
        \4\ Although trust status per se does not require a finding of
    Indian country, courts may find it easier to determine that trust land
    is a dependent Indian community and thus Indian country under 18 U.S.C.
    Sec.  1151.
    ---------------------------------------------------------------------------
        The land acquisition regulations (25 C.F.R. Sec.  151.1)
    prohibit the acquisition of land in trust status in Alaska for
    Alaska Natives and tribes (except for the Metlakatla Indian
    Community of the Annette Island Reservation). Since 1978, the
    Department has declined all requests to take land in trust for
    Alaska Natives or Tribes.
        In 1994, several Alaska Villages (Chilkoot Indian
    Association, Native Village of Larsen Bay, Kenaitze Indian
    Tribe) represented by the Native American Rights Fund (NARF)
    submitted a petition requesting that the Department undertake a
    rulemaking to change the existing regulation to allow the
    Secretary to exercise his discretion to acquire land in trust
    for Alaska Natives.
        The Department subsequently published a Notice in the
    Federal Register that it had received the petition and
    requested comments on it by March 6, 1995. Only two comments
    were submitted, and the Department has not undertaken any
    additional actions concerning the petition.

                             bia schools in alaska

        There are 557 federally recognized Tribes in the United
    States. Alaska has 226 of the 557 Federally recognized Tribes--
    almost half of the Nation's Tribes.
        Question. How many of the Tribes outside of Alaska have
    been held to possess ``Indian Country''?
        Answer. We are not aware of any federally-recognized Indian
    Tribe in the contiguous 48 states that does not possess some
    Indian country, by virtue of having a reservation, having
    members with trust or restricted allotments, or being a
    dependent Indian community.
        Question. Today, BIA is financially responsible for 185
    elementary, secondary and boarding schools on 63 reservations
    in 23 States. Do each of those reservations have ``Indian
    country''?
        Answer. As noted above, all land within existing Indian
    reservations is Indian country by definition.
        Question. What would be the impact on the BIA budget if the
    Congress did not continue the annual prohibition on BIA funding
    of grant schools in Alaska?
        Answer. Discontinuation of the annual prohibition on BIA
    funding of grant schools in Alaska would not affect the BIA
    budget because there is an annual prohibition on allowing new,
    previously public schools into the BIA school system in all
    regions of the country as well as an annual prohibition on
    allowing schools to expand their grade structures. These
    prohibitions have been necessary, in the recent climate of
    severe fiscal constraint, in order to avoid diminished funding
    for the schools currently in the system.
        Question. If the 226 Alaska Native communities seek
    recognition of their core township land as Indian country,
    could Alaska Natives seek to have their children educated in
    BIA schools?
        Answer. The current prohibition on BIA funded schools in
    Alaska is not related to the issue of Indian country. While at
    one time BIA operated an extensive elementary and secondary
    school system in Alaska, responsibility for educating Alaska
    Natives was transferred to the state over the course of twenty
    years (1966-1985) as a result of an agreement reached with the
    state in 1964. In fiscal year 1982 and 1983, the Congress
    appropriated over $40 million to the State of Alaska for costs
    of upgrading facilities to complete the transition from Bureau
    operated to state operated schools. (These funds were provided
    in addition to routine school operations and facility repair
    funds for the remaining BIA operated schools in Alaska.) The
    transfer of BIA-funded schools to the state culminated in
    Public Law 98-63, the 1985 Appropriations Act, after extensive
    consultation among the state, the BIA, and the Alaska Native
    community. Public Law 98-63 included a permanent legislative
    provision that prohibits the BIA from funding BIA schools in
    the State of Alaska.
        After enactment of Public Law 98-63, the Tribally
    Controlled Schools Act of 1988 (Public Law 100-297), authorized
    a new program of Tribal grant schools and included Alaska
    Native villages within the definition of ``Tribe'' for purposes
    of the program. On May 21, 1993, the Solicitor made a
    determination that Public Law 100-297 requires funding of grant
    schools for those Alaska Native villages that would be able to
    meet the eligibility requirements of the statute. Since fiscal
    year 1994, Congress has enacted annual appropriations language
    prohibiting funding for BIA grant schools in Alaska.
        Furthermore, the moratorium on allowing new, previously
    public schools into the BIA school system in all regions of the
    country would prohibit BIA schools in Alaska, regardless of any
    determination about the existence of Indian country. All Tribes
    are prohibited from bringing new schools into the BIA school
    system.
        Question. What is the estimated cost to restore BIA schools
    for these 226 communities?
        Answer. As noted above, Public Law 98-63 prohibits the BIA
    from funding BIA schools in Alaska. In 1994, Senator Stevens
    requested a GAO report on the estimated costs of BIA schools in
    Alaska. The GAO's estimate at that time was that there were 200
    schools in Alaska with 70 percent or more Alaska native
    students. Should BIA assume responsibility for these schools,
    GAO estimated that annual School Operations costs would range
    from $150 to $190 million annually. However, there is a
    prohibition on allowing any new schools, regardless of the
    states where they are located, into the BIA system.
        Question. The fiscal year 1998 budget request for operation
    of 185 BIA schools is $450 million. That works out to about
    $2.4 million per school annually. Alaska costs are much higher
    than average costs in the ``South 48.'' Have you taken that
    into account in answering the previous question?
        Answer. The 1994 GAO estimate of cost ranged from $150 to
    $190 million to support School Operations in Alaska included a
    25 percent adjustment.
        Question. How much does BIA spend per student under the
    Indian School Equalization Program (ISEP)--which is formula-
    based funding for the 185 Bureau operated, grant, contract,
    elementary and secondary schools?
        Answer. The fiscal year 1996 funding level provided about
    $5,300 per student for the ISEP program in School Year 1996-97.
        Question. Has the Administration or the Department of the
    Interior or BIA made any statement relative to resuming
    responsibility for BIA schools in Alaska? If so, please provide
    a copy of any such statement(s) to the Committee.
        Answer. During Conference action on the fiscal year 1995
    Interior Appropriations bill, the Department supported the
    Senate proposal to limit the number of BIA funded schools in
    order to secure stabilized funding for the school system in
    existence at the time. The Conference managers adopted the
    Senate bill language into law. Tribes residing in all states
    are prohibited from bringing new schools into the BIA school
    system. A copy of the fiscal year 1995 effect statement, which
    presents the Department's position, is attached. The Bureau has
    supported the proposal since that time.
                                    ------

                                  Attachment 1

                       effect of house and senate action

        Activity/Subactivity: Other Recurring Programs/Education.
        Bill language which limits the number of Bureau-funded
    schools to 187.
        House action: The House did not address this item.
        Senate bill Language: ``Provided further, That funds made
    available, in this Act and hereafter, for schools funded by the
    Bureau of Indian Affairs shall only be available to the 187
    schools which will be in the Bureau of Indian Affairs school
    system as of September 1, 1995.'' (p. 33, lines 9-13)
        Senate report statement: ``Bill language has been included
    which limits the number of schools to be funded to 186 [sic]
    schools for fiscal year 1995 and future years. With the limited
    resources available to the Committee in fiscal year 1995 and
    for the foreseeable future, the Committee does not support
    adding additional schools which will result in diminished
    funding for schools currently in the system. Given the
    tremendous backlog for facilities maintenance and improvement
    projects and new school construction, the Committee cannot
    support the increased demand for these already insufficient
    resources, which would result by adding more schools to the
    system. This limitation of funding to schools included in the
    fiscal year 1995 budget expands the current exclusion which
    applies only to new schools from Alaska to include all regions
    of the country.'' (p. 58)
        Effect of senate action: The Senate action will help to
    secure stabilized funding for the 187 existing Bureau-funded
    schools.
        Preferred action: The Department strongly recommends that
    the Conference managers adopt the Senate bill and report
    language.

                  tribal courts and law enforcement in alaska

        Alaska is a Public Law 83-280 state, under which the state
    has concurrent jurisdiction with the Federal government over
    general criminal and civil matters, even in Indian country.
        Question. Does the position of BIA on Indian country in
    Alaska permit the 226 Native entities to request funds to
    establish tribal court systems?
        Answer.
        Note: The jurisdictional statement presented above requires
    clarification. The State of Alaska exercises jurisdiction that
    is concurrent to the Tribes in Alaska. Public Law 83-280 did
    not divest the tribes of civil or criminal jurisdiction that
    they otherwise possess.
        The Sansonetti opinion specifically recognized the right of
    Alaska Tribes to regulate internal Tribal relations and to
    exercise authorities granted by Congress, including authorities
    under the Indian Child Welfare Act.
        The 1993 opinion of then-Solicitor Sansonetti concluded
    that Alaska Natives possess the same powers and attributes as
    other Indian Tribes, except to the extent limited or preempted
    by Congress, Solicitor's Opinion M-36975. Like Tribes in the
    contiguous 48 states, Tribes in Alaska perform those functions
    and services that have not been limited or preempted by
    Congress. The Bureau of Indian Affairs' policy within Tribal
    Priority Allocations (TPA) is that federal funds awarded to the
    Tribes may be used for Tribal judicial systems. Alaska Tribes
    have and continue to prioritize funds from their TPA base for
    Tribal judicial systems.
        Question. The State of Alaska is responsible for law
    enforcement and detention centers on Alaska Native lands at the
    present time. Please inform this Committee on the procedure in
    states where there is a Tribal court system. Do such states
    continue to provide state services, or are Tribal systems
    deemed solely the responsibility of Tribes?
        Answer. Until such time as the Tribes reassume
    jurisdiction, the states remain responsible for law enforcement
    and detention and Tribes retain jurisdiction which is
    concurrent to that of the state.
        Due to limited funding, Tribes that exercise exclusive
    criminal jurisdiction may elect to contract with states or
    other Tribes for detention services. In non-Public Law 83-280
    states, many Tribes contract with other Tribes and county or
    municipal governments to provide detention services.
    Historically limited funds were prioritized for those Tribes
    exercising exclusive jurisdiction. As a result, Tribes situated
    in Public Law 83-280 states receive a lower allocation of funds
    for courts and law enforcement.
        A significant increase in funding for Tribal Priority
    allocations would provide Public Law 83-280 and non-Public Law
    83-280 Tribes with the resources to develop judicial and law
    enforcement programs. Many Tribes in the contiguous 48 states
    use Tribal development dollars (i.e., gaming, natural resource,
    development) to underwrite a panoply of governmental services
    including judiciaries and law enforcement.
        Question. My staff tell me that Alaska's Tribes have
    already been using some BIA funding--from the Tribal Priority
    Allocations--to fund Tribal justice and law enforcement. Will
    you please detail how much money has been provided and to which
    Tribal entities?
        Answer. The fiscal year 1998 President's Budget Request
    includes $31,137 prioritized by 29 Alaska Tribes and one agency
    to the Tribal Courts program. The Fairbanks agency and the
    following Tribes chose to place funds in their Tribal Courts
    program: Andreafsky, Atmautluak, Chefornak, Marshall,
    Kuigpagmuit, Nightmute, Platinum, Pitka's Point, Kwinhagak,
    Toksook Bay, Tuluksak, Russian Mission, Lower Kalskag, Upper
    Kalskag, Aniak, Chuathbaluk, Lime Village, Kwethluk IRA,
    Orutsaramuit, Mekoryuk, Kipnuk, Akiak, Akiachak, Kasigluk,
    Kwigillinguk, Newtok, Chistochina, Chitina, Mentasta. No Tribes
    chose to prioritize funding to the Law Enforcement program. In
    addition, Self Governance Tribes negotiated $82,200 for Tribal
    judiciaries.
        Question. If Tribes in Alaska take over various functions--
    juvenile prosecutions, misdemeanors, alcohol control, child
    custody proceeding, fish and game management, environmental
    enforcement--what funds are available for training and support
    to ensure that these functions are adequately carried out?
        Answer. Because Alaska is a Public Law 83-280, the state
    has general criminal and civil jurisdiction for police and
    courts over Indian country. Tribes retain jurisdiction under
    the 1968 Indian Civil Rights Act over misdemeanors, but only
    those that involve Indians, a limitation imposed by the Supreme
    Court. Under Public Law 83-280, states can retrocede their
    jurisdiction back to Indian Tribes. However, for this to
    happen, the Secretary must consult with the Attorney General
    and agree to accept the retrocession. In recent years, the
    Secretary has declined to accept retrocessions due to the lack
    of federal funding.
        In 1988, the Bureau attempted to deny funding for law
    enforcement services in Public Law 83-280 states, but the
    Congress disagreed, directing that the Bureau continue to
    provide such funding in House Report 100-498, 100th Congress,
    First Session, at 891 (1987).
        At this time the only BIA funds currently available for
    Tribal court and law enforcement programs are the funds which
    Tribes prioritize within their Tribal Priority Allocations base
    budgets. This is true for both Alaska Tribes and Tribes in the
    contiguous 48 states. In order to provide more funds for
    judicial and law enforcement programs, Tribes would have to
    reprioritize resources from other programs. Although this is
    not a viable option, it is the only option available at this
    time.
        Currently the State of Alaska is responsible for providing
    law enforcement and detention services on Alaska Native lands.
    The Alaska State Police have developed the Village Public
    Safety Officers (VPSO) program in which local village members
    are provided minimal public safety training and can act as
    first responders to calls for service but they are not
    certified law enforcement officers.
        Question. Alaska Tribes believe Indian country will enable
    Alaska Natives to assume jurisdiction to control the sale of
    alcohol and prosecute those who violate Tribal law. Does the
    BIA have any agreement with the Justice Department regarding
    providing prosecution to back up the Tribes' efforts to do
    their own alcohol control programs?
        Answer. Three villages have liquor control ordinances that
    have been approved and published in the Federal Register as
    required by 18 U.S.C. Sec.  1154. See Chalkyitski, 48 Federal
    Register 21373 (May 12, 1983); Northway, 48 Federal Register
    30195 (June 30, 1983); and Minto, 51 Federal Register 28779
    (August 11, 1986). Many villages wish to affirm that the
    possession, sale and consumption of liquor is illegal. Like
    many Public Law 83-280 Tribes in the contiguous 48 states,
    villages may wish to impose civil, rather than criminal,
    penalties including impoundment, fines and exclusion.
        The Bureau does not have an agreement with the Department
    of Justice to enforce village liquor control ordinances.
    However, the villages may wish to enter into agreements with
    the Assistant United States Attorneys to enforce 18 U.S.C.
    Sec.  1154 which prohibits the sale, possession and consumption
    of alcohol within Indian country.
        Question. Last Congress during passage of welfare reform
    legislation, I offered an amendment, which was accepted,
    limiting Native administration of welfare programs in Alaska to
    the 12 regional non profit corporations and Metlakatla. I took
    this step to make sure that the maximum amount of limited
    federal dollars for needy families would go to provision of
    services, and to avoid unnecessarily high administrative costs
    in a block grant environment. At the time I proposed my
    amendment, I consulted with Native groups in Alaska and gained
    their agreement. Since passage of the welfare reform
    legislation, Native regional non profit corporations have been
    working with the State of Alaska to coordinate development of
    their programs.
        Now I understand the BIA has successfully urged the Justice
    Department to request that my amendment be deleted as part of
    the Administration's comments to the House Ways and Means
    Committee on its technical corrections bill. None of the Alaska
    Congressional delegation have been contacted on this matter by
    either Justice or BIA. I also understand that the Department of
    Health and Human Services, which administers welfare, does not
    have problems with my amendment.
        Please explain (1) the rationale for BIA's objections; and
    (2) why the Alaska Congressional delegation was neither
    notified nor consulted.
        Answer. The Bureau is one of several federal agencies that
    offered recommendations to the Department of Health and Human
    Services (DHHS), the lead agency for welfare reform. The
    Secretary of Health and Human Services and the Commissioner of
    the Social Security Administration proposed technical and
    conforming amendments to the Personal Responsibility and Work
    Opportunity Reconciliation Act of 1996 (PRWORA) in a letter to
    the Chairman of the Committee on Finance dated December 16,
    1996. Among the proposals was a request to amend Section 419A
    of the Social Security Act (as added by section 103(a) of
    PRWORA).
        The Bureau recommended that the Section 419A of the Social
    Security Act definition of Indian, Indian Tribe and Tribal
    organization have the meaning given such terms by section 4 of
    the Indian Self Determination and Education Assistance Act (25
    U.S.C. 450b). The DHHS Child Care Bureau expressed concern that
    the portion of Child Care Development Block Grants (CCDBG)
    funding transferred from the TANF program under section 418
    would make impossible, in the case of Alaska Natives, operation
    of a single unified child care program.
        The Bureau's concern, and that of DHHS, was the
    government's liability. This concern was expressed to the
    Alaska delegation on several occasions. For example, in a
    meeting on February 5, 1997, with Liz Connell of the Committee
    staff and Martha Stewart of the Governor's staff, we discussed
    the constitutionality of special statutes for Indian Tribes and
    the risk of litigation for the DHHS when entities that are not
    on the list of federally recognized Indian Tribes are included
    by definition while federally recognized Tribes are excluded.
    It was recommended to Ms. Connell that limitations in eligible
    beneficiaries be accompanied by sufficient legislative history
    to support the exclusion of beneficiaries that are otherwise
    recognized by special statutes.
        Question. Under 25 U.S.C. Sec.  450b, in the Indian Self
    Determination Act, Indian Tribe in Alaska is described as ``any
    Alaska Native village or regional or village corporation as
    defined in or established pursuant to the Alaska Native Claims
    Settlement Act [43 U.S.C.A. Sec.  1601 et. seq.] * * *.''
    Nothing in that law ranks one type of organization over
    another. Yet, I continue to hear that BIA creates obstacles for
    regional corporations or their designees and continues to give
    preference to ``Alaska Tribes'' in 638 contracts and compacts.
    What is the legal justification for BIA's apparent policy and
    what is its history?
        Answer. Inclusion on the Indian entities list demonstrates
    that the Secretary unequivocally recognizes the Tribal status
    of the listed villages and regional Tribes that are
    acknowledged to have ``the immunities and privileges available
    to other federally acknowledged Indian Tribes by virtue of
    their government-to-government relationship with the United
    States as well as the responsibilities, powers, limitations and
    obligations of such Tribes'' (25 C.F.R. Sec.  83.2). Inclusion
    on the list does not resolve the scope of powers of any
    particular Tribe over land or non-members. It only establishes
    that the listed Tribes have the same privileges, immunities,
    responsibilities and obligations as other Indian Tribes under
    the same or similar circumstances including the right, subject
    to general principles of Federal Indian law, to exercise the
    same inherent and delegated authorities available to other
    Tribes. This position was confirmed by Congress when it enacted
    the ``Federally Recognized Indian Tribe List Act of 1994''.
        Although regional, village, and urban corporations
    organized under state law in accordance with the Alaska Native
    Claims Settlement Act (ANCSA) (43 U.S.C. Sec.  1601 et seq.)
    may be designated as ``Tribes'' for the purposes of some
    federal laws, primarily the Indian Self Determination and
    Education Assistance Act (ISDA), 25 U.S.C. 450(b), they are not
    included on the Departmental list of villages and regional
    Tribes which the Department believes to have functioned as
    political entities, exercising governmental authority. The
    membership of the corporations is defined by a property
    interest. However, village members are in a political
    relationship which is the constitutional foundation for the
    federal programs available to Indians. Morton v. Mancari, 417
    U.S. 535 (1974). The Bureau's policy was recently upheld in
    Cook Inlet Treaty Tribes v Shalala, No. A94-0589-CV (HRH) (D.
    Alaska January 6, 1997).
        Question. I have been made aware that the Central Office of
    the BIA has recently requested a position paper from the Juneau
    Area Office explaining why tribal organizations in urban areas
    of Alaska are entitled to contract/compact under Public Law 93-
    638. We have a long standing history in Alaska of contracting
    in these communities.
        Who is seeking this position paper? For what purpose? With
    what intentions? Is the Bureau attempting to reverse more than
    20 years of precedent in Alaska?
        Answer. The Bureau's Office of Tribal Services inquired of
    the Juneau Area the history of how the service area in Alaska
    has been determined. The inquiry was for information purposes
    only.
                                    ------

                     Question Submitted by Senator Cochran

        The Mississippi Band of Choctaw Indians has two 1930's era
    schools which are overcrowded and unsafe and are in danger of
    losing accreditation because of the deficient and failing
    facilities The BIA priority list for new school construction
    has been frozen for several years; schools on the list are
    still waiting for progress in planning, design or construction;
    schools not on the list, but in need, have no realistic chance
    of action in the foreseeable future. Since the new school
    construction program is proceeding so slowly, the Tribe has
    proposed a fifty percent cost sharing arrangement with the BIA
    for the replacement of the schools. This request was turned
    down by the BIA.
        Question. What can be done to allow a Tribe such as the
    Mississippi Band of Choctaw Indians to pursue a method of
    matching federal funds with tribal funds for school
    construction?
        Answer. The legislative report accompanying the fiscal year
    1994 Interior Appropriations Act requested that the Department
    conduct a study of alternative funding. A Report was submitted
    to the Committee in July 1994. Although the study group
    explored over 20 conceivable options, unfortunately, no
    acceptable method was found at that time mainly because lease
    options, loans and bonding require repayment which is subject
    to appropriation. In the fiscal year 1996 budget the Bureau
    requested appropriations for a pilot project for alternative
    funding. The Omnibus Appropriations Act for fiscal year 1996
    did not include funding for this project.
        The BIA continues to explore a number of alternatives that
    may in the future provide viable means to facilitate more
    construction and repair of high priority BIA ranked projects,
    as described below.
        (1) Cost sharing of construction expenses by the tribes/
    schools and BIA for repair or replacement of existing
    facilities.
        (2) Bonding legislation that would be available to the
    Tribes and acceptable to OMB, DOI, and BIA.
        (3) Support of the Administration school reconstruction
    initiative, which proposes $5 billion dollars over four years
    for nationwide school construction and renovation, with a set-
    aside provided for Indian schools.
        (4) Expanded use of the existing portable classroom program
    to address problem areas such as increased enrollment,
    programmatic space, and unsafe and unhealthy classrooms.
        (5) A Lease-purchase program has been considered in the
    past, however, due to the scoring requirements by OMB it was
    determined infeasible. Legislation and/or policy changes could
    enhance prospects for this alternative in the future.
        The above are some of the alternatives that, if they were
    appropriately structured and become available, would stretch
    the BIA construction dollars to cover more projects. At the
    present rate of deterioration and with a constrained budget
    that has not kept up with aging buildings, more emphasis will
    continue to be placed on addressing the most critical
    deficiencies that exist in a particular building/facility.
        In addition, the Bureau's Office of Indian Education
    Programs and Facilities Management and Construction Center have
    discussed alternative funding and intend to consult on the
    matter in the summer consultation meetings with Tribes.
        The Administration has requested $5 billion to address
    facility repair needs for public schools across America with a
    two percent set-aside for the Department of Interior. This
    resource combined with the Bureau's education construction
    budget request will help eliminate the ever-growing backlog of
    repairs in these schools.
        Unfortunately, both the Bureau's and the Department's
    efforts to explore alternative financing options have resulted
    in the finding that there are not many opportunities, mainly
    because lease arrangements, loans, and revenue bonds require
    repayment which is subject to appropriation. The chief way to
    ensure that education construction needs are met is through
    increased appropriations.
                                    ------

                     Questions Submitted by Senator Dorgan

                child protection and family violence prevention

        Question. I am extremely concerned that the Bureau's fiscal
    year 1998 budget request includes no funding for Child
    Protection and Family Violence Prevention under theTribal
    Priority Allocations account. Can you explain how this decision
    was arrived at and what steps the BIA is taking to ensure that
    the prevention of child abuse and neglect is a top priority?
        Answer. In the Bureau's fiscal year 1998 budget, a separate
    line item is requested for Child Protection and Family Violence
    Prevention under the Tribal Priority Allocation (TPA) budget
    activity. This decision was made to give Tribes the ability to
    make prevention a high priority within TPA and redistribute
    funds from other TPA programs or from overall or general
    increases included in appropriations enacted for TPA into this
    new line item. The Bureau is required by the Indian Self
    Determination Act, as amended, to conduct national budget
    hearings with Tribal representatives from the Bureau's twelve
    Area Offices. National Tribal funding priorities are
    communicated to the Bureau at these Hearings. Over the past few
    years, the Tribes have listed TPA programs as their highest
    priority. These national Tribal funding priorities become the
    Bureau's priorities in the submission of the initial annual
    budget request to the Department of the Interior. General
    increases in TPA have been requested so that Tribes can
    prioritize resources to meet their needs at the local level.
    The Bureau has held six annual National Budget Hearings,
    beginning in 1992. The Bureau will continue to support this
    process. Individual Tribes establish individual priorities.
        The Bureau's fiscal year 1998 budget includes a proposed
    general increase of $46.7 million for TPA. If the increase is
    appropriated, Tribes can fund a variety a programs including
    child protection.

                              school construction

        Question. The Ojibwa Indian School, located on the Turtle
    Mountain Reservation, is in desperate need of a new permanent
    facility. There are severe safety deficiencies, asbestos, and
    structural problems in the School's three buildings. In fact,
    the BIA decided in 1994 that these buildings, housing 150
    students, had to be evacuated and the students had to be
    relocated to temporary portable classroom units. However, the
    School currently is not on the BIA's Education Construction
    priority list. Even if it were, though, it would be many years
    before a new school could be built and students could have the
    opportunity to learn in a safe environment. What actions will
    the Bureau take to ensure that the severe education
    construction needs on Indian reservations will be met in a more
    timely fashion, either through creative financing mechanisms
    which would use existing construction and repair funding or
    other proposals?
        Answer. The Bureau is very concerned about the safety
    deficiencies in the Ojibwa and many other Bureau school
    facilities. Of the total backlog of Bureau facility repairs
    ($890 million), $682 million is needed for education
    facilities; $62 million is needed for education quarters; $121
    million is needed for non-education facilities; and $25 million
    is needed for non-education quarters. The new school priority
    list of 16 schools, approved by Congress in fiscal year 1993,
    remains frozen until all schools are funded. The Bureau has
    completed construction of seven new schools. Funding for the
    construction of the Many Farms High School, requested annually
    since fiscal year 1996, has yet to be funded by the Congress.
        The BIA continues to explore a number of alternatives that
    may in the future provide viable means to facilitate more
    construction and repair of high priority BIA ranked projects,
    as described below.
        (1) Cost sharing of construction expenses by the Tribes/
    schools and BIA for repair or replacement of existing
    facilities.
        (2) Bonding legislation that would be available to the
    Tribes and acceptable to OMB, DOI and BIA.
        (3) Support of the Administration school reconstruction
    initiative, which proposes $5 billion dollars over four years
    for nationwide school construction and renovation, with a set-
    aside provided for Indian schools.
        (4) Expanded use of the existing portable classroom program
    to address problem areas such as increased enrollment,
    programmatic space, and unsafe and unhealthy classrooms.
        (5) A lease-purchase program has been considered in the
    past, however, due to the scoring requirements by OMB it was
    determined infeasible. Legislation and/or policy changes could
    enhance prospects for this alternative in the future.
        The above are some of the alternatives that, if they were
    appropriately structured and become available, would stretch
    the BIA construction dollars to cover more projects.
    Unfortunately, both the Bureau's and the Department's efforts
    to explore alternative financing options have resulted in the
    finding that there are not many opportunities, mainly because
    lease arrangements, loans, and revenue bonds require repayment
    which is subject to appropriation.
        In addition, the Bureau's Office of Indian Education
    Programs and Facilities Management and Construction Center have
    discussed alternative funding and intend to consult on the
    matter in the summer consultation meetings with Tribes.
        The Administration has requested $5 billion to address
    facility repair needs for public schools across America with a
    two percent set-aside for the Department of Interior. This
    resource combined with the Bureau's education construction
    budget request will help eliminate the ever-growing backlog of
    repairs in these schools.
        At the present rate of deterioration and with a constrained
    budget that has not kept up with aging buildings, emphasis will
    continue to be placed on addressing the most critical
    deficiencies that exist in a particular building/facility. The
    liability risks to the federal government are serious and
    potentially very costly. At the current time, however, the
    chief way to ensure that there are sufficient and adequate
    educational facilities in Indian Country is through increased
    appropriations.

                     law enforcement facility construction

        Question. The need for correctional facilities in Indian
    Country far exceeds existing resources. For example, on the
    Fort Berthold Reservation, there are 3,000 arrests annually,
    but the jail facility that the BIA leases only houses 8
    inmates. Due to this situation, there essentially is no
    deterrence to crime on the reservation. I am disappointed that,
    despite the substantial backlog in construction projects, the
    fiscal year 1998 budget request contains only $9.1 million to
    construct a jail in Colorado for a Tribe that has been court-
    ordered to immediately address serious facility problems. Can
    you explain what steps the BIA will immediately take to ensure
    that there are sufficient and adequate correctional facilities
    in Indian Country?
        Answer. The Bureau strongly agrees that the need for
    correctional facilities far exceeds existing resources and that
    current facilities are inadequate, overcrowded and outdated.
    The Bureau has sought a coordinated effort by Tribal leadership
    and federal agencies to convince Congress to provide funding
    necessary to build many more adult and juvenile detention
    facilities. Despite this effort, Congress eliminated funding
    for jail construction for fiscal years 1995 through 1997.
        The Bureau is aware of and very concerned about the jail
    facility for the Three Affiliated Tribes, as well as the
    facilities for other Tribes on the Detention Center Priority
    List (list). As the Senator points out, the Ute Mountain
    facility is currently under federal court order to address
    serious health and safety related facility repairs. The fiscal
    year 1998 budget is the third year the Bureau has sought
    funding to construct the Ute Mountain Ute facility, number 5 on
    the list. The Three Affiliated Tribes jail facility is number
    17 on the list. There are facilities ahead of the Three
    Affiliated Tribes awaiting design completion and construction
    funding. No funds have been appropriated for law enforcement
    facility construction since fiscal year 1995. The Bureau can
    only ensure that there are sufficient and adequate correctional
    facilities in Indian country if additional appropriations are
    provided.

                            circle of nations school

        Question. In December, the ND Congressional delegation
    wrote to Secretary Babbitt and OMB Director Raines to urge the
    Administration to secure additional resources for the
    therapeutic model program at the Circle of Nations School in
    Wahpeton, North Dakota. The fiscal year 1998 budget request
    contains no additional dollars. What steps will the BIA take to
    allocate existing or new resources to ensure that the special
    educational, health and psychological needs of the students at
    the Circle of Nations School are met and to ensure the creation
    of a viable model for other Indian educational institutions?
        Answer. The Bureau is aware of the school's effort to
    implement a therapeutic model program. In 1993, 1994, and 1995
    the Bureau has provided additional funds to the school for
    purposes of implementing the model. The additional funds
    provided were above what the ISEP formula generated for the
    school. Due to current fiscal constraints, the Bureau can no
    long provide additional support to the school without
    negatively affecting other Bureau schools. In an effort to help
    the school, the Bureau staff will be working with the school to
    explore several other options such as third party payments for
    some of the children they accept, outside funding from local,
    State, Federal and Tribal organizations whose children attend
    the school and new funding from private foundations. The BIA
    will do all it can to promote the efforts of the school,
    including collaboration with Indian Health Service officials,
    in implementation of the model.

                          impact of funding reductions

        Question. Chairman Russell Mason of the Three Affiliated
    Tribes in North Dakota has contacted me about the negative
    impact that the fiscal year 1997 funding reductions in Tribal
    Priority Allocations has had on social services, tribal court,
    and higher education scholarship programs. What is the actual
    amount allocated to Area Office administration of each of the
    functions and activities related to the programs listed above?
    What is the Area Office reduction compared to agency and tribal
    level reductions in each of these programs?
        Answer. There are no funds allocated to Area Office
    administration for each of the functions and activities related
    to the social services, tribal courts, and higher education
    scholarship programs. These programs are operated by the Tribe
    through Public Law 93-638 contacts funded within the Tribal
    Priority Allocations (TPA) budget activity. The following table
    illustrates the funds allotted to the programs based on the
    Tribe's priorities.

                                                        FUNDS ALLOCATED TO PROGRAMS OF TRIBE'S PRIORITIES
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                            Fiscal year--
                                                                        ------------------------------------------------------------------------------------
                                                                               1995                              1996                              1997
                                                                          appropriation     1996 request    appropriation     1997 request    appropriation
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Social services....................................................         $349,700         $358,600         $345,100         $500,300         $350,300
    Scholarships.......................................................          489,300          512,600          452,800          600,900          494,800
    Tribal courts......................................................          303,200          311,900          254,300          368,000          275,800
                                                                        ------------------------------------------------------------------------------------
          Total........................................................        1,142,200        1,183,100        1,052,200        1,469,200        1,120,900
    --------------------------------------------------------------------------------------------------------------------------------------------------------

        The modest increase provided in 1997 following the 1996
    Conference mark did not bring the overall TPA funding back to
    the 1995 level, which has exacerbated the Tribe's shortfall in
    delivery of these program services.
        Each program under Area Office Operations received an
    equitable reduction of approximately 29 percent in fiscal year
    1996. For fiscal year 1997 there was a reduction of
    approximately 1.7 percent. The following is a comparison of the
    Aberdeen and Bureau wide Area Office Operations recent funding:

                               FUNDING FOR ABERDEEN AND BUREAUWIDE AREA OFFICE OPERATIONS
    ----------------------------------------------------------------------------------------------------------------
                                                                       Fiscal year--
                                     -------------------------------------------------------------------------------
                                           1995                            1996                            1997
                                       appropriation   1996 request    appropriation   1997 request    appropriation
    ----------------------------------------------------------------------------------------------------------------
    Aberdeen........................      $5,883,000      $4,434,000      $4,586,000      $3,485,000      $4,279,000
    Bureauwide......................      54,617,000      54,994,000      36,714,000      36,562,000      38,861,000
    ----------------------------------------------------------------------------------------------------------------

                       National Indian Gaming Commission

    STATEMENT OF ADA E. DEER, ACTING CHAIR
    ACCOMPANIED BY:
            JOSEPH DUTZ, CHIEF FINANCIAL OFFICER
            ALAN FEDMAN, DIRECTOR OF ENFORCEMENT

                                 budget request

        Senator Gorton. Now, I understand that, because we do not
    have the Director, you are going to wear the Indian Gaming
    Commission hat today for our hearing, too?
        Ms. Deer. That is right. I am the interim Chair of the
    Gaming Commission.
        Senator Gorton. Do you have any statement that you would
    like to make as we move into that area?
        Ms. Deer. Yes; I do.
        Senator Gorton. OK, please proceed.

                     summary statement of hon. ada e. deer

        Ms. Deer. Mr. Chairman, members of the committee: Thank you
    for the opportunity----
        Senator Gorton. You are back to one again. [Laughter.]
        Ms. Deer. Thank you for the opportunity to appear before
    you to testify on the fiscal year 1998 budget request of the
    National Indian Gaming Commission. My name is Ada Deer. I am
    the Acting Chair of the Indian Gaming Commission, and with me
    today are members of the NIGC staff: Mr. Joe Dutz, who is the
    Chief Financial Officer, and Mr. Alan Fedman, who is the
    Director of Enforcement. I also wanted to recognize the two
    Associate Commissioners who are here, Mr. Tom Foley from
    Minnesota and Mr. Phil Hogen from South Dakota. Pursuant to 25
    U.S.C. 2706[a][1], the budget for fiscal year 1998 was
    unanimously approved by the Commission.
        With your permission, Mr. Chair, I would like to make brief
    opening remarks and submit my written statement for the record.
        Senator Gorton. Certainly.
        Ms. Deer. Gaming activity has been conducted on Indian
    lands for close to 20 years. Briefly, it has been almost 10
    years since Congress passed the Indian Gaming Regulatory Act
    that created the NIGC, and there has been an immense change in
    the industry during that time period. In just the past 5 years,
    Indian gaming activity and revenues have more than doubled.
        If you would look at the first chart, you will see that
    Indian gaming revenue has grown from just over $2 million in
    1993 to over $5 billion in 1995. During that same time period,
    the funding and the staff of the NIGC have remained relatively
    constant.

                        Indian gaming operations revenues

            Fiscal year                                             Billions
    1993..............................................................  $2.2
    1994..............................................................   3.2
    1995..............................................................   5.3

                                  nigc mission

        The mission of the NIGC, in keeping with the declaration of
    policy of the Indian Gaming Regulatory Act, is to ensure that
    Indian gaming is regulated, to shield it from organized crime
    and other corrupting influences, to ensure that the Indian
    tribe is the primary beneficiary of the gaming operation, and
    to assure that gaming is conducted fairly and honestly by both
    the operator and the player.
        Currently the 33-person NIGC staff is responsible for
    monitoring and regulating gaming in 273 tribal gaming
    establishments operated by 183 tribes in 28 States. Tribal
    governments share in the responsibility for the day to day
    regulation of class II gaming, while many aspects of the
    regulation of class III gaming are controlled by tribal-State
    compacts.
        The NIGC undertakes this regulatory responsibility with an
    operating budget of $4.4 million. In fiscal year 1997 the NIGC
    is undertaking this regulatory responsibility with an operating
    budget of $4.4 million, comprised of a $1 million direct
    appropriation, $1.5 million in fees assessed on class II tribal
    gaming revenue, investigative fees, and unobligated funds from
    prior years.
        It is expected that these prior year funds will be nearly
    depleted at the conclusion of fiscal year 1997, leaving the
    NIGC with anticipated revenue of between $2.5 million and $3
    million in fiscal year 1998. To adequately meet its
    responsibilities under IGRA, NIGC needs additional funds that
    should be obtained through additional user fees, rather than
    through additional appropriations.
        For the last 2 years, NIGC has assessed fees on class II
    tribal gaming at a rate of 0.5 percent of gross revenue. IGRA
    permits assessments under a two-tier scheme, with rates ranging
    from zero to 5 percent. However, there is a $1.5 million
    statutory limitation on the amount of fees that NIGC can assess
    annually on tribal gaming gross revenue. Raising or eliminating
    the statutory cap would permit NIGC to assess fees at a rate in
    keeping with IGRA that would generate additional operating
    funds.
        Assessing fees on class III gaming is another potential
    source of funds for NIGC. Currently NIGC is permitted to assess
    fees only on class II gaming revenue, even though many of our
    enforcement actions involve class III facilities.
        As the next three charts indicate, the majority of our
    activities involve class III gaming ordinances, management
    contracts, and especially enforcement contracts during the past
    year and a half. Being permitted to assess fees on class III
    gaming revenue would help defray the expense of enforcing and
    litigating class III aspects of IGRA.

                Chart 1.--Approved ordinances--by type of gaming

    Class II and III, and III only (percent).......................... 84.47
    Class II only (percent)........................................... 15.53
                            -----------------------------------------------------------------
                            ________________________________________________
          Total, percent..............................................100.00
                            =================================================================
                            ________________________________________________
    Class II and III, and III only....................................   185
    Class II only.....................................................    34

        Chart 2.--Approved gaming management contracts--by type of gaming

    Class II and III, and III only (percent).......................... 79.17
    Class II only (percent)........................................... 20.83
                            -----------------------------------------------------------------
                            ________________________________________________
        Total percent.................................................100.00
                            =================================================================
                            ________________________________________________
    Class II and III, and III only....................................    19
    Class II only.....................................................     5

               Chart 3.--Enforcement actions\1\--by type of gaming

    Class II and III, and III only (percent).......................... 96.67
    Class II only (percent)...........................................  3.33
                            -----------------------------------------------------------------
                            ________________________________________________
        Total percent.................................................100.00
                            =================================================================
                            ________________________________________________
    Class II and III, and III only....................................    29
    Class II only.....................................................     1

    \1\ Since NIGC reorganization in 1996.
    ---------------------------------------------------------------------------

                              status of activities

        NIGC is working with the administration on legislation to
    submit to Congress that incorporates both these concepts. Given
    the scope of the responsibilities of NIGC, as well as the
    growth of the Indian gaming industry, now is the time to ensure
    that NIGC has sufficient funds to fulfil its statutory
    responsibilities.
        In the conference report accompanying the 1996
    appropriations, NIGC was instructed to submit a report to the
    Secretary of the Interior detailing tribal compliance with
    IGRA. The first report documenting compliance as of September
    30, 1996, was sent to the Secretary in November 1996. Few
    tribes were in compliance with all of the items covered in the
    report. However, the report showed that each of the eight
    categories had a compliance rate of at least 50 percent.
        NIGC is committed to 100 percent compliance with IGRA. I
    believe that the tribes also are committed to this goal. That
    commitment is apparent in the preliminary results of the March
    31, 1997, report. As the next two charts show, the next report
    should indicate that there is over 60 percent compliance in
    each category and almost 40 percent of gaming operations are in
    compliance with IGRA. As soon as the report is finalized and
    printed, we will be sending it to you.

                                                GAMING TRIBES INFORMATION
                                                      [In percent]
    ----------------------------------------------------------------------------------------------------------------
                                                                                                       Mar. 31, 1997
                                                                      Sept. 31, 1996   Dec. 31, 1996        \1\
    ----------------------------------------------------------------------------------------------------------------
    Approved compacts...............................................            0.62            0.63            0.70
    Investigative reports...........................................             .49             .80             .87
    Fingerprint cards...............................................             .76             .90             .97
    Employee applications...........................................             .56             .79             .90
    Approved ordinances.............................................             .97             .98             .98
    ----------------------------------------------------------------------------------------------------------------
    \1\ Estimated.

                                                 OPERATIONS INFORMATION
                                                      [In percent]
    ----------------------------------------------------------------------------------------------------------------
                                                                                                       \1\ Mar. 31,
                                                                      Sept. 31, 1996   Dec. 31, 1996       1997
    ----------------------------------------------------------------------------------------------------------------
    Submit fees.....................................................            0.55            0.45            0.79
    Licensed by tribe...............................................             .56             .82             .90
    Submit audits...................................................             .61             .66             .86
    ----------------------------------------------------------------------------------------------------------------
    \1\ Estimated.

                             enforcement activities

        From 1991 to 1996, NIGC issued eight formal enforcement
    documents. Since the beginning of 1996 when NIGC underwent a
    reorganization, the NIGC has opened 30 new enforcement cases
    and issued eight notices of violation.
        In addition to these formal enforcement actions, NIGC also
    worked with tribes to resolve a number of disputes that
    threatened the financial integrity of the gaming operations.
    These included disputes between the tribe and its management
    contractor, as well as disputes between rival factions within a
    tribe.
        NIGC expects a further acceleration of its enforcement
    program during the next 6 months. The NIGC will continue to
    give enforcement priority to cases involving individuals and
    companies managing tribal gaming operations without an approved
    management contract and will continue to investigate and take
    action against gaming operations offering class III gaming
    without approved tribal-State compacts.
        During the last year, NIGC has undergone a number of
    changes. The staff has been reorganized, budget and management
    review processes have been undertaken, and personnel, internal
    management, and travel procedures in keeping with applicable
    Federal law and regulations have been implemented.
        With each of these actions, it has become increasingly
    apparent that the NIGC needs additional funds to fulfill its
    mandate to enforce IGRA. It is my hope that you will support
    our fiscal year 1998 budget request of $1 million and our
    legislative efforts to lift or eliminate the statutory cap on
    fees and to include class III gaming revenue in the fee
    assessment structure.

                               prepared statement

        I believe that, with the increased funds our legislative
    initiative will raise, the next chair of the NIGC will be able
    to expand the enforcement of the Indian Gaming Regulatory Act
    to better accomplish the agency's regulatory mission.
        Thank you and we welcome your questions.
        [The statement follows:]

                     Prepared Statement of Hon. Ada E. Deer

        Mr. Chairman, Members of the Committee, thank you for the
    opportunity to appear before you today to testify on the fiscal
    year 1998 Budget Request of the National Indian Gaming
    Commission. My name is Ada E. Deer, and I am the Acting Chair
    of the National Indian Gaming Commission (NIGC). The budget
    submitted to you for Fiscal 1998, pursuant to 25 U.S.C. Sec.
    2706(a)(1), was unanimously approved by the Commission.
        Gaming activity has been conducted on Indian lands for
    close to twenty years. Briefly, it has been almost ten years
    since Congress passed the Indian Gaming Regulatory Act (IGRA)
    that created the NIGC and there has been an immense change in
    the industry during that time period. In just the past five
    years Indian gaming activity and revenues have more than
    doubled. During that same time period the funding and the staff
    of the NIGC have remained relatively constant.
        The mission of the NIGC, in keeping with the declaration of
    policy of the IGRA, is to ensure that Indian gaming is
    regulated, ``to shield it from organized crime and other
    corrupting influences, to ensure that the Indian tribe is the
    primary beneficiary of the gaming operation and to assure that
    gaming is conducted fairly and honestly by both the operator
    and the player.''
        Currently, the NIGC is responsible for monitoring and
    regulating gaming in 273 tribal gaming establishments operated
    by 183 tribes in 28 states. Tribal governments share in the
    responsibility for the day-to-day regulation of class II
    gaming, while many aspects of the regulation of class III
    gaming are controlled by tribal/state compacts.
        The 33 person staff of the NIGC is responsible for: (1)
    monitoring gaming operations on a continuing basis; (2)
    approving all contracts for the management of gaming operations
    by non-tribal parties; (3) conducting background investigations
    on individuals and entities with a financial interest in, or
    management responsibility for, a class II or a combined class
    II/III gaming management contract; (4) approving all gaming
    related tribal ordinances; (5) reviewing background
    investigations of key gaming employees conducted by the tribes;
    (6) reviewing and conducting audits of the books and records of
    the gaming operations; and (7) initiating enforcement actions
    to help ensure the integrity of Indian gaming operations.
        In fiscal year 1997, the NIGC is undertaking this
    regulatory responsibility with an operating budget of $4.4
    million comprised of a $1,000,000 direct appropriation,
    $1,500,000 in fees assessed on class II tribal gaming revenue,
    investigative fees and unobligated funds from prior years. It
    is expected that these prior year funds will be nearly depleted
    at the conclusion of fiscal year 1997, leaving the NIGC with
    anticipated revenue of between $2.5 and $3 million in fiscal
    year 1998.
        To adequately meet its responsibilities under the IGRA, the
    NIGC needs additional funds that should be obtained through
    additional user fees rather than through additional
    appropriations. For the last two years, the NIGC has assessed
    class II tribal gaming at a rate of 0.5 percent of gross
    revenue. The IGRA permits assessments under a two-tier scheme
    with rates ranging from zero to 5 percent. However, there is a
    $1,500,000 statutory limitation on the amount of fees the NIGC
    can assess annually on tribal gaming gross revenue. Raising or
    eliminating the statutory cap would permit the NIGC to assess
    fees at a rate, in keeping with the IGRA, that would generate
    additional agency operating funds.
        Assessing fees on class III gaming is another potential
    source of funds for the NIGC. Currently, the NIGC is permitted
    to assess fees only on class II gaming revenue even though many
    of our enforcement actions involve class III facilities. Being
    permitted to assess fees on class III gaming revenue would help
    defray the expense of enforcing and litigating class III
    aspects of the IGRA.
        The NIGC is working with the Administration on legislation
    to submit to Congress that incorporates both of these concepts.
    Given the scope of the responsibilities of the NIGC, as well as
    the growth of the Indian gaming industry, now is the time to
    ensure that the NIGC has sufficient funds to fulfill its
    statutory responsibilities.

                              compliance with igra

        In the Conference Report to H.R. 3019, the Appropriations
    for fiscal year 1996, the NIGC was instructed to submit a
    report to the Secretary of the Interior: ``detailing those
    Indian tribes or tribal organizations with gaming operations
    that are in full compliance, partial compliance, or non
    compliance with the provisions of the Indian Gaming Regulatory
    Act (25 U.S.C. 2701 et seq.).''
        The first report, documenting compliance as of September
    30, 1996, was sent to the Secretary in November 1996. It
    covered the major compliance obligations for gaming tribes,
    including: (1) obtaining a tribal-state compact approved by the
    Secretary of the Interior (DOI) prior to conducting class III
    gaming; (2) submitting investigative reports and suitability
    determinations on each key employee and primary management
    official summarizing the results of the tribal background
    investigation; (3) submitting finger print cards to the NIGC
    for processing; (4) submitting gaming employee applications to
    the NIGC at the commencement of employment; (5) adopting a
    gaming ordinance that has been approved by the NIGC; (6) paying
    a fee assessment to the NIGC based on class II revenues; (7)
    issuing a separate license for each facility where gaming is
    conducted; and (8) submitting an annual independent audit of
    the gaming operation to the NIGC. Few tribes were in compliance
    with all of the items covered in the report; however, the
    report showed that each of the eight categories had a
    compliance rate of at least 50 percent.
        The NIGC is committed to 100 percent compliance with the
    IGRA. Due to limited resources, voluntary compliance with the
    IGRA has been emphasized by the NIGC. This emphasis and agency
    outreach efforts were increased after the first report. Those
    efforts utilized the majority of NIGC enforcement resources and
    included letters and telephone calls to each tribe as well as
    on site visits where possible. In addition, the NIGC held a
    compliance workshop in January to outline compliance
    procedures. More than three hundred representatives of seventy
    tribes were in attendance. At that workshop, it was announced
    that any tribe not in compliance as of March 31, 1997, would be
    subject to enforcement action unless they had executed a
    memorandum of understanding (MOU) with the NIGC to come into
    compliance by an agreed upon date. Depending on the severity of
    the violation, NIGC enforcement action for non compliance could
    be the issuance of a closure order or a civil fine of up to
    $25,000 a day for each violation by a tribe.
        In late March, the NIGC released the results of the report
    for the period ending December 31, 1996. Although there was
    substantial improvement in certain categories, especially those
    involving background investigations, the level of total
    compliance was still low. It is our hope that the next report,
    which will be as of March 31, 1997, will show that more than 50
    percent of operations are in total compliance with the IGRA.

                                  enforcement

        From 1991 to 1996, the NIGC issued eight formal enforcement
    documents. Since the beginning of 1996, when the NIGC underwent
    a reorganization, the NIGC has opened 30 new enforcement cases
    and issued eight Notices of Violation. These cases address a
    wide range of violations including: tribes that have failed to
    perform background investigations on key employees, tribes that
    are operating without an approved ordinance, operations engaged
    in illegal pull tab sales, operations which are not licensed by
    the tribe, tribes conducting class III gaming without a compact
    with the state, operations being managed by contractors whose
    agreements have not been approved, and operations maintained in
    a manner that could threaten the health and safety of the
    public.
        In addition to these formal enforcement actions, the NIGC
    also worked with tribes to resolve a number of disputes that
    threatened the financial integrity of the gaming operations.
    These included disputes between the tribe and its management
    contractor as well as disputes between rival factions within a
    tribe.
        To date, the NIGC has imposed $2,950,000 in civil fines and
    assessments. These fines are deposited in the general fund of
    the U.S. Treasury, or in special circumstances, are payments
    from management contractors to the tribes.
        The NIGC expects a further acceleration of its enforcement
    program during the next six months. The NIGC will continue to
    give enforcement priority to cases involving individuals and
    companies managing tribal gaming operations without an approved
    management contract and will continue to investigate and take
    action against gaming operations offering class III gaming
    without approved tribal-state compacts.

                     reorganization and management controls

        During the last year the NIGC has undergone a number of
    changes. In 1996, the staff structure was reorganized to better
    address enforcement actions. Early in fiscal year 1997, a
    budget and management review process was implemented that
    resulted in changes to internal processes and procedures, and
    the Office of General Counsel also streamlined legal review
    processes. As a result of these actions, the NIGC reduced the
    time required to complete background investigations to less
    than six months, reduced the time for the final legal review of
    contracts to less than a month, reduced the backlog of
    contracts under review, and increased the number of finger
    print cards processed to sixteen hundred a month.
        Within the last few months, the NIGC has implemented
    personnel, internal management and travel procedures in keeping
    with applicable federal law and regulations. A complete
    analysis of the fee assessment program has begun in order to
    develop a plan of action regarding the overpayment of class II
    fees. The NIGC has worked with the Office of Fiscal Services at
    DOI to ensure the proper accounting of assets and liabilities
    and to develop a procedure to begin billing for background
    investigations. In addition, the amount of deposit required for
    management background investigations has been analyzed, an
    analysis of the billing rate for finger print cards has begun,
    and a more substantive review of the audits submitted by the
    tribes has been implemented.
        With each of these actions, it has become increasingly
    apparent that the NIGC needs additional funds to fulfill its
    mandate to enforce the IGRA. It is my hope that you will
    support our fiscal year 1998 budget request of $1,000,000 and
    our legislative efforts to lift or eliminate the statutory cap
    on fees and to include class III gaming revenue in the fee
    assessment structure. I believe that, with the increased funds
    our legislative initiatives will raise, the next Chair of the
    NIGC will be able to expand the enforcement of the Indian
    Gaming Regulatory Act to better accomplish the Agency's
    regulatory mission.
        Thank you for the opportunity to testify on behalf of the
    NIGC.
                                    ------

                    Biographical Sketch of Hon. Ada E. Deer

        Ada E. Deer is a member of the Menominee Indian Tribe of
    Wisconsin. Ms. Deer was nominated by President Clinton on May
    11, 1993, to be Assistant Secretary of Indian Affairs and
    confirmed by the United States Senate on July 16, 1993. On
    January 31, 1997, she was selected by President Clinton to be
    the Acting Chair of the National Indian Gaming Commission.
        She is the first woman to hold the position of Chair of the
    National Indian Gaming Commission. Her appointment, which was
    done under the Vacancy Act, will be for 120 days from the date
    of the appointment. Ms. Deer has indicated she does not wish to
    be nominee for the position of Chair of the NIGC.

                                funding proposal

        Senator Gorton. Has the administration submitted a bill to
    accomplish those goals that you so eloquently outlined?
        Ms. Deer. Yes; there is a legislative initiative.
        Senator Gorton. Really?
        Ms. Deer. That is part of the budget discussions.
        Senator Gorton. I am not aware of a bill in the Indian
    Affairs Committee on the subject. But in any event, we are
    going to have something? You are getting an answer from one of
    your staff.
        Ms. Deer. I guess there has been discussion, but it has not
    been formally submitted.
        Senator Gorton. Well, I would urge you to submit it
    formally and promptly, because I think you are probably going
    to get a favorable response to it, either through the regular
    authorization process, or it is even possible that it might
    happen in the appropriation process.
        Ms. Deer. Yes.
        Senator Gorton. Let me ask you this. If the cap were lifted
    and we permitted collections from class III gaming, would that,
    for 1998, obviate the necessity for any general fund
    appropriation at all?
        Ms. Deer. I think we would have to study this. But it would
    certainly be a wonderful change.
        Senator Gorton. Well, it would certainly help if we were
    able to use that million dollars for some other purpose by
    letting the Commission be essentially self-supporting, whether
    subject to appropriation or not. Presumably these fees could
    bring in a sufficient amount of money adequately to fund the
    Commission, could they not?
        Ms. Deer. Yes; that is true.
        Senator Gorton. Well, in any event, we would like to see a
    precise proposal as soon as you possibly can come up with it. I
    understand that the total amount of money that this Commission
    spends is considerably less than that of many individual State
    gambling regulatory commissions. Is that not the case?
        Ms. Deer. Yes; our current budget is about $4.4 million. I
    know that one State spends approximately $50 million--that is
    New Jersey--to regulate.
        Senator Gorton. I understand Nevada is about $21 million.
    My own State, which does not have open gambling, is $10
    million. So certainly the Commission is relatively modest in
    its size as against the responsibilities it has.
        What percentage of all the gambling in the United States,
    legal gambling in the United States, is conducted by Indians?
        Ms. Deer. I think it is approximately 10 percent.

                          compliance with regulations

        Senator Gorton. You have indicated optimism with respect to
    compliance, but it does seem to me rather shocking that we are
    only roughly at the 60-percent level of Interior-approved
    State-tribal gambling compacts. Does that not indicate that
    there is a great deal of gambling activity being conducted by
    Indians that is not approved, not subject to compacts or not
    otherwise approved?
        Mr. Fedman. There certainly are a large number of gaming
    operations doing class III gaming activities without compacts.
    But it is a very complex situation that varies from State to
    State and it turns on questions of State law. Most of the
    numbers, the large numbers, are in States where there is reason
    to have optimism that compacts will be concluded in the very
    near future, and there are some encouraging developments in
    California, which has the largest number of gaming operations
    without compacts. New Mexico has come very close to resolving
    the compact issue.
        So, the percentage of class III gaming activities operating
    without a compact should be reduced significantly in the course
    of the next year if things continue as they are now.

                              gaming in california

        Senator Gorton. Well, let me ask you. Why do you not give
    me some details about California? It obviously is very
    important. What is the present status in California? Does the
    Commission support the Department of Justice action to require
    State compacts by the first of next month or to shut down much
    of what is going on now?
        Mr. Fedman. The situation in California is so fluid, it
    depends on who you talk to from day to day as to what has
    happened. But from what I am hearing, there are encouraging
    developments about the compact negotiations. The States and the
    tribes appear to have resolved every issue except the precise
    gaming technology that would be authorized to be played, which
    I know is the key question.
        But I also hear that there is some encouragement there,
    that they are coming closer together. Nobody is getting exactly
    what they want, but there appears to be a good chance of
    reaching an agreement on the scope of gaming issue. So, if that
    issue can be resolved, they will enter into a model compact
    with the Pala Tribe and that compact will then presumably be
    adopted by the other tribes in California.
        There is some division, I understand, developing within
    those tribes. Not everyone is crazy about what looks like it is
    going to be in the Pala compact.
        Senator Gorton. What is the reason that, after all this
    time, you are so optimistic? Does it relate to the change in
    relative bargaining ability between States and tribes out of
    last year's Seminole Tribe of Florida v. Florida decision or
    the recent decision, I think it is a ninth circuit decision in
    Oregon?
        Mr. Fedman. Well, it does--what happened does involve legal
    decisions, but it was not either one of the two that you
    mentioned. In my opinion, the problem in California has always
    been confusion about what the State law permitted in terms of
    the gaming. And there was a State supreme court case, which is
    commonly referred to as the Western Telecom case, which for the
    first time set down parameters that both the tribes and the
    State could agree defined the permissible scope of gambling in
    California.
        The decision was so significant that when it came out our
    Commission adopted a policy that it no longer believed that the
    state of the law in California was unclarified. Therefore, any
    gaming operation opened after the Western Telecom decision had
    been issued that did not approximate the standard of gaming
    defined in that case would be targeted for enforcement.
        Once this Western Telecom decision came out, there appeared
    for the first time a meeting of the minds as to what was legal
    in California, and that really triggered the compact
    negotiations.
        Senator Gorton. So you are optimistic about settling this
    longstanding dispute in California in the relatively near
    future?
        Mr. Fedman. I would be the first to say that what I hear is
    that the talks go up and down, but they look very promising
    right now.

                               seminole decision

        Senator Gorton. Well, let me go back to the Seminole
    decision. Now that we have had it for more than 1 year, what
    have its impacts been? Is it affecting the number of compacts
    or the terms of compacts? Certainly it gave States more
    authority. Does that mean that the States by and large have
    been more restrictive, saying ``no'' more frequently?
        Mr. Fedman. I think that is fair to say, that the effect of
    the Seminole decision has been that States that do not want to
    negotiate have simply said ``no.'' We are hearing a lot of
    complaints and concerns from tribes that say that this is just
    simply not fair. After the Seminole decision, if a State wants
    to call off the talks, they are in a position to do that.
        So far, that has not resulted in any new unauthorized
    gaming. I think the frustration level is high, and there is a
    great hope on the part of the tribes that the Interior
    Department will develop its own procedures.
        Senator Gorton. Well, that was my next question. The
    Department did make such a proposal last year. It caused a
    great deal of furor and opposition, and it certainly has
    delayed implementation. What is the current status? Is the
    Department seriously considering regulations that would try to
    avoid the impact of the Seminole case?
        Mr. Fedman. I am really not in a position to answer that,
    Senator. That is completely within Interior and we are not
    really part of that.
        Senator Gorton. We have to ask the Secretary that question,
    that is what you are telling me?
        Mr. Fedman. I think so. I would rather you ask him than me.
        Senator Gorton. OK. Can you answer the question or can Ms.
    Deer answer the question of whether there are any efforts being
    undertaken by the administration to negotiate amendments to the
    basic statute itself that are acceptable to the Governors of
    the States? I can remember years of hearings on the subject in
    the Indian Affairs Committee, but no action. Obviously, the
    Seminole decision has caused proposed changes within the
    Department of the Interior itself. But has it caused any
    negotiations to take place between the administration and the
    Governors as far as any of you know?
        Ms. Deer. Not as far as I know. The Department is still
    receiving or analyzing the comments that have been requested.
        Senator Gorton. But that is for new regulations, not for
    negotiations with the States.
        Ms. Deer. That is right.

                              gaming in washington

        Senator Gorton. Well, as is usually the case, for each of
    you I have a parochial question. Obviously, I learn more about
    what is going on in Washington than I do in most of the States,
    and you have created quite a furor on and off the Colville
    Reservation in north central Washington with an attempt to
    close down taverns that I believe are located within the city
    of Omak, on fee land, but inside the exterior borders of the
    reservation, that are operating totally and completely in
    compliance with State law, as they have for many years. At the
    same time the Commission has ignored the obviously illegal slot
    machines that are being managed by the Colville Tribe without
    any compact or shred of legal authority whatsoever.
        I would sure like your comments on that. That seems to be a
    rather perverse set of priorities.
        Mr. Fedman. We were taken aback somewhat by the furor that
    arose when we issued those letters, because this is certainly
    not the first time or the first State in which we have taken
    action. From our perspective, what we saw on the Colville
    Reservation were five establishments that were doing class III
    gaming without a license from the tribe or a tribal-State
    compact.
        Senator Gorton. It is not class III.
        Mr. Fedman. If you sell pull tabs, you have to, at the same
    location, you also play bingo. The sale of pull tabs without
    the play of bingo is a class III activity. It is a rather
    technical definition but it is, under our regulations, a class
    III activity.
        I can understand the confusion, but nevertheless that is
    how we have treated it all over the country. We saw
    unauthorized gaming without a license from the tribe and
    without a tribal-State compact. Wherever we have seen these
    situations, all over the country, we have done these kinds of
    actions--in Oklahoma, New York, and California. We have treated
    them all the same way. We simply advise the parties that if it
    is on Indian lands then you are required to have a license from
    the tribe and in most cases a tribal-State compact.
        There is quite a bit of legal authority that supports our
    position. The U.S. attorney in Montana several years ago took a
    very similar action on the Flathead Reservation. There were
    video machines being operated by the State of Montana on that
    reservation, and in that case the State agreed with the U.S.
    attorney's analysis, as did the supreme court in Montana, and
    they simply ceased the licensing of those machines.
        In Idaho three tribes sued the State over the same issue,
    and there a Federal district court ruled that if it was on
    Indian lands it was required to have a license from the tribe,
    and a compact. This case involved primarily fee lands, which is
    the same situation as in Washington. The Idaho case was
    confirmed by the ninth circuit and that remains the state of
    the law in the ninth circuit today.
        So, we felt we were on fairly solid legal grounds in taking
    the action on the Colville Reservation. Nevertheless, as soon
    as we issued the letters we were called by the Washington State
    Gambling Commission. Frank Miller called me. I have the highest
    regard for the Washington State Gambling Commission. I think
    they are one of the best State regulatory agencies in the
    country. And I have a personal regard for Frank Miller.
        He said: You have made a terrible mistake, you do not
    understand the law in Washington; we are protesting the action;
    we would like you to stop.
        What we have done, based on the State's objection, is to
    defer any further enforcement on the Colville Reservation until
    such time as the attorney general of the State of Washington
    can file a brief with the Commission pointing out their legal
    arguments. And if we, after looking at what they file, conclude
    that we have made a mistake, then we will certainly not go
    forward.
        That is where the action stands today. We have notified all
    five establishments that the action has been deferred, that
    they can continue to sell pull tabs until we resolve this
    issue. We think that that is a reasonable way to go forward.
    Maybe we have missed something and maybe something applies in
    Washington that we have not seen in another part of the
    country.
        To answer the second part of your question, about why the
    class III gaming goes on at the Colville Reservation, it is
    also a rather complex legal situation. I will try to give you
    the short version rather than the long version. Essentially
    what happened there is that after the Colville and the State's
    lawsuit, in which the Federal district judge ruled that the
    compacting provisions of IGRA were unconstitutional, neither
    side appealed.
        It created a great deal of uncertainty as to the
    applicability of IGRA in that part of the State of Washington.
    The Colville Tribe did not put in class III machines, but the
    Spokane Tribe did. The U.S. attorney went after those machines,
    and he got a preliminary injunction in the district court. The
    Spokane Tribe appealed to the ninth circuit, and the ninth
    circuit issued a stay of the preliminary injunction. Thus, the
    issues about the applicability of IGRA, the illegality of the
    gaming, the scope of Federal authority, is now on appeal to the
    ninth circuit.
        Any action against the Colville Tribe would in all
    likelihood be stayed in the same manner as the issues that were
    stayed in the Spokane case, because essentially the same issues
    would be involved.
        We confer with the U.S. attorney all the time about this
    issue because it is a very frustrating situation. I talked to
    him yesterday, the assistant handling the case, and in his mind
    and in mine it would be a waste of resources to go after
    Colville.
        Senator Gorton. What is the status in the ninth circuit?
        Mr. Fedman. Well, the strangest thing happened. For 2 years
    it was put on the settlement track and it stayed there. Nothing
    happened. It has recently been taken off that track and is now
    being actively reviewed by the court. The briefing schedule is
    moving forward. The U.S. attorney is filing their brief next
    week.
        So the end is in sight, and when that matter is resolved
    then I think you will find that both the U.S. attorney and our
    Commission will be very active in that part of the State.
        Senator Gorton. Well, let me just say, even as a lawyer and
    a former attorney general, that it would be hard to present to
    an ordinary citizen a more bizarre or a more unjust set of
    circumstances than, for whatever reason, a Federal agency
    ignoring open casino class III gambling on a reservation being
    conducted without a compact and at the same time trying to
    close down pull tabs operated in a non-Indian business on the
    land that they own and inside a city, while inside the exterior
    borders of a reservation.
        If you try to sell that as an appropriate regulatory
    activity, you are going to have a very difficult time, because
    fundamentally, whatever the law is, it is not appropriate. So I
    will appreciate, I would greatly appreciate it, if you will
    keep us apprised of all of the progress on both sides, on both
    sides of that equation.
        Mr. Fedman. We certainly will.

                             funding possibilities

        Senator Gorton. I am encouraged, Ms. Deer, about your
    report on progress in the administration to give us really the
    ability to allow the Commission to operate more effectively,
    without asking for more appropriated money out of the general
    fund, and I think you are going to find us most cooperative
    when you come up with precise recommendations to carry out that
    set of ideas.
        Ms. Deer. Well, we certainly appreciate your receptivity.
        Let me say, it has been unusual for you, conducting this
    with a couple of people, Senators, coming in. It has been
    unusual for me to have two hats, too.
        Senator Gorton. Well, you have two hats, both temporary.
        Ms. Deer. That is right.
        Senator Gorton. I admire you for being able to carry on
    under such an ambiguous and indefinite status.
        Ms. Deer. Well, thank you.
        Senator Gorton. Starting a couple of years ago, I began to
    prepare visuals like this of our appropriations bills and
    others. We will leave this up here for you or any of the
    audience. This illustrates in the best way that I possibly can,
    for my own purposes and the purposes of my subcommittee, the
    kind of relative costs of our programs and the value judgments
    that we have to make when we get into a zero sum game, because
    once we have got our allocation it is a zero sum game, and more
    money for one of these important purposes can only come out of
    the pockets of others.
        It is an interesting chart and you are all welcome to come
    up here and look at it. We have a few notebook-sized copies of
    it that we will be happy to distribute.
        Ms. Deer. Thank you very much.

                         Additional committee questions

        Senator Gorton. I think that about exhausts me. We do have
    a few other questions, but I think it is appropriate to submit
    them to you in writing.
        [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 Campbell

        Question. In your March compliance report to the Secretary
    of the Interior you indicate that the FBI has informed the
    Commission that there is a backlog of over two million
    fingerprint cards to process and that as a result, these
    criminal checks are taking an average two to four months to
    process.
        Is this process a result of a lack of capacity from the FBI
    or a lack of capacity from the Indian Gaming Commission?
        Answer. Based on discussions with representatives from the
    Liaison Unit of the Federal Bureau of Investigation (FBI), the
    fingerprint card backlog is now approaching nearly three
    million. This number includes criminal and civil fingerprint
    cards. The backlog is largely attributed to the relocation of
    fingerprint processing from Washington, DC. to their new
    facility in Clarksburg, West Virginia. The average turnaround
    time to receive the completed FBI checks is two to four months.
        Processing fingerprint cards to and from the FBI is one of
    the NIGC's top priorities. It is NIGC policy to process
    fingerprint submissions from tribal governments within two
    weeks of receipt, barring any unforeseen circumstances.
    Likewise, the NIGC processes FBI record check results on a
    weekly basis so that the results are returned to tribal
    governments as quickly as possible. With an increase in
    resources and personnel, the NIGC could improve its internal
    fingerprint processing time.
        FBI representatives have advised the NIGC that they are
    implementing a 24 hours a day, seven days a week work schedule
    in an effort to reduce the backlog. As a result, the NIGC has
    seen some improvement in the response time. A recent check of
    NIGC records indicates that current turnaround time for
    fingerprint processing averages six to eight weeks.
        Question. Do you suggest any alternative way that would
    enable this process to be expedited?
        Answer. The analysis of fingerprint records and the
    completion of background investigations are key components in
    the safeguarding of Indian gaming. Careful scrutiny of these
    documents is essential and time consuming. Although the FBI is
    experimenting with the electronic submission of fingerprint
    cards, it is our understanding that the electronic submission
    for non-criminal justice purposes is at least several years
    away.
        Question. I noticed in your compliance report that several
    tribes were currently not in compliance with regard to ``Class
    II Fees paid to the Gaming Commission.
        Understanding, of course, that the compliance report
    reflects only a snapshot in time, I am interested to know what
    are some of the factors that result in tribes not coming into
    compliance with Fee payment.
        Answer. The major factor is timeliness of the payments.
    NIGC regulations state, ``The quarterly statements shall be
    transmitted to the NIGC to arrive no later than the due date''
    (25 C.F.R. Sec.  514.1(c)(4)) and ``Each Class II gaming
    operation shall determine the amount of fees to be paid and
    remit them with the statement'' (25 C.F.R. Sec.  514.1(c)(5)).
    Quarterly statements and payments are due March 31, June 30,
    September 30 and December 31. If the NIGC is not in receipt of
    the quarterly statement and the payment by the due date, the
    tribe is shown as being in noncompliance in the fee payment's
    category. Historically many fee payments do not reach the NIGC
    by the due date.
        In addition, tribes often fail to submit quarterly
    statements of assessable gross revenues along with the fee
    payments. Total compliance requires the timely submission of
    both quarterly statements and quarterly payments. Tribes are
    required to submit quarterly statements even if no fee payment
    is due. For example, the fee assessment is based on the
    previous calendar year's assessable gross revenue figures. When
    a tribe first begins a gaming operation, they should be
    submitting to the NIGC on a quarterly basis a statement that
    shows zero assessable gross revenues for the previous calendar
    year.
        Last, a few tribes submit nothing. These include tribes who
    have failed to pay fees from the beginning, and tribes who were
    paying fees and then stopped for various reasons.
        Question. You indicated in your testimony that during the
    last two years, the Commission assessed class II tribal gaming
    at a rate of one-half on one percent of gross revenue when
    statutorily the Commission could assess rates up to 5 percent.
        Is the existing cap of $1.5 million the primary reason for
    setting assessment rates at their current level?
        Answer. Yes. Even at the current 0.5 percent fee rate, the
    NIGC still collects amounts in excess of the $1.5 million cap
    included in the IGRA.
        Question. Has the Commission projected what revenue would
    be generated at higher rates up to the statutory maximum of 5
    percent?
        Answer. Yes, the NIGC has calculated the amount of fees
    that could be generated at fee rates up to the statutory
    maximum of 5 percent on class II gaming revenues. These fees
    would be based, in keeping with NIGC regulations, on a
    percentage of assessable gross revenues from tribal gaming
    operations.
        The class II fee base for the 1997 calendar year, based on
    quarterly statements of assessable gross revenues provided by
    the tribal gaming operations to the NIGC through March 31,
    1997, is $595,829,291.77. The NIGC is aware that this figure
    includes revenues from non class II gaming that is not subject
    to fee assessment. Thus, it is inappropriate to utilize this
    figure as the base number for final NIGC revenue projections.
    The final base number could be as low as $300,000,000 or
    slightly higher than the amount reported through March 31,
    1997.
        Given these two extremes, an average of $450,000,000 could
    be a reasonable figure for calculating an NIGC revenue
    projection. Using this average as the base figure would yield
    potential revenue from a low of $2.25 million at .5 percent to
    a high of $22.5 million at 5 percent. This is in comparison to
    the $20.7 million fiscal year 1997 Budget of the Nevada Gaming
    Control Board and the $52 million appropriated by the State of
    New Jersey to fund its regulation of gaming.
        Question. You indicated in your testimony that you
    currently have a staff of 33 people. How many of these
    individuals are operating in the field?
        Answer. To cover the 28 states with Indian gaming, the NIGC
    currently has seven staff members operating in the field. Each
    works out of an office maintained in their home.
        Question. How many are located here in your Washington
    Office?
        Answer. Excluding the Acting Chair (part-time) and the two
    Associate Commissioners, there are 25 people located in the
    Washington office.
        Question. How many individuals do you have on your staff
    that are devoted primarily to enforcement efforts and following
    through with collections of fines and assessments?
        Answer. Of the entire NIGC staff, twelve employees are in
    the Enforcement Division. Of this total, seven are devoted
    directly to field investigation and enforcement efforts. The
    estimated fiscal year 1997 expenditure for this section of the
    Enforcement Division is slightly less than $1 million. Issues
    concerning fee assessments are dealt with by two Washington
    staff members in the Administrative Division.
                                    ------

                     Questions Submitted by Senator Cochran

        Question. The Mississippi Band of Choctaw Indians operates
    a class III gaming operation and has, in addition to its
    arrangement with the State, its own Indian Gaming Commission.
    In each NIGC report, the Choctaws have been found to be in
    complete compliance with the Indian Gaming Regulatory Act.
        Has the Commission found a correlation between those tribes
    that have set up their own regulatory agencies and
    effectiveness in compliance?
        Answer. The NIGC believes that there is a definite link
    between the existence of tribal gaming commissions and the
    quality of the regulation within an Indian gaming operation.
    Those tribes which have strong, well funded gaming commissions
    are much more likely to have established a strong compliance
    record.
        Question. What are the budgets of the successful tribal
    gaming commissions?
        Answer. The budgets of tribal gaming commissions vary
    dramatically depending on the size of the gaming operation.
    Information received from some tribal gaming commissions
    indicates that funding levels can range from $20,000 to
    hundreds of thousands of dollars. While the level of funding is
    a significant issue, other factors such as the regulatory
    experience of the commission members and the independence of
    their authority, appear to be more important predictors of a
    successful gaming commission.
        Question. What actions has the Commission taken to support
    tribal regulatory agencies in meeting the requirement of their
    compacts?
        Answer. The NIGC has taken a number of actions supporting
    tribal gaming commissions including publishing of a bulletin
    advising tribes how to establish and operate such a commission,
    holding workshops and conferences on the subject of tribal
    gaming commissions, and speaking at conferences of
    organizations consisting of tribal gaming regulators. The NIGC
    does not have the authority to enforce the requirements of
    tribal/state compacts.
        Question. How many Class III tribal gaming operations are
    in compliance today?
        Answer. According to preliminary figures for the quarter
    ending March 31, 1997, there are 99 operations in compliance
    with each of the items on the compliance report. This is a more
    than 30 percent increase in the total compliance rate as of
    December 31, 1996.

                              subcommittee recess

        Senator Gorton. With that, the hearing is recessed.
        Thank you all very much. The subcommittee will stand in
    recess until 9 a.m., Thursday, April 17, when we will receive
    testimony from the Forest Service.
        [Whereupon, at 11:20 a.m., Thursday, April 10, the
    subcommittee was recessed, to reconvene at 9 a.m., Thursday,
    April 17.]

      DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 1998

                                  ----------

                            THURSDAY, APRIL 17, 1997

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 9 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Slade Gorton (chairman) presiding.
        Present: Senators Gorton, Stevens, Cochran, Domenici,
    Burns, Leahy, Bumpers, Reid, and Dorgan.
        Also present: Senator Craig.

                           DEPARTMENT OF AGRICULTURE

                                 Forest Service

    STATEMENT OF HON. JIM LYONS, UNDER SECRETARY, NATURAL
                RESOURCE AND ENVIRONMENT
    ACCOMPANIED BY:
            MIKE DOMBECK, CHIEF, FOREST SERVICE
            DAVID G. UNGER, ASSOCIATE CHIEF, FOREST SERVICE
            JANICE McDOUGLE, ACTING, DEPUTY CHIEF, NATIONAL FOREST SYSTEM
            BARBARA WEBER, ACTING DEPUTY CHIEF, RESEARCH
            JOAN COMANOR, DEPUTY CHIEF, STATE AND PRIVATE FORESTRY
            CLYDE THOMPSON, ACTING DEPUTY CHIEF, ADMINISTRATION
            RON STEWART, ACTING DEPUTY CHIEF, PROGRAMS AND LEGISLATION
            STEVEN SATTERFIELD, DIRECTOR, PROGRAM DEVELOPMENT AND BUDGET
                STAFF

                                 Budget request

        Senator Gorton. The subcommittee will come to order.
        We are meeting today to hear from the Forest Service,
    obviously one of the vitally important agencies funded by the
    Subcommittee on Interior and Related Agencies.
        We are pleased to have Jim Lyons, Under Secretary, and Mike
    Dombeck, Chief of the Forest Service.
        You are both welcome, as are those who accompany you.
        As my colleagues are aware, this subcommittee is
    responsible for funding a diverse array of agencies. A large
    portion of our bill is comprised of the four land management
    agencies: The Park Service, the Bureau of Land Management, Fish
    and Wildlife Service, all of which are in the Department of the
    Interior, together with the Forest Service from the Department
    of Agriculture.
        I want to highlight that fact of being in the Department of
    Agriculture, because I am going to get back to it in a moment.
        It is important to note that the Forest Service represents
    the largest single agency funded by this bill, a full 19
    percent of the money we appropriated for the current fiscal
    year, and, along with the other three land management agencies,
    a full 44\1/2\ percent of the entire bill.
        While these four agencies are significant in the
    subcommittee's funding efforts, there are obviously other
    demands. I have for you, as I have had for the others agencies
    at past hearings, this large chart of the current fiscal year
    and the relative size of the appropriations for each of those
    agencies.
        That indicates, among other things, that once we receive
    our 206B allocation, everything is a zero sum game. Any extra
    money for one agency can only come out of some of the others.
        In any event, Mr. Lyons, you are over there at the base of
    the green line, the large, green bottom portion of it. And that
    is a very significant part of what we do.
        [The information follows:]

    Interior programs fiscal year 1997 enacted

    Land management programs:
        Forest Service......................................  $2,361,000,000
        National Park Service...............................   1,414,000,000
        Bureau of Land Management...........................   1,090,000,000
        Fish and Wildlife Service...........................     653,000,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total.............................................   5,517,000,000
                        ========================================================
                        ____________________________________________________
    Indian programs:
        Indian Health Service...............................   2,054,000,000
        Bureau of Indian Affairs............................   1,606,000,000
        Navajo-Hopi/IAIA/special trustee/Indian gaming/
          Indian education..................................     119,000,000
                        --------------------------------------------------------
                        ____________________________________________________
            Total...........................................   3,779,000,000
                        ========================================================
                        ____________________________________________________
    Science and minerals management programs:
        Geological Survey...................................     739,000,000
        Office of Surface Mining [OSM]......................     272,000,000
        Minerals Management Service [MMS]...................     163,000,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total.............................................   1,174,000,000
                        ========================================================
                        ____________________________________________________
    Energy programs:
        Energy conservation R&D.............................     570,000,000
        Fossil energy R&D...................................     365,000,000
        Naval petroleum NPR/reserves........................     144,000,000
        Energy information administration/economic
          regulation........................................      69,000,000
        Alternative fuels production........................      -4,000,000
        Clean coal technology...............................    -123,000,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total.............................................   1,020,000,000
                        ========================================================
                        ____________________________________________________
    Cultural programs:
        Smithsonian Institution.............................     370,000,000
        National Endowment for the Humanities...............     110,000,000
        National Endowment for the Arts.....................      99,000,000
        National Gallery of Art.............................      60,000,000
        Holocaust Memorial..................................      31,000,000
        Institute of Museum Services........................      22,000,000
        Memorials...........................................      41,000,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total.............................................     733,000,000
                        ========================================================
                        ____________________________________________________
    Interior departmental offices:
        Interior affairs....................................      88,000,000
        Departmental management.............................      58,000,000
        Solicitor...........................................      35,000,000
        Inspector general...................................      25,000,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total.............................................     207,000,000
                        ========================================================
                        ____________________________________________________
          Total bill........................................  12,430,000,000

                                native americans

        Senator Gorton. Another large part of the bill is comprised
    of programs for the benefit of Native Americans, primarily the
    Bureau of Indian Affairs and the Indian Health Service.
        The Indian Health Service is an especially demanding
    responsibility for this subcommittee, as the cost simply of
    maintaining existing levels of medical services increases at an
    annual rate that exceeds inflation and has certainly exceeded
    any additional appropriations that we have received.
        The third major group of agencies in our bill is that
    including the cultural agencies, the Smithsonian, the National
    Gallery of Art, the Kennedy Center, and the National Endowments
    for the Arts and Humanities.
        While these agencies account for a smaller portion of the
    total funds appropriated in the Interior bill, they are in many
    cases the agencies responsible for the care and protection of
    our Nation's heritage. These programs receive vocal support
    from all across the country and from many Senators on both
    sides of the aisle.
        The fourth group of agencies in our bill include the
    Science and Mineral Management Programs, and a fifth major
    grouping consists of programs within the Department of Energy.
        I have broken the bill out this way and provided this
    chart, Mr. Lyons and Mr. Dombeck, so you can see the nature of
    the problems that we have and, therefore, the nature of the
    problems that you have. It is tough competition.
        That competition will become even more fierce if the
    President and Congress are unable to enact a budget that
    includes meaningful entitlement reforms or other measures that
    enable us to achieve balance without relying almost exclusively
    on reductions in discretionary spending.
        If no such agreement is reached between the President and
    Congress, I fear that this subcommittee will be forced to cut
    sharply, many programs and terminate others.
        With regard to the immediate issue of fiscal year 1998, I
    note that the President's request for programs under the
    jurisdiction of this committee is a good $700 million above the
    1997 level.
        Given that a freeze or reduction in total discretionary
    spending is a real possibility, it is clear that some
    reductions from the request level will almost certainly have to
    be made.
        I really look to the two of you and to your assistants for
    help in prioritizing programs when it comes time to make tough
    choices.
        Having said all that, I do want to note that the Forest
    Service fiscal year 1998 increase of 0.3 percent over the 1997
    enacted amount is the smallest requested increase in the four
    land management agencies.
        Enjoy that positive comment about the Forest Service budget
    request, because you may not hear many more such positive
    statements this morning.
        I say that because I am truly concerned about the Forest
    Service. I told you I would get back to the issue of the Forest
    Service being in the Department of Agriculture. I think it is
    fair to say that the Forest Service is undergoing a significant
    transition.
        Last year my colleague, Senator Stevens, questioned why we
    have a Forest Service. Many people scoffed at the thought. This
    year the same issue has been brought up again.
        Over in the House just last month one of the Congressmen
    likened the current Forest Service situation to the Civil War
    and President Lincoln saying to the military, ``If you arent
    going to use the army, I might like to borrow it.''
        It is clear that many people are asking what the Forest
    Service is doing with itself. The agency was placed in the
    Department of Agriculture under the guidance of its founding
    father, Gifford Pinchot.
        Make no mistake about it, Mr. Pinchot's perspective was
    wise use of the resources for the good of the population of the
    United States over the long term.
        Many people now, both in the country and in the Congress,
    feel that the administration has abandoned this concept of wise
    use. There appears to be a new perspective strongly in favor of
    preservation programs over everything else.
        I must say to both of you that many actions on the part of
    this administration seem to support that premise. It clearly
    seems to be a time to examine the mission of the Forest Service
    as represented and reflected in its budget proposal, and that
    is what we would like to do here today.
        As I told you last night, Mr. Lyons, long after we
    scheduled this meeting the majority leader asked me to be in
    his office at 9:30 a.m. Senator Burns has kindly agreed to
    preside over the committee hearing for a half an hour or so. We
    hope that we can continue through with all of the really
    important questions that we have.
        In the absence at this point of Senator Byrd for an opening
    statement, I will ask whether or not my colleague from Montana
    would like to say anything.

                        opening remarks of senator burns

        Senator Burns. Well, thank you, Mr. Chairman. I will just
    put my statement in the record.
        I think I have the same concerns that you do and especially
    in--nobody has to know that you own a big chunk of my State.
        And we are getting to the point where the same concerns
    that there is a louder, small voice here that happens to set
    policy on lands than the people who actually are near those
    lands, whose economic survival depends on those lands, and
    also, that our ability to take care of them is hampered by
    people of little bitty minds just about the size of the eraser
    on this pencil.
        So I can--it amazes me. It just absolutely amazes me about
    this 13 square miles of logic-free environment on where we come
    up with some of these crazy, damn things that we have to--we
    hear coming down the chute.
        So I will put my statement in the record, a strong letter
    to follow, and get a shot at the questions.
        Thank you very much, Mr. Chairman.

                      summary statement of hon. jim lyons

        Senator Gorton. With that, Mr. Lyons, we will be happy to
    hear from you and Mr. Dombeck.
        Mr. Lyons. Well, thank you very much, Mr. Chairman. I
    appreciate this opportunity to appear before you, Senator
    Burns, and the subcommittee today.
        In light of your tight schedule, I will limit my comments
    and ask that Chief Dombeck have a little more of my time to
    offer his perspectives in his new role as the head of the
    Forest Service.
        We are very pleased to have Mike join the Forest Service.
    After his brief tenure over in Interior he has come back home.
    I think he is going to provide outstanding leadership and will
    help us tremendously in addressing the many challenges we face,
    both resource management challenges and organizational
    management challenges in the Forest Service.
        I also want to acknowledge the presence of Dave Unger,
    Mike's associate chief. Dave recently received the Presidential
    Rank Award, the highest award that can be provided a civil
    servant, for his many years of dedicated service to the Forest
    Service, as well as the Soil Conservation Service, now the
    National Resources Conservation Service.
        Dave recently announced, at the height of his career, that
    he is going to retire, which shows his continual wisdom, going
    out when he is at the best of his game.
        I just want to say for the record how much I have
    appreciated Dave's long service and commitment and dedication
    and want to acknowledge the role he has played in providing for
    the Nation's legacy of natural resources.
        I will let Mike introduce the other members of the Forest
    Service who are here with us today.
        Mr. Chairman, I would like to make three points that I
    think help set the stage for the situation and the challenge we
    face, the committee, the administration and the Forest Service,
    in dealing with the difficulties we have in coming up with a
    budget to support the Forest Service activities.
        The first point is that, we have a very, very broad mission
    in the Forest Service. We have the world's largest natural
    resource research organization. We play an extensive role
    through our State and private forestry programs and working
    with private landowners in protecting the Nation's forests and
    lands, not just the National Forest System lands, from insects
    and disease.
        We do extensive work in urban and suburban areas, helping
    the 80 percent of all Americans who reside in those areas
    understand their relationship to the out of doors and hopefully
    improving their environment.
        One of our primary focuses is the work we do on the
    National Forest System, 191 million acres of the best landscape
    in America and a very important part of the landscape in
    Montana and Washington and other parts of the United States.
        Our challenges are growing, and our work is changing over
    time. I find myself in a position these past 4 years and in
    this term trying to deal with an agency that is going through
    tremendous change, as the Nation's economy has gone through
    tremendous change. I think we are caught up in a change as
    well.
        The second point I want to make is that this change in
    mission and change in direction is not something that is being
    driven by administrative fiat or differences in philosophy
    between ourselves and all of you but simply reflects, I think,
    changing values in how the American public wants to use its
    landscape.
        I would offer as an example a significant increase in
    recreation demand across the United States, a significant
    increase in recreation and tourism as an important part of the
    economic engine of States like Washington and Idaho and Montana
    and other places, also a growing challenge in dealing with
    threatened and endangered species.
        We face a listing decision here with regard to coastal
    coho, which could affect Washington, Oregon, and northern
    California, as well as bulltrout, which could affect Montana in
    the inland West.
        Increasing challenges in providing for and supporting the
    economies of rural communities that are going through
    transitions from economies that were based almost solely on
    extractive industries and on timber and mining to economies
    that are now much more broadly based. They may have as their
    anchor timber and mining, but now have to consider things such
    as recreation and tourism in other parts of their economy. We
    play a critical role.
        We also remain an important source of high quality outdoor
    recreation opportunities and a primary source of high quality
    water for most of the communities in the Western United States.
        So we have a very diverse role, and public values certainly
    are affecting how our role changes over time. Jack Thomas,
    Mike's predecessor, instituted a philosophy in the organization
    called adapted management, management based on change,
    recognizing that our circumstances and our resource demands
    change.
        I would suggest as an organization we are going through
    adaptive management in trying to change our organization, as
    other businesses are doing, to respond to changing times.
        Finally, I want to address the question that you raised and
    that Chairman Stevens has raised before and that is: Why do we
    have a Forest Service?
        I would suggest that now more than ever we need a Forest
    Service because of the changing circumstances that we see and
    because we are uniquely positioned, the professional expertise
    we have with the scientific understanding we have of good
    resource stewardship to ensure a continuous supply of the goods
    and services that the public demands from its national forests,
    that the public requires of private forest lands, and that we
    will need to provide in terms of the research and understanding
    that is going to help guide these resources on into the future.
        As I said, the national forests are increasingly required
    to provide a great deal more than just timber and minerals and
    opportunities for grazing and the like. The demands continue to
    grow.
        And in many respects, the Forest Service's mission is
    spinning around to the mission that was originally established
    for the National Forest System when it was first established,
    which, as Senator Stevens reminds me often, was a continuous
    supply of timber, but also continuous water flows.
        In fact, many of the national forests in the West were
    first established to protect water supplies for cities like Los
    Angeles, San Francisco, Portland, and Seattle.
        We recognize this changing mission and changing direction
    by trying to respond as much as we possibly can. Our overall
    mission as an organization is caring for the land and serving
    people. And I think that mission is sound.
        But what is different is what people are demanding from
    their national forests and their expectations of the kinds of
    service and support we are going to be providing.
        In fact, in many respects, Mr. Chairman, I think the
    organization is going through a transition from producing
    things to providing services as we enter the service economy as
    well. That does not mean that we will not continue to provide
    timber as an important product of national forest management.
        But more and more we are using the timber sale program to
    achieve other goals and objectives, such as improving forest
    health, improving wildlife habitat, and protecting other
    natural resources.
        We are more and more investing in other kinds of resource
    management to try and respond to increasing demand for
    recreation and tourism, to respond to community needs to
    diversify the products, goods, and services that we provide.
        We are doing our best to respond to these changes with
    declining budgets and also a declining work force. It creates a
    tremendous challenge.
        We are committed to working with you to try and deal with
    challenges, to provide guidance, and set priorities. We are
    trying to be creative and use the tools that you have provided
    us to be more responsive.
        Those tools run the gamut from recreation fee demo project,
    which may afford us a way to provide more support for the
    recreation program, to innovative uses for land management,
    such as the Forest Legacy Program, one of the projects which of
    course you and I will go visit here in 2 weeks, where we
    purchase long-term easements instead of fee simple purchases,
    so we can spread our dollars further.
        It is a tough challenge these days, Mr. Chairman, but I
    think as an organization the Forest Service, better than any
    other land management agency, is well positioned to deal with
    those challenges and prepare itself for the resource management
    challenges that we are going to face in the 21st century.

                               prepared statement

        I am proud of the organization. We have gone through some
    difficult times. I think the real question is not why do we
    have a Forest Service, but what is it that we need to manage
    for, and how can we best position ourselves and obtain the
    resources we need to ensure that we can meet the public's
    demand for the goods and services that come from the Nation's
    natural resources in perpetuity?
        Thank you.
        [The statement follows:]
                   Prepared Statement of Hon. James R. Lyons
        Mr. Chairman, Senator Byrd, and Members of the Committee: Thank you
    for inviting me and the new Chief of the Forest Service, Mike Dombeck,
    to appear before you and discuss the fiscal year 1998 budget for the
    USDA Forest Service. We are joined by several other Forest Service
    professionals who have worked long hours and weekends to assemble the
    budget for the President.
        As you and your staffs review the specifics in our budget proposals
    for 1998, I hope you can keep in mind three key themes and principles
    which provide the foundation for all the goals, objectives and programs
    in this budget. (1) The broad scope and mandate of the Forest System
    Mission; (2) The imperative of restoring and protecting healthy
    ecosystems; and (3) Our efforts to help spread conservation and forest
    stewardship beyond the National Forest System borders.
                           the forest service mission
        The Forest Service mission is ``caring for the land and serving
    people.'' I want to focus first on ``caring for the land.'' Many people
    cannot comprehend exactly how much land we care for. The National
    Forest System's nearly 192 million acres is the equivalent land area of
    Michigan, Ohio, Kentucky, West Virginia, Virginia and the whole
    northeast--a total of 16 states plus the District of Columbia. We
    manage 156 forests with the average size of the State of Delaware.
        Consider this: each Forest Supervisor wakes up each morning to
    manage an area the size of a small state. Their jobs are not easy.
        In caring for the land, we need to address all of our assets--clean
    streams, abundant fisheries, birdlife, game, endangered species, trees,
    clean air, windblown mountain tops, lakes, grasslands, arid canyons,
    the temperate rainforests, open meadows, woodland swamps. The list goes
    on. We have enormous responsibilities to make sure this land is
    healthy. Most of our proposed budget will be spent on trying to protect
    this national treasure chest of natural resources coast-to-coast.
        The second part of our mission is ``serving people.'' Again, it may
    sometimes be difficult to comprehend exactly how many people depend on
    the forests for services.
        Tens of thousands of the private landowners--who own and manage the
    rest of the 600 million acres of private forest land--look to our State
    and Private Forestry Programs for technical advice and financial
    incentives.
        National forests provide the more outdoor recreation opportunities
    than any other federal land agency. Millions of Americans visit the
    National Forest System to hunt, camp, hike, fish, sight-see, climb,
    ski, canoe, birdwatch and other activities. The Forest Service goal is
    to provide high quality outdoor recreation opportunities to meet users'
    demands while still being good stewards of the land.
        Since 1973, more than one million Americans have spent a day, a
    week or even more working with Forest Service employees as campground
    hosts, trail builders, researchers and dozens of other activities.
        In addition, many other Americans go to work on National Forest
    Lands to operate timber sales, grazing permits, mining claims, guiding
    companies and carry-out other commercial uses.
        When you consider all of these customers coupled with the people
    who depend on Forest Service research, international expertise, urban
    and community forestry and the rest of our activities, you begin to
    realize the scope and breadth of ``caring for the land and serving
    people.'' This is the philosophy behind the $3 billion dollar budget.
                      restoring and protecting ecosystems
        The best and most credible science today demonstrates that Aldo
    Leopold was right decades ago--everything is connected to everything
    else. We are applying his sage advice to ``not throw away the parts''
    when we tinker with our natural ecological systems. I am proud to say
    that the USDA Forest Service has demonstrated to the world the cutting
    edge in ecosystem management. In the Pacific Northwest, we have
    standards and guidelines in place which are not directed at one
    outcome, one product or one use. We have a system in place that,
    according to the best available science, ensures that we are on track
    to manage those ecosystems for perpetual sustainability. We will
    continue to learn more, but today that region is on track and the
    services we provide and the health of the land will be dependable.
        In the Pacific Northwest we are working to restore aquatic
    eocsystems. Degraded anadromous fish habitat and their watersheds will
    be restored and enhanced by reducing sedimentation and streambank
    erosion, introducing structures to create pools that provide hiding
    cover or accumulate spawning gravel, and remove or modify man-made
    barriers to improve adult and juvenile migration conditions.
        In Oregon, the Forest Service and the Governor are committed to
    working together to achieve restoration of eastern Oregon forests.
    Efforts to accelerate and emphasize restoration will be a partnership,
    with community-based support, and will be done within the framework and
    guidelines of the Eastside Environmental Impact Statement and other
    direction, such as PACFISH.
        In the Sierra Nevada range we are in the process of applying the
    best science available in a similar effort. I believe we basically have
    all of the information we need to make wise resource choices, and in
    the next few months, a team of scientists familiar with the issues,
    region and National Forest System process will help us confirm a
    direction that ensures long-term dependability for goods and services
    and ecological integrity.
        In the next few months we will take significant steps forward in
    the Columbia River Basin. Again, we have the best minds working to
    provide a unified consensus approach to sustaining this ecosystem for
    the people who live in the area and depend on the resources for their
    quality of life, as well as for the area's wildlife.
        We have completed a scientific assessment for the Southern
    Appalachian region and are working to improve our understanding of the
    Great Lakes region. Our budget provides the tools and funding necessary
    that continues to propel the Forest Service to the forefront of forest
    management. Throughout our ecosystem efforts you will probably begin to
    see the evidence of Chief Dombeck's ``collaborative stewardship''
    concept, and I will leave this point for his remarks. For now, I can
    say I am very optimistic about the potential.
                   forestry beyond the national forest system
        USDA is the premier forest landowner assistance organization in the
    world. The Department conducts extensive scientific research, has a
    workforce with technical expertise in counties across the country, and
    provides financial incentives to help landowners increase the
    conservation contributions that private land makes to our nation's
    fish, wildlife and clean water resources. Our 1998 budget includes
    funding to support this well-established, broadly supported leadership
    role in the Department of Agriculture.
        We have included in the 1998 budget a strong continuation of our
    stewardship assistance program that includes a 5.7 million dollar
    increase for Stewardship Incentives. I want to emphasize that the
    increases in certain state and private forestry programs are not offset
    by national forest system cuts; the state and private budget is
    essentially flat. However, we strongly believe that willing landowners
    deserve the technical and financial support of the Forest Service if
    they want to go the extra mile to deliver food and fiber to the
    marketplace while practicing good stewardship on their lands.
        In addition to $16 million within the National Forest System for
    ``Jobs In the Woods'', $17 million is included the budget to provide
    critical assistance to rural communities in the Pacific Northwest. The
    other programs in the State and Private Forestry--including Urban and
    Community Forestry, Forest Legacy and Cooperative Fire Management--are
    all critical to our efforts to enhance non-federal forest resource and
    protect productive timber land from fire and conversion to non-forest
    uses.
        We also intend to step up our nationwide monitoring capacities so
    that we can be better tuned to the forest trends across the landscape.
    The program will cover 60 percent of the forest land in the lower 48
    states, compared with 53 percent in 1997 and 40 percent in 1996.
    Coupled with our level budget in research, we will have the basis to
    make good decisions.
        The Forest Legacy program is designed to conserve the resource
    values of forest land, emphasizing lands of regional and national
    significance that are threatened with conversion to non-forest uses.
    Conservation easements, or fee simple purchase are methods used by the
    Forest Service and our partners in working with willing landowners. An
    example of a successful partnership is the Mountains to Sound Greenway
    for the protection and preservation of a ``green corridor'' along I-90
    from Seattle through the Cascade Mountains. About 950 acres have been
    added to this long-term effort through acquisitions and partnerships.
    The largest conservation easement east of the Mississippi resulted from
    Forest Service negotiations and a state grant option allowing Vermont
    to step in and complete this acquisition. This easement covers 31,450
    acres in the ``Northeast Kingdom'' of Vermont, protecting a large
    contiguous block of forest land from development. This joint approach
    also fits in with our objectives of coordinating state and federal
    efforts to achieve mutual objectives.
        The Urban Resources Partnership program was initiated on Earth Day
    in 1994. Eight cities, including Los Angeles, Seattle, Denver, Chicago,
    New York, Philadelphia, Atlanta, and East St. Louis, currently
    participate in the Program. This program is providing urban residents
    the opportunity to address local environmental issues and improve the
    quality of urban life. Additional events are planned for Earth Day
    celebrations this month. This is a continuing program throughout the
    year that has achieved successes that include conducting environmental
    education, habitat restoration to revitalize wetlands in the Los
    Angeles Basin, established community gardens for food and educational
    purposes, supported Arbor Day activities, and is helping build
    community capacity. Partners in Los Angeles include the USDA Natural
    Resource Conservation Service, National Park Service, Housing and Urban
    Development, Environmental Protection Agency, California Department of
    Forestry, the City of Los Angeles and over 50 non-profit organizations
    in the Los Angeles Basin.
        The Forest Service is a science-based organization and our research
    products are used around the globe. Each day, field foresters, land
    managers, farmers, ranchers, mill operators, urban foresters, public
    interest groups and many others apply the knowledge developed by Forest
    Service scientists and cooperators in academia and industry. The Forest
    and Rangeland Research Budget is to be funded at $179.8 million, the
    same funding level as fiscal year 1997. However, the programs are
    continually being adjusted to meet changing and emerging national and
    regional issues and maintain a broad-based scientific capability.
                                   conclusion
        Let me close by saying that the challenges and activities I have
    highlighted represent shifts in business as usual as well as our goals
    for the future management of the national forest system. Within the
    framework of a balanced budget by the year 2002, this budget meets the
    highest priorities of a very expansive mission and ever increasing
    public demands.
        I am confident that the budget before you meets our central
    challenge: Caring for the Land and Serving People. The job is large,
    the demands are great and the stakes for the future are high.
        That concludes my testimony, Mr. Chairman. I would be happy to
    answer any questions at the conclusion of Chief Dombeck's statement.

                       summary statement of mike dombeck

        Mr. Dombeck. Good morning, Mr. Chairman, Senator Burns.
        I am pleased to appear before you for the first time in
    this job as Chief of the Forest Service. I have been just a
    little over 3 months in the job, and of course as I think both
    of you know, I am no stranger to the agency.
        I grew up in a national forest in Wisconsin's beautiful
    lake country in the Chequamegon National Forest. So I come with
    that perspective as well.
        I have to say, as you implied in your remarks, that we are
    faced with competing demands, tough challenges, new pressures,
    and a greater diversity of people living on the land today than
    every before. I would hope that we in this room can help move
    the ball forward.
        I believe that if we work together, we can usher in a
    spirit of trust, a spirit of moving forward, and a deep
    commitment to the healthy forest, healthy lands, and the
    service to the people.
        I come here with a willingness to hear all sides of the
    debate, a commitment to remain open and responsive to new
    ideas, new values, new information, and a commitment to leave
    our national forests healthier than when I first came into this
    job.
        I want to say that I am proud to be back in the Forest
    Service. I continue to remind myself it is an agency with some
    of the best resource professionals in the world, the best wild
    land firefighters, the best recreation planners, some of the
    best silviculturists, the best biologists, and an
    administrative support staff. We have a work force that in
    essence is second to none in capability.
        I want to also add that I am not so naive to think that
    people will not sometimes disagree. I think our task as public
    servants, as resource professionals, is to focus on areas of
    agreement and move forward where we can.
        My commitment, what I call collaborative stewardship, is
    listening to people and having our people, the resource
    managers, work hand in hand with local communities, with the
    constituencies, both local and national, to move forward.
        I will also keep my remarks short, because I know you have
    to leave soon. I want to call your attention to the many
    successes that I have included in my testimony. I think it is
    important that we continually remind ourselves that in spite of
    so many challenges that we have, there are also many, many
    successes.
        In every State there are places where things are working
    very well, and we need to take a look at those as models of how
    we can improve relationships in other places.
        I do want to mention accountability. Our first priority is
    to the land and people, but our responsibility in this agency
    is to deliver goods and services and values for which public
    lands are cherished, to deliver healthy lands and waters, to
    deliver a sustainable supply of timber and forests, to deliver
    environmentally benign energy and minerals development, to
    deliver better hunting, better fishing, high quality recreation
    experiences and the many other things that this agency needs to
    be held accountable for.
        And I will again for the sake of brevity, stop here. But I
    do want to introduce the leadership of the Forest Service that
    is here to help me. Given the fact that I am just a little over
    3 months in the job, there are a lot of things that I have not
    yet learned.

                           introduction of associates

        Of course, Dave Unger, Associate Chief, and I would like to
    second Mr. Lyons's comments about Dave and thank him for
    agreeing to stay with me through this transition and help me
    get going.
        Janice McDougle is Acting Deputy Chief for National Forest
    Systems. Barbara Weber behind me here is Acting Deputy Chief
    for Research. Joan Comanor, Deputy Chief for State and Private
    Forestry, Clyde Thompson, Acting Deputy Chief for
    Administration, Ron Stewart, Acting Deputy Chief for Programs
    and Legislation.
        And the guy that really knows what is going on, that has
    all the numbers, is Steve Satterfield. And I know all of you
    know Steve well.

                               prepared statement

        I would like to ask that my statement be entered into the
    record.
        Senator Gorton. It is and so will Mr. Lyons's be.
        [The statement follows:]
                       Prepared Statement of Mike Dombeck
        Mr. Chairman, Senator Byrd and Members of the Committee: I am
    pleased to appear before this committee for the first time as Chief of
    the Forest Service. As some of you may know, I am no stranger to the
    Forest Service, having grown up 25 miles from a town of 1,500 people in
    northern Wisconsin's beautiful lake country, in the Chequamegon
    National Forest.
        Today, faced with more competing demands, new pressures on the land
    and greater challenges than ever before, resource management has become
    contentious. We in this room can help to change that. I believe that if
    we work together, we can usher in a new era of resource stewardship and
    a deeper commitment to conservation. A commitment marked by a
    willingness to hear all sides of the debate. A commitment to remain
    open and responsive to new ideas, new values, and new information. A
    commitment to leave our lands healthier and our waters cleaner.
        I am not so naive to think that people will not sometimes disagree.
    Our task as public servants and resource professionals is to focus on,
    and build from, the many more areas of agreement. To regain the trust
    of the American people. To demonstrate to the rest of the world that
    yes, people of good will can come together and find a way to live
    sustainably on the land.
        I call this commitment to working with people to maintain and
    restore the health of the land, collaborative stewardship.
    Collaborative stewardship rests on one very basic premise: we simply
    cannot meet the needs of people, if we do not first secure the health
    of the land.
        To get a better sense for how people feel the Forest Service should
    pursue collaborative partnerships, I have recently talked with many in
    the Administration, members of Congress and their staff, former Forest
    Service Chiefs, employees, retirees, and conservation and industry
    leaders. In all of my conversations, three themes are repeated: people,
    knowledge and land. It strikes me that that's what the Forest Service
    is all about--using knowledge to conserve and restore the health of the
    land for the benefit of the nation's people.
        I'd like to share with you some examples of how the Forest Service
    is meeting the needs of people through better land management decisions
    and more effective use of knowledge. For instance:
      --In Washington, the Pacific Northwest Region of the Forest Service
            is aggressively pursuing the reduction of fuels from the
            national forests. Not only does this improve resource
            protection against catastrophic wildfires, but it improves
            ecosystem health as well. In addition, implementing the
            Northwest Economic Adjustment Initiative through close
            cooperation with state and local governments is helping many of
            this region's timber-dependent communities move towards more
            diverse and sustainable economies.
      --In partnership with the Alaska Department of Community and Regional
            Affairs, rural development grants of $319,000 to 21 communities
            were awarded focusing on enhancing the overall quality of life
            in rural areas primarily through natural resource based
            solutions. In addition, economic recovery program funds
            targeted grants to nine communities dealing with the acute
            problems associated with federal or private sector land
            management decisions and policies to complete projects
            identified in their community action plans. In addition,
            Research has prioritized its efforts in the Northwest to
            address two major issues of concern in Alaska: (1) how to
            produce wood consistent with sustaining ecosystems and
            producing multiple values; and (2) how to address the spruce
            beetle infestation on over one million acres.
      --The National Forests in Mississippi during 1995 experienced one the
            worst southern pine beetle outbreaks on record. A cooperative
            effort led to an incident command system to battle this
            outbreak as if they were fighting a major forest fire. This
            innovative approach worked well and helped minimize the impact
            of the beetle outbreak. It has been effectively used during the
            resulting salvage sales program in 1996.
      --In New Mexico, the Cibola National Forest began charging parking
            fees along the Sandia Crest Scenic Byway as part of the
            recreation fee demonstration program authorized by Congress in
            August 1996. Monies collected are being used to provide safe
            and clean picnic grounds and trailheads along the Scenic Byway.
            Since implementation, vandalism has dropped dramatically.
            Cooperators in this venture include the New Mexico State
            Highway Department, East Mountain Chamber of Commerce, the
            Turquoise Trail Association, and Tinkertown Museum. In
            addition, efforts on the Gila National Forest to develop
            improved relationships with Catron County have resulted in a
            Memorandum of Understanding to clarify roles and improve
            communications. The Lincoln National Forest and the Cloudcroft
            Municipal School Board, Otero County have worked out a land
            exchange using public lands to meet the growing needs for
            classroom and faculty expansion.
      --In Montana, the development of the Lincoln County Log Yard with
            Forest Service Economic Action Program support to unload, sort,
            scale and forward short logs will expand the raw material
            supplies, enhance business opportunities for small business
            owners and create incentives for implementing forest health
            management practices.
      --In Utah, the multiple uses of public lands can be clearly seen.
            Preparations continue for the 2002 Olympics. The Natural
            Resource Coordinating Committee will steer the State's
            government agencies in a coordinated support role for the Salt
            Lake Organizing Committee. This partnership will allow the
            world to see the value of public lands and environmental
            stewardship with nearly all the venues on National Forest
            System lands. Many partners, contributing nearly three times
            what the Forest Service is contributing are working to improve
            stream and wildlife habitat and do fish and wildlife population
            surveys. Coal production in the State is contributing nearly
            $35 million in bonus bids and royalties to the federal
            government during a three-year period.
      --In New Hampshire, the acquisition of Bretton Woods at the base of
            Mt. Washington on the White Mountains National Forest will
            secure this land for public use of its outstanding vistas,
            provide protection of 2 miles of Ammonoosuc River frontage, and
            provide access to Upper Falls.
      --In Colorado, the Boulder Community Volunteers have won the Chief's
            National Volunteer's Award four times. These volunteers are a
            shining example of how local people can come together to join
            in with the Forest Service to achieve the goals of caring for
            the land and serving people. Elsewhere in Colorado, we are
            working with Dow Chemical and the counties to develop
            alternative methods of controlling noxious weeds.
      --In West Virginia, the gypsy moth pest management efforts and
            watershed projects in Morgantown and the timber and watershed
            efforts in Parsons are successfully integrating research, with
            the cooperative programs in forest health, to the management of
            the national forests for use not only in West Virginia, but
            across much of the Appalachians.
      --In Vermont, the acquisition of 2,800 acres of the Chittenden
            Reservoir property was completed. This tract of land will serve
            as a valuable addition to the public's lands and the National
            Forest System.
      --In Arkansas, the epidemic of southern pine beetle infestation and
            storm damage on the Ouachita National Forest led to a
            successful timber salvage and fuel treatment program
            contributing to the goals of protecting ecosystems.
      --In South Carolina, the Sewee Visitor and Environmental Education
            Center was opened in 1996. This project is a visitor and
            environmental education center for the interpretation of the
            Cape Romaine National Wildlife Refuge and the Francis Marion
            NF. This is a cooperative project between the U.S. Fish and
            Wildlife Service, Cape Romaine National Wildlife Refuge, and
            the U.S. Forest Service.
      --Elsewhere in South Carolina, the Savannah River Forest Station
            sponsors two innovative and unique education programs serving
            under-represented, minorities through collaboration with local,
            state, and federal partners. The education programs focus on
            improving science, math and engineering education through
            hands-on activities for students in grades 3-12 and also serves
            science and engineering college undergraduates and faculty.
      --In Nevada, partnerships are accomplishing improvements to fish and
            wildlife habitat and conducting population surveys and
            monitoring of plant and animal populations. At Walker Lake,
            partnerships are doing important research and monitoring,
            including inventories, and studies of riparian and range
            processes and functions.
      --In North Dakota, an average of 6,800 acres each year are added to
            the non-industrial private forest land base which is managed
            under the guidance of professionally developed Forest
            Stewardship Management Plans. These plans are designed to
            accomplish the specific objectives of individual private
            landowners such as windbreak planting and renovation, forest
            products utilization, and wildlife habitat improvements.
      --After wildfires in southern California were successfully
            suppressed, a Burned Area Emergency Rehabilitation team
            initiated watershed rehabilitation measures. These measures,
            involving many federal, state, and local agencies and the
            California Native Plant Society, were put in place prior to the
            first damaging storm of the season reducing the potential for
            additional loss and damages. Rehabilitation efforts included
            the protection of threatened and endangered species habitat,
            hydroelectric power, heritage resource sites, and flood control
            and water supplies. The rest of my testimony outlines the key
            funding priorities for fiscal year 1998 and re-emphasizes many
            of the points the Under Secretary has already made.
                                 accountability
        Our first priority is to the land and the people who use and care
    for it. Our responsibility is to deliver the goods, services, and
    values for which public lands are cherished. To deliver healthy lands
    and waters. To deliver a sustainable supply of timber and forage. To
    deliver environmentally benign energy and minerals development. To
    deliver better hunting and fishing. To deliver quality recreation
    experiences, and to do all of the above through an efficient, and
    accountable organization.
        Every forest supervisor, on every forest, must be held accountable
    for conserving and restoring the health of the land. Clearly, we must
    deliver sustainable supplies of wood fiber for American homes; forage
    for livestock; and minerals and energy that help support healthy
    economies. But as I said earlier, the health of the land must be our
    first priority. Failing this nothing else we do really matters.
                    the fiscal year 1998 president's budget
        This year's budget proposal reflects the Forest Service's
    priorities and programs within the agency's mission ``Caring for the
    land and serving people''. It focuses on implementing the Forest
    Service's strategic long term goals:
      --Restore and Protect Ecosystems.
      --Provide Multiple Benefits within the capabilities of ecosystems.
      --Ensure Organizational Effectiveness.
        Within this framework, in fiscal year 1998 we will make a major
    effort to improve financial and ecological accountability. Three
    significant initiatives--the road building program, fire fighting
    funding and the salvage fund--illustrate this.
        Many people question the logic in trading roads for National Forest
    trees, especially given the current expansive network of roads on the
    National Forest System and the cost of maintaining many of these roads
    once they are built. The time has come to address our transportation
    needs in a different way. Our Budget proposes to discontinue the use of
    Purchaser Credit which will make the road a direct cost of the timber
    sale. Bid prices for timber sales are expected to decline
    commensurably. Forest Service engineers will continue to work with
    private contractors to ensure Forest Service roads meet our standards.
        Funding mechanisms for our fire programs need to change.
    Discretionary spending levels cannot accommodate the escalating costs
    of fire suppression, which have increasingly been met through emergency
    spending outside the budget caps. We have proposed two main changes:
    First, we want to ensure that funds to fight fire are available to our
    fire fighters when wildfires begin. The fiscal year 1998 President's
    Budget proposes a government-wide contingency fund to cover various
    disasters including emergency firefighting. Second, we want to better
    ensure that we capitalize on opportunities to use management techniques
    that reduce catastrophic wildfires. Under our proposal, between $30 and
    $50 million is recommended for hazardous fuels reduction--a 25- to 100-
    percent increase over 1997. The cost of reducing much of the fuels
    buildup before a wildfire occurs, pales when measured against the costs
    of putting out intense, fuel-driven wildfires. These are two
    significant improvements that address our financial and ecosystem
    needs, and I hope you will support us in this effort, as you have in
    the past.
        We are proposing a change in the current salvage sale fund so that
    funding we receive more closely reflects the type of work that we are
    doing in the field. Active management is necessary to restore ecosystem
    health.
        Our budget proposal retains the existing Salvage Sale fund account
    and its primary function--funding the removal of dead or dying timber
    on National Forest System lands. A separate, distinct account is
    proposed to fund ecosystem health and restoration projects. This fund
    would be called the ``Forest Ecosystem Restoration and Maintenance''
    fund--or FERM. This is an important first step to provide funding for
    necessary watershed restoration work that is not directly tied to the
    timber receipts of each separate forest. I hope you can agree with our
    motivations and objectives. We must accelerate the restoration of our
    publicly owned lands and waters. This new fund draws from several
    existing sources and would begin fiscal year 1998 with 121 million
    dollars for restoration efforts. We must use all of the tools we have
    available to accelerate the restoration of our nation's forests--
    thinning, increased use of prescribed burns, mechanical treatments, and
    so on. These restoration efforts are investments--investments that
    will, for example, diminish the risk of catastrophic fire along the
    urban wildland interface. The cost of not making these investments
    grows exponentially every year.
        There are also two more emphasis items within the President's
    fiscal year 1998 Budget:
        The President's Forest Plan for the Pacific Northwest:
        Continuing to implement provisions of the President's Plan is a
    priority in fiscal year 1998. The budget includes $107.4 million to
    carry out critical work for watershed protection, monitoring, timber
    harvest, adaptive management and development of rural communities'
    long-term economic strength.
                                hazardous waste
        Funding for the fiscal year 1998 Forest Service hazardous waste
    work is provided within the USDA central fund for this purpose. For
    fiscal year 1998 $14.25 million is identified for the Forest Service.
    Efforts will be targeted on cleaning up hazardous waste sites
    identified on national forest lands, especially identifying responsible
    parties under CERCLA so that they, not the taxpayers, pay the cost of
    cleanups.
                      additional appropriations highlights
        This year's budget reflects continuation of our research program at
    last year's level. Science is critical to our program as a nation. As I
    said before, we are about knowledge and our research program produces
    much of the knowledge necessary to address contemporary issues. We will
    continue to adjust our efforts to meet changing and emerging national
    and regional issues and maintain a broad based scientific capability.
        Our overall State and Private Forestry program is also at last
    year's level. However we are proposing to place a greater emphasis on
    our Stewardship Incentive Program (+$5.7 million). In addition, State
    and Private Forestry, the National Forest System, and Forest and
    Rangeland Research would jointly expand the scope of forest health
    monitoring to cover 60 percent of the forest land in the lower 48
    States. This program is built on a strong partnership among the Forest
    Service, the National Association of State Foresters, and the Bureau of
    Land Management. The program includes all forest ownerships; Federal,
    State, and private.
        Under the National Forest System appropriation, we are requesting
    an increase of $50 million. This increase is targeted for Recreation
    Use, Wildlife and Fish Management, Rangeland Management, Forestland
    Management and our Soil, Water and Air Program.
        Our efforts in the Reconstruction and Construction area will be
    targeted at extensive reconstruction needs with emphasis on health and
    safety items such as contaminated water systems.
                                   conclusion
        Finally, I believe the Forest Service mission--caring for the land
    and serving people--is more important than ever. Within the overall
    plan to balance the nation's budget by the year 2002, these proposals
    will help us to meet our highest priorities and ever increasing public
    demands.
        That concludes my testimony, Mr. Chairman. I would be happy to
    answer any questions you or members of the Subcommittee may have.

                              organization changes

        Senator Gorton. I would like to begin by discussing the
    direction the Forest Service seems to be oriented toward in the
    near future.
        It is apparent, Mr. Dombeck, based on recent changes at the
    top of your organization, that you have plans for new
    direction. While official documentation might reflect
    otherwise, it seems pretty clear that you have removed three of
    your principal deputy chiefs. You filled two of these
    positions.
        Now that Mr. Unger is leaving, and in concert with another
    vacant deputy chief, you will still have three vacancies at the
    top of the organization to fill.
        Many comments, including those of former Associate Chief
    George Leonard, point to the fact that you are purging the
    organization of resource professionals who have performed their
    jobs based on sound stewardship principles, but otherwise would
    not do the administration's bidding.
        In addition, you brought with you into the chief's position
    several assistants with little if any Forest Service
    experience. Would you tell me why you let three deputy chiefs
    go?
        Mr. Dombeck. Well, first of all, let me say that they
    selected to do what they did, as it was their choice. I did not
    ask them to leave. I offered them options and did not suggest
    retirement.
        Part of the function and intent of the Senior Executive
    Service is to provide flexibility in leadership jobs. I believe
    that as a new chief, I should have the option to select my
    team.
        I want to assure you the people that have been selected,
    for example, the incoming Deputy Chief for Research, Robert
    Lewis, is a long-time employee of the Forest Service, a senior
    executive with impeccable credentials, highly regarded by, I
    believe, the people that have criticized me for the actions.
        Likewise, Bob Joslin, who is coming in as Deputy Chief for
    National Forest System, is a long-time Forest Service employee,
    highly respected across the board by the timber industry, as
    well as the conservation community. I have received many, many
    compliments from both employees and retirees for those
    selections.
        I want to assure you that other selections will be made in
    that vein of resource professionals. I hardly think that 3
    changes out of 35,000 is a purge. From the standpoint of the
    employees that I brought with me, again, three people.
        One is a secretary at a GS-11 level. Another one is a
    policy analyst at a GS-12 level. And another one is currently a
    special assistant, GS-15 level.
        I would be happy to elaborate on any other questions that
    you have concerning all this.

                              organization changes

        Senator Gorton. I gather by implication from that answer
    that we can look for significant additional personnel changes.
        Mr. Dombeck. Obviously, as Dave Unger, who elected to
    retire effective July 3, the demographics of the agency are
    such that, like a lot of agencies, many, many of the senior
    executives are of retirement age and of course have the option
    to do as they wish.
        And from the standpoint of my intent, I do not believe you
    will see massive changes as maybe some of the folks may have
    been concerned with.
        Senator Gorton. You have spoken about the experience at
    least of some of your new people. Can you tell me whether or
    not these new people will be committed to the multiple use
    concepts that have been the historic basis of the Forest
    Service organization?
        Mr. Dombeck. Yes; very much so. In fact, I would like to--
    since I have discussed it with some of the staff--and the
    concern, as I understand it, may be with Francis Pandolfi.
        Let me say that the role Francis will play has to do with
    the finance and the numbers business of the agency. He has an
    MBA from Harvard, is an executive that has run a couple of
    major corporations.
        As you know, the area of finance is one of the areas where
    we have some challenges. This is the reason for bringing in
    this high level of expertise. He has not been brought to the
    agency to make natural resource policy decisions but to deal
    with the business side of the organization.
        Senator Gorton. Thank you for those answers. And once
    again, I apologize for being requested elsewhere at 9:30.
    Senator Burns has agreed to take over in my absence. I am sure
    I will be back before we are finished. But thank you for this
    beginning.
        And, Senator Burns, for the time being, it is all yours and
    Senator Stevens.
        Senator Burns [presiding]. Before I get into my
    questioning--and thank you, Mr. Chairman. And I look forward to
    seeing you in 30 minutes.
        And I will--Senator Stevens has joined us this morning, and
    we look forward to his--if he has a statement that he would
    like put in the record, or would you like to start off with
    some questions? We will just start with you, because I know you
    are a busy man.
        Senator Stevens. No; I am going to stay until 10:30. You go
    ahead.
        Senator Burns. You are going to stay until 10:30? That is
    pretty dangerous right there. You guys are in big trouble.
    [Laughter.]
        And he is in a good mood, so that sort of gets hard, too.
    [Laughter.]

                                   recreation

        Let us talk a little bit, Mike, about--I hear the statement
    of the Assistant Secretary, and we have changing times. You
    know, I will have to be right honest with you, I do not hear
    that.
        Maybe you hear it here, but you get out on the ground, if
    you get outside and get on the ground and people who really
    count, I think we are still in the resource management
    business.
        And recreation kind of comes second, because I do not see
    any increase in numbers of people crawling around in the
    forests out there.
        No. 1, I see a lot of rich people buying accesses to
    forests, so they cannot get through one ranch to get to another
    backing up to those things. And I am concerned about that.
        But let us put recreation as it should be with resource
    management. Tell me about the dollars that are derived from the
    resources that are found, the timber, mining, grazing, as
    compared to what your recreation dollars are.
        Mr. Dombeck. Let me--first of all, I think the statement I
    made that you may be referring to is that the way I intend to
    look at the National Forest System is that one resource is not
    dominant over another. As Jim mentioned, the importance of
    maintaining water flows, timber programs, mining, forage,
    grazing, recreation and those sort of things.
        Some of the data associated with recreation use that I have
    here--and I can look at Montana, for example, where we had 8.8
    million recreation visitor days in 1986, and in 1996 it was 13
    million, 13.4 million.
        So the increases in demand, in some States has doubled.
    Alaska, for example, it went from 3.5 million in 1986 to 6.9
    million in 1996. We are not suggesting that the other resources
    are less important.
        Many of the--if you look at, for example, the national
    forests of California and the tremendous, tremendous pressures
    people from the Los Angeles basin place on the Cleveland
    National Forest, and the San Bernandino National Forest.
        The workloads there are just absolutely tremendous. The
    trash that we have to pick up, the inflow of immigrants coming
    through there, the hazard of fire and the tremendous workload
    associated with it.
        It is important that we manage this recreation to prevent
    resource degradation, whether it is cultural resources, water,
    or streams, all those kinds of things. So those are some of the
    numbers associated with the increased demand.
        From the standpoint of overall programs, the receipts from
    timber were about $500 million, from recreation about $48
    million.
        However, the contributions of recreation and tourism to
    local economies, of course, are significant. A lot of
    communities in Montana that I have been to, as well as the area
    where I grew up, have people wanting to spend time in open
    space. The number of people that move to areas because of the
    open spaces and the opportunities to hunt and fish and do all
    the things that people like to do in the country is very, very
    important.
        We can provide you with any breakdown of numbers, and we
    will do that for the record that you wish.
        From the standpoint of allocations to programs, what we are
    requesting for in the timber program in 1998 is about $210
    million.
        And what is it for recreation?
        That is receipts. Excuse me. Do you have the request?

                               forest management

        Mr. Lyons. If I could, Mr. Chairman, let me just make one
    point, because I want to make sure that my comments were not
    misunderstood. I do not mean to imply, and certainly I am not
    asserting, that we have to manage for one resource or one use
    over another. And as you know, using multiple use is a
    philosophy that underpins everything we do.
        We can manage for recreation and produce timber. We can
    manage for water quality and continue to have high quality
    forest production and grazing. We have to manage for it all.
        I think more and more what we see is that management is
    critical to ensuring we have good range lands, good water
    quality, and good wildlife habitat. As the forests,
    particularly in the intermountain west, are at risk of damage
    from insect and disease, forest health and ecosystem health
    need to be improved.
        I do not want to imply that these things are mutually
    exclusive. In fact, I think more and more we demonstrate that
    we need to recognize these things in concert and manage them in
    totality, and not one resource against the other.
        Mr. Dombeck. The request for 1998 for recreation is $216
    million, and for timber it is $269 million. And I have any
    other combinations of breakdowns that you would like.

                             fire and forest health

        Senator Burns. Mr. Babbitt has suggested he wants to burn
    some forest land for forest health, around 3.5 million acres.
    How does that figure in with your plans over in the Forest
    Service?
        Mr. Dombeck. Well, in the National Forest System we have 39
    million acres, we estimate, in high-risk or catastrophic stand.
        I think what we are proposing is the flexibility to do
    between 800,000 and 1.3 million acres. We would like to be able
    to do about 3 million acres per year to sort of get ahead of--
    start catching up with this.
        But I also want to point out that some of the reasons for
    the condition of the forests, in a sense part of it is that we
    have of course put out every fire for a lot of years.
        Some of it is also the fact we have not practiced the
    silviculture we need to practice and that we know how to do.
    Part of the problem is the social environment is such that it
    makes it very, very difficult. The forest health issue is not
    necessarily a technical issue.
        I was on the Deschutes National Forest about 1 month ago,
    and the Deschutes has received real high marks for its success
    in implementing timber programs and other things.
        What the people of that part of the State are telling the
    forest employees there, as they tell it to me, is what they
    want is the forest to look like forests. You know, they do not
    want to see a mountainside of bug-killed trees.
        They do not want to see a mountainside that is black from a
    catastrophic fire. And they do not want to see a mountainside
    that is clearcut.
        We have not been doing large clearcuts for a long time.
    Within that window there are tremendous opportunities to deal
    with some of the problems. For example, I might show you some
    pictures of a situation that is very common throughout the
    West. This happens to be in northern California. I think you
    have these photos in your packet.

                                thinning program

        This is--here is about 1,500 trees per acre. You can see
    the--the other thing I might point out is we have fir that has
    grown up in what were traditionally pine stands. And, of
    course, the economic value of the fir is much lower.
        So what do we do in a situation like that to get in and fix
    it? Well, the first thing they did was a thinning. And in the
    thinning program, they removed approximately 2 million to 3
    million board feet per acre, along with about 35 to 40 tons per
    acre of nonmerchantable material, and left about 100 trees per
    acre in that stand.
        Now 8 years later, that same stand would look like that.
    And now it is ready to do a prescribed fire, because the fuel
    ladders have been reduced enough. The fuel ladders that would
    carry the fires all the way up to the tree tops and kill the
    entire trees are gone.
        What I am advocating is that we have to use all the tools
    at our disposal and continue to look for more tools as we deal
    with this forest health challenge. Those tools include
    everything from timber sales, to perhaps grazing, to thinnings,
    to sometimes mowing, to whatever works.
        The choice of tools is not for Washington to dictate. That
    is for our resource professionals in the field to determine,
    what are the best mechanisms to deal with this issue, because
    the issue of fire is going to keep on coming up.
        One point I would like to make, I think is very important,
    is a lot of these areas do not have the timber values on the
    land to pay for the cost of the work that is needed. So what do
    we do?
        In essence, just like a farmer might or a rancher,
    sometimes you have to make investments in land. And from the
    standpoint of the timber harvest rotation period, the harvest
    cycle may be 80 years, a generation or two ahead of us.
        But it is important that we go ahead and do the thinnings,
    provide the appropriate recreation facilities, and use all the
    tools to get on top of this forest health issue, because it is
    a significant problem.
        I know it is expensive, but it is interesting that we can
    come up with $900 million a year to fight wild land fire, but--
    so how can we begin to shift some of that cost into preventive
    measures that, you know, provide local jobs and other things,
    rather than just simply responding year after year to this
    massive fire situation that is continually getting worse and
    worse?
        Senator Burns. Senator Stevens.
        Senator Stevens. I think Senator Cochran has to go before I
    do.
        Senator Cochran. No; and I just got here.
        Senator Stevens. Are you all right?
        Senator Burns. Or I can go to Senator Reid.
        Senator Stevens. No; that is fine. I am happy. I just
    thought he had a committee meeting.
        Senator Cochran. I do, but it has been moved to 10:30 a.m.

                          forest service organization

        Senator Stevens. Mr. Lyons, as you know, I have reached the
    conclusion that the Forest Service is no longer a Forest
    Service; it is a recreation and public service and should be
    combined with the Park Service and the Fish and Wildlife
    Service.
        We should eliminate the redundant management of these three
    entities because of the administration's position that they are
    primarily recreation.
        I state that coming out. As you know, that is my feeling,
    and I am going to pursue that. But beyond that, what did you
    think when Mr. Dombeck removed--by the way, Mr. Dombeck, it is
    not 3 out of 35,000; it is 3 out of 5, you removed 3 of 5 of
    the professional Deputy Chiefs.
        Now was that done with your approval or at your direction
    at all, Mr. Lyons?
        Mr. Lyons. No, sir; Mr. Stevens.
        Senator Stevens. Is there any memoranda between you and Mr.
    Dombeck over what his job would be when he took over the
    administration of the Forest Service? Did you give him a memo
    of directions?
        Mr. Lyons. No, sir.
        Senator Stevens. Did you personally interview him and give
    him directions?
        Mr. Lyons. No; I certainly talked to Mike before I
    introduced him to the secretary, but no, I do not--we did not
    discuss any agenda.
        Senator Stevens. I am just asking if, at the Assistant
    Secretary level or the Secretary level, Mr. Dombeck was
    directed to do what he did.
        Mr. Lyons. No, sir.
        Senator Stevens. Mr. Dombeck, you said you offered options
    to the directors. I remember when the Kennedy administration
    came in and they offered the option to several people to be
    moved across the country in 30 days or quit. What were the
    options that you gave to these three?
        Mr. Dombeck. I elected to--we probably have about how many
    Senior Executive Service [SES] slots in the agency?
        Senator Stevens. That is not what I asked you. What were
    the options you gave these people?
        Mr. Dombeck. I offered them the choice of coming to me with
    where they--what they would like to do. For example, in the
    case of Mark Reimers, Mark thought about it and came back and
    is now working as a volunteer in the area of international
    forestry.
        That is the area he was most interested in, and was his
    decision because he felt that with the many, many years that he
    had in, that there really----
        Senator Stevens. That is one. You had a State and private.
    Which one--you have State and private, research, National
    Forest System, administration and programs and legislation.
    What are the three you gave the options to?
        Mr. Dombeck. National Forest System, research, programs,
    and legislation.
        Senator Stevens. The three that are primarily involved with
    Forest Service practices, right? What was the option you gave
    the research? Who was it, by the way, that you asked to leave?
        Mr. Dombeck. Well, first of all, let me say no one was
    asked to leave.
        Senator Stevens. Well, you were going to remove them from
    their position, were you not?
        You gave them the options to take other jobs, but you did
    not say, ``You can keep your job, if you wish'' did you?
        Mr. Dombeck. That is correct. Part of the----
        Senator Stevens. All right. So you asked them to leave
    their jobs, the jobs that they had when you came on board.
        Mr. Dombeck. Yes; that is right.
        Senator Stevens. Now, what was the job you offered the
    research director?
        Mr. Dombeck. The research director is currently working
    on----
        Senator Stevens. I did not ask you that, Mr. Dombeck. What
    did you offer him?
        Mr. Dombeck. I offered them the--I asked them to come back
    and tell me, what would work best for them. What they would be
    interested in doing, how they feel they could contribute the
    most and what would work with their personal situations.
        And they--of course, they know the options of the agency as
    well or better than I did. In the case----
        Senator Stevens. Well, who appointed them? Who moved them
    in the Research--who moved the Research Deputy Chief into that
    position?
        Mr. Dombeck. I assume that it probably would have been
    Chief Robertson that was in that----
        Senator Stevens. And who was the National Forest System
    Deputy Chief?
        Mr. Dombeck. Gray Reynolds; that would have likely been
    Jack Ward Thomas.
        Senator Stevens. Where did--you say the people that came in
    were long-term forest employees. Any of them foresters?
        Mr. Dombeck. The Deputy Chief for National Forest Systems,
    Bob Joslin, is a--has broad experience across the agency. I
    believe his degree is in--he is classified as a forester. I
    believe his degree is in forestry. And as I----
        Senator Stevens. Where was he before you brought him into
    that position?
        Mr. Dombeck. He was a Regional Forester in Atlanta. Prior
    to that he was Assistant Director of--Deputy Regional Forester
    in the intermountain region. Was he not a Deputy Director of
    timber management?
        He has very broad support across the board from both the
    timber industry, the employees, and the conservation community.

                                 tongass timber

        Senator Stevens. All right. Let me go to you, Mr. Lyons. As
    you know, my State used to have a very vibrant timber industry.
        It had two pulp mills and I think at the time the
    administration came in eight timber mills. To my knowledge,
    none of them are running now.
        We had a 1947 Tongass Timber Act, and then we had a Tongass
    Timber Reform Act of 1991. Under that Tongass Timber Reform Act
    we have made available, Congress made available--and I might
    add I do not think the administration requested the money--$30
    million to prepare a Tongass timber reform plan, or TLMP.
        Where is that plan?
        Mr. Lyons. Senator Stevens, as I believe you are aware from
    some meetings we have had with you and Chairman Murkowski----
        Senator Stevens. I am aware of it, but I want you to state
    it on the record.
        Mr. Lyons. Yes; I just want to let you know that consistent
    with the conversation we have had previously that we are
    committed to completing this draft TLMP plan and getting it out
    by June 20.
        Senator Stevens. The administration came into office in
    1993. TLMP was completed and ready for final approval. And the
    administration directed the then Regional Forester to
    disapprove it. And we can prove that.
        You actually asked him to prepare two opinions and finally
    told him to sign one. And he resigned after he did what he was
    told, a Mr. Barton.
        All right. Now, it was finished in 1993. This is 1997. When
    will it be finished now under this administration's plan?
        Mr. Lyons. Well, we will issue the draft here early this
    summer. Then we will go through a comment period and hopefully
    wrap it up soon afterward.
        Senator Stevens. And what will be the timber supply under
    that plan?
        Mr. Lyons. I do not know, sir.
        Senator Stevens. Is it not in final draft now?
        Mr. Lyons. But I do not know what the actual numbers are.
    They are in the process of completing their analysis now, and
    that is a decision for Regional Forester Janik to ultimately
    make.
        Let me correct my statement, Mr. Stevens. I want to be
    clear that--actually, this is the final rod. So when this goes
    out, we will have to deal with an appeal process, which I am
    sure we are going to hear a lot of in potential litigation. So
    I do not mean to imply this is another draft. This is the plan.
        Senator Stevens. How much have you spent on plans in other
    forests? Have you spent $30 million on any other forest?
        Mr. Lyons. I hope not. I do not know what our total
    expenditures have been for forest planning.
        Senator Stevens. Well, would you give me for the record a
    listing of the plans you have prepared and how much they have
    cost?
        Mr. Lyons. Yes, sir; we can provide that.
        [The information follows:]
                             Land Management Plans
        The Records of Decision for the Land and Resource Management Plan
    (LRMP) revisions have been published for the following five National
    Forests:
      --Black Hills (South Dakota, 3/97).
      --Rio Grande (Colorado, 12/96).
      --Targhee (Idaho, 4/97).
      --Francis Marion (South Carolina, 3/96).
      --National Forests in Texas (3/96)
        The Record of Decision for the Tongass National Forest in Alaska is
    expected within the next month.
        LRMP revisions are actively underway in more than a dozen other
    forests which have already published a related Notice of Intent in the
    Federal Register.
        The costs of LRMP revisions is only now becoming possible to
    estimate based on these initial experiences. As you have indicated, the
    cost for the Tongass revision was very high and we consider this to be
    atypical. Based on figures provided by the Regional Planning Directors
    for those other five revisions noted above, we calculate that LRMP
    revisions will each take an average of $500,000 per year for four
    years, or an average of $2 million per plan.

                                 tongass timber

        Senator Stevens. The Tongass Timber Reform Act requires
    that the plan be prepared to provide timber to meet market
    demand. Do you know what the market demand is now?
        Mr. Lyons. No, I do not know precisely what it is. It is
    certainly part of the analysis that is being done as part of
    this TLMP process.
        Senator Stevens. Well, since you have closed essentially
    all the facilities, where is the demand going to come from now?
        Mr. Lyons. Well, I assume that the demand will come from
    remaining independent operators and the potential for mills to
    come back on line as there is a clear understanding of what the
    timber supply will be from the Tongass and surrounding areas.
        Senator Stevens. In the 6 years that we have been dealing
    with this plan--it is really 5, I guess, with your
    stewardship--the Forest Service has never met its own timber
    program target. Can you tell me why?
        Mr. Lyons. I think one of the issues we have had to deal
    with in the Southeast, as you know, Senator, have been
    challenges to particular sales.
        We had a challenge, in a particular large number of sales,
    the CPOW sales, which were originally offered to Ketchican. And
    that certainly has caused significant delay.
        One of the things we hope to accomplish by completing the
    land management plan is to provide a sound, scientific basis
    and legal framework for fending off challenges to future timber
    sales that are prepared under the plan.
        Senator Stevens. The Tongass is still divided into two
    separate forests for management, right?
        Mr. Lyons. The Tongass actually has three areas that are
    administered. Is that right?
        Senator Stevens. That was back in the days when we were
    dealing with three separate portions of the industry that was
    purchasing timber. Why does it still have three separate
    managements when there is really no timber produced for sale
    now?
        Mr. Lyons. I really cannot speak to the management
    structure up there, Senator, but I certainly could--if Mike
    wants to address that, perhaps he could, or we could ask Phil
    Janik to follow up.
        Senator Stevens. Well, I would like to have a statement for
    the record, what is your plans for consolidation of management
    in view of the fact that there are no timber operations going
    on any longer.
        Mr. Lyons. I would be glad to address that.
        [The information follows:]

              Consolidation of Tongass National Forest Management

        Timber operations, although at a reduced level due to
    recent mill closures, are occurring under the independent sale
    program and under the terms of the KPC settlement agreement. In
    addition, the program of work in the region in all resource
    areas is such that we need to continue the management structure
    currently in place (3 administrative units on the Tongass NF).
    The workload associated with the burgeoning tourism industry is
    proving to be large, for example.

                               performance awards

        Senator Stevens. Now, in your report--by the way, you have
    just given out a series of performance awards in the Forest
    Service. How many of them actually were foresters? Would you
    put that in the record, please?
        Mr. Lyons. Yes, sir; maybe we could just get some
    clarification on what those awards are. Chief Dombeck just
    handed out the chiefs' awards last week. And then, of course,
    we hand out spot awards from time to time for outstanding
    performance.
        So maybe we will just try and put it altogether for you and
    provide that information.
        [The information follows:]
                               Performance Awards
        Foresters and forestry technicians received a slightly smaller
    percentage of performance awards in comparison with the entire Forest
    Service workforce. In fiscal year 1996, 66 percent of total FS
    permanent employees received a performance award, while in the same
    period, 61 percent of foresters and forester technicians received a
    performance award. This includes all types of awards, including spot,
    time off, extra effort, bonus, quality step increase, and gain share.
        The following table shows the total number of awards and the number
    of awards to foresters/forestry technicians for fiscal year 1996:

                         NUMBER OF AWARDS TO FORESTERS/FORESTRY TECHNICIANS FOR FISCAL YEAR 1996
    ----------------------------------------------------------------------------------------------------------------
                                                                         Permanent
                                                                        employment     Number awards      Percent
    ----------------------------------------------------------------------------------------------------------------
    Total permanent workforce.......................................          29,705          19,709              66
    Forester/forestry technicians \1\...............................          10,234           6,233              61
    ----------------------------------------------------------------------------------------------------------------
    \1\ Includes all permanent employees in the GS-460 and GS-462 Office of Personnel Management occupational
      series. These are included in the total permanent employees.

        Additionally, the Chief's Honor Awards presentation was held on
    April 10, 1997, to recognize team and individual accomplishments during
    fiscal year 1996 that were of national significance to the Forest
    Service. Awards were presented in the following categories:
      --Stewardship Award: One group award.
      --Technology Transfer: Two individual awards and one group award.
      --Distinguished, Superior, and Early Career Scientists Awards: Four
            individual awards.
      --Ecosystem Management: Two group awards.
      --Multicultural Organization Awards: One group award and one
            individual award.
      --International Forestry: One individual award.
      --Labor-Management Partnership Award: One group award.
      --Law Enforcement and Investigations: Two individual awards.
      --Internal Communications: Nine group awards.
      --Course to the Future: One individual award.

                                     awards

        Senator Stevens. I have had a complaint that since this
    administration has come into office that people involved in
    forestry do not get awards. But those who are involved in
    environmental, recreational, water service, and other things
    do.
        If that is true, I think it just proves my point that you
    are no longer a forest service. You are managing the Federal
    lands under your control for other purposes, which if this
    administration is going to do that, we ought to recognize that.
    And we ought to adjust accordingly.
        And I again say that we ought to have a recreation and
    public service entity managing the Park Service, Fish and
    Wildlife Service and the Forest Service, and save all this
    money that we are spending for people to cruise timber and do
    all the studies of timber and then not sell it. As a
    consequence, I think we are just spending a lot of money.
        I want to go back to those pictures, Mr. Dombeck. I am
    going to get back to you in a minute here.
        If any of you have timeframes, let me know because I have
    adjusted my timeframes. I do not have any timeframe that is
    going to interfere with this, this morning.
        Senator Cochran. Well, can I interrupt and just ask a
    couple questions?
        Senator Stevens. Yes, sir.
        Senator Cochran. You were very kind, Mr. Chairman, to offer
    to permit me to go ahead and ask a few questions awhile ago. I
    appreciate that very much.
        Let me just for the record officially welcome Mike Dombeck
    and congratulate him on his selection as chief. This is the
    first hearing where I have had an opportunity to claim some
    credit for his education.
        He served in my office as a legislative fellow back in the
    mideighties, and I came to respect him and appreciate his
    intelligence and hard work and good judgment. He has turned out
    to be, of course, the top career person in the Forest Service
    now and is so recognized by his selection as chief.

                               purchaser credits

        I wonder what your reaction is to the budget provision that
    has been brought to my attention with respect to the
    elimination of the purchaser credits. I am told that the budget
    submitted by the President proposes to eliminate these credits
    and its system for road construction on national forest lands.
        I am told by those in my State who are familiar with the
    practical consequences of this that this will either eliminate
    the 25-percent funds to many county governments and school
    districts because those amounts are paid based on gross
    receipts from the sale of timber.
        And if the purchasers are required to pay for the road
    construction and do the road construction out of their own
    pocket with no credits for the expense, that is going to
    eliminate some sales and drastically reduce sales in other
    forests.
        Has there been any assessment made as to what the actual
    reduction in timber sales would be in States such as
    Mississippi as a result of this change?
        Mr. Lyons. If I could, Senator Cochran, I think I will
    address that one.
        Senator Cochran. Sure.
        Mr. Lyons. The administration had proposed in the 1998
    budget the elimination of purchaser credits, which are
    basically credits that timber operators get for road
    construction.
        As an alternative, what we proposed was that timber
    purchasers build in to their bids for particular timber sales
    an estimate of the costs of road construction. And we assumed
    that would then, of course impact total bids, would reduce
    revenue to the treasury by some degree. It certainly does
    affect the 25-percent payments.
        Senator Cochran. Do you intend to do this by administrative
    decision, or are you suggesting that legislation be passed to
    authorize this elimination of that credit? What does the budget
    actually suggest?
        Mr. Lyons. I believe we have the authority to do so,
    although there is a proviso I would add, and that is to address
    the concern that you raised that some small operators,
    particularly small businesses, may find themselves in a
    position where they do not have the capital to invest in road
    construction up front.
        We would look to change the authority we have under the
    purchaser credits to expand the purchaser elect program. That
    is where a purchaser would come to the Forest Service and
    basically say: I cannot afford to build the road; you build the
    road for me. And then I would like to be able to purchase the
    timber.
        That, we would require additional authority to address.
        Senator Cochran. OK. Let me ask you this: Would you put in
    the record for us so we will know what we are talking about in
    terms of practical results of this change what the change will
    be, if any, in the amount of timber harvested and sold or the
    price impact that it will have on the cost of timber to
    ultimate consumers and users, like any additional housing costs
    and the like?
        Could you do that analysis for us, or have you already done
    it? Maybe you have already done it.
        Mr. Lyons. I do not know that there would be the latter
    impact that you are concerned about, Senator, but we will
    certainly prepare that analysis and provide you the
    information.
        [The information follows:]

          Analysis of Effects of Elimination of Purchaser Road Credits

        The fiscal year 1998 Budget proposes to discontinue timber
    purchaser credits as one means of providing for road
    reconstruction and construction required in support of planned
    timber sales. These are roads planned as part of the permanent
    transportation system.
        Timber purchasers would be required to reconstruct and
    construct roads as a direct cost similar to other purchaser
    costs associated with the sale, such as felling, removing, and
    hauling the timber from the sale areas. Construction and
    subsequent obliteration of temporary roads are currently, and
    will continue to be, other direct sale costs to the purchaser.
        The Road standards will not change from current
    requirements nor will the Forest Service engineering
    responsibilities to plan, locate, design, and supervise road
    construction or reconstruction change if purchaser credits are
    eliminated.
        Elimination of purchaser credits may have some effect on
    the competition for timber sales, but will not affect the
    number of sales. Those prospective purchasers without the
    financial resources to carry the costs of road construction
    until they sell the timber may no longer be unable to bid
    competitively for the timber offered.
        Consideration is on-going to determine under what
    conditions purchasers may still use the current purchaser elect
    program to have the Forest Service reconstruct or construct
    roads required by the timber sale. This would mitigate the
    impact on purchasers of eliminating purchaser credits.
        The elimination of purchaser credits would not affect the
    amount of timber offered, sold, or harvested.
        Bid prices for timber would be expected to decline as they
    reflect both the loss of purchaser credits and the possible
    additional costs to the purchasers of the costs to borrow funds
    to complete required road construction and reconstruction.
    Lower bids should cover these additional purchaser costs
    without resulting in the need to raise the prices for lumber
    and other products for the consumer.
        National forest timber receipts would be expected to
    decline commensurate with the costs of the road construction
    and reconstruction that must be completed by the timber
    purchasers without purchaser credits.
        In addition, any reduction in timber receipts would also
    reduce these payments. Because states and counties receive 25
    percent of purchaser road credits as a portion of total timber
    receipts, elimination of these credits would reduce payments to
    states and counties by a like amount.
        The Administration is concerned about the impact on
    payments to counties and is considering language which would
    provide that the costs of permanent roads would be counted as
    money received for the purposes of calculating payments to
    States.

                               timber sales level

        Senator Cochran. OK. One other question on that subject is
    that I understand that in the budget you also propose that the
    timber sale level for the southern region, region 8, be reduced
    from 835 to 675 million board feet in fiscal year 1998. Is that
    a direct consequence of the change in the purchaser credits, or
    what drives that decision?
        Mr. Lyons. No, sir; I would suggest it is a function of a
    couple things, and maybe Mike wants to comment on this,
    although he was not in a position to have a real hand in those
    original allocations.
        I think one is simply trying to make the most efficient use
    of the timber dollars we had incorporated in the 1998 proposal
    and make sure that we had adequate investments in other regions
    of the country.
        I think the other is there has been some concern that there
    is the potential for over cutting the Southeast, which is our
    most productive region. And we are trying to beef up our
    inventory and monitoring so as to assess what represents a
    sustainable supply.
        I would not suggest that we are exceeding sustainable
    harvests in the Southeast at all yet, but in the long term this
    is an issue that we are addressing.

                               beaver management

        Senator Cochran. We have a couple of parochial problems. I
    am going to just submit questions on them, but one has to do
    with research. And another has to do with control of the beaver
    population in the national forests.
        I do not know whether you realize this or not, but this is
    a problem because beavers are building dams and they are not
    controlled in the national forests. And what happens is the
    waters are flooding adjacent private landowners. And this is
    causing a big problem.
        The private landowners expect the Forest Service to try to
    do something about this. Of course, private landowners cannot
    legally go onto the public lands and tear down a beaver dam or
    blow up a beaver dam or anything to relieve the flooding on
    their crop land. But this is a serious problem. I hope you will
    be able to look into that and tell us what you are going to do
    about it.
        [The information follows:]

                                 Beaver Control

        We assume you are addressing the difficult problems we have
    had on the Delta National Forest in Mississippi. With funding
    you helped secure in fiscal year 1997, we have aggressively
    worked with the Animal Plant Health Inspection Service, Animal
    Damage Control (APHIS, ADC) and with local landowners to
    identify problem areas and treat them. In the last 19 months we
    have removed over 1,562 problem beaver and over 500 beaver dams
    on the Delta National Forest and adjacent areas. In August 1994
    we have had over 14,000 acres flooded during the summer months
    on National Forests and adjacent private lands.
        Today we have about 2,000 acres wholly within the Forest
    that we manage as summer flooded land. Through an agreement
    with APHIS, local Forest Service officers administer a contract
    with private trappers to attack problem areas on both National
    Forest lands and adjacent private drainages with permission of
    the landowners. If local landowners report a problem, our field
    people can generally respond within a few days. Most of this
    work has been done with a $74,000 appropriation this last year.
        If funding had not been provided through APHIS, this work
    would not have been possible. The operation plan calls for 2
    years of aggressive trapping and dam control, followed by 2
    years of intermediate treatments, followed by annual low level
    maintenance. Funding for the second year is not included within
    the President's budget request for the Forest Service, and
    would logically be provided through APHIS as it was in fiscal
    year 1997.

        Senator Cochran. Thank you very much.
        Thank you, Mr. Chairman.
        Senator Burns. Senator Reid.
        Senator Reid. Chairman Stevens, you have awhile that you
    are going--I do not want to interfere with you.
        Senator Stevens. Senator, go ahead. I have just been told
    that I am going to have to leave at 10:30, but go ahead. I have
    time.
        Senator Reid. Well, I will just take 5 minutes.
        Senator Stevens. If it will relieve you, I will come back,
    Senator. [Laughter.]

                           tahoe basin/forest health

        Senator Reid. Mr. Chairman, I have just a few questions.
    One of the concerns we have in Nevada is, of course, with the
    Tahoe basin. The President has agreed to come there this summer
    to hold a summit, have California and Nevada represented there,
    and look at that very distressed resource that we have.
        Talking about forests generally, though, is the Forest
    Service changing the way they do business to improve forest
    health? And I assume this picture is an example of that, is
    that true?
        Mr. Dombeck. Yes; and I discussed that early. But just let
    me elaborate on a few points again. No. 1 is that I have been
    to the Tahoe basin many times and am well aware of the forest
    health problems there.
        We estimate that we have about 39 million acres of high-
    risk or catastrophic fire. And as a result of long-term fire
    suppression and various management strategies over the years,
    we have situations where we have a very high density of trees
    now as compared to what was the natural situation.
        We might have had 100 stems per acre of ponderosa pine, for
    example, and depending upon rainfall and other things, today we
    might have 1,500, 2,000, 3,000 stems per acre as that first
    photograph on top indicates. We have not only a higher density,
    but trees competing for moisture, for the nutrients that are
    there.
        Because of the crowding, they are less vigorous, they are
    more susceptible to bug kill, to disease problems.
        What we need to do is we need to get in there and use
    whatever tool we can from the standpoint of management. The
    tools go all across the board from prescribed fire to logging,
    to thinnings, to perhaps grazing, to a wide variety of things.
        Part of the challenge we have is the social environment,
    the fact that--and again, I mentioned this earlier, that what
    people are telling us--and I assume that this is really true in
    Tahoe--that they want the forests to look like forests.
        They do not want to see a hill, a mountainside that is bug
    killed. They do not want to see a mountainside that is black
    from a catastrophic fire, nor do they want to see a
    mountainside that is clearcut.
        And what we--and we have these--we know what the
    silvicultural practices are needed to get in there and work on
    some of that stuff.
        What we need to do is build our local support base, so we
    have the level of trust, and we do not end up in court and in
    litigation and shutdowns as we have to do the things we need to
    do.
        Senator Reid. To do the things that you have indicated you
    need to do, do you have the resources to do it, thinning and
    all the things you have mentioned?
        Mr. Dombeck. No.
        Senator Reid. So what are we----
        Mr. Dombeck. We are projecting that in 1998 we will be able
    to do 800,000 to 1.3 million acres using a variety of tools.
    And what we would like to do is be able to do at least 3
    million acres a year to sort of catch up on the backlog.
        And let me just give you a contrast to the expense. For
    example, some of the practices we can do for $10 to $15 per
    acre to maybe $100 per acre. When we deal with suppression in a
    catastrophic wildland fire, we can be talking anywhere from
    $1,000 to $4,000 an acre in cost of dealing with suppression.
        So what I am--the point I want to get across is we need to
    get in there and manage this before the trees die. We need to
    have an environment where we are not dealing with these
    catastrophic fires, that we have the appropriate stand
    densities and make sure that we have a public awareness of the
    problems.
        Senator Reid. Do you see then, Dr. Dombeck, more fires
    coming with the management that obviously is not going to take
    place?
        Mr. Dombeck. Well, the trend of acres of severe fires has
    been increasing over the last couple of decades. In fact, I
    think fires of the 6 million-and-some acres that burned last
    season, most of that was on Bureau of Land Management lands
    just because we had high moisture levels in a lot of the
    forests.
        And of course that--there was higher moisture levels in the
    forests, but also we had increased grass growth on some of the
    BLM lands.
        Senator Reid. So in answer to my question it is ``yes,''
    there will be more fires unless you get more management tools
    in there.
        Mr. Dombeck. Yes.

                                 water quality

        Senator Reid. What about water quality? We of course are
    concerned about that also in the Forest Service.
        Mr. Dombeck. Well, I think water quality is part of the key
    original mission of this agency, of sustaining favorable water
    flows.
        But a lot of the things that we need to do in investing in
    watersheds, in addition to the vegetation management practices,
    is bringing roads up to standards, roads that may have been
    built decades ago.
        For example, I think the roads money requested is for about
    2,300 miles of roads. But of that, only 300 miles are new
    roads. The remaining 2,000 are upgrading and----
        Senator Reid. With the floods we had around the first of
    the year in northern Nevada this year, we believe a lot of that
    was because of the watershed problems that we had in the
    forests. And this is happening in other places in the country,
    is that not true?
        Mr. Dombeck. I think--you know, one of the most important
    things that we can do is practice the silviculture and the land
    management practices that will keep the topsoils on the land,
    keep the sediments out of the streams. And we know how to do
    most of those things.

                               recreation demand

        Senator Reid. My last question--I really appreciate my
    friend from Alaska allowing me to take my time out of sequence.
    Since I have been here this morning at least, there has been a
    lot of talk about the cutting of trees, which I know is
    important. But in the areas in Nevada we are more concerned
    with recreational use of forests.
        Is there anything that the Forest Service can do to meet
    the public recreation demands in the national forests, which
    are becoming more intense each day that goes by in Nevada?
        Mr. Dombeck. Well, recreation, as again I mentioned
    earlier, is one of the growth areas, based on the demographics.
    We have some 80 percent of the people in the United States
    living in large urban areas.
        With the growth they are experiencing in Las Vegas and so
    on, we have had a--I see the 10-year change in Nevada has been
    from 2.1 million recreation visitor days in 1986 to 3.8 million
    in 1996.
        So there has been tremendous growth in this area. And we--
    --
        Senator Reid. And frankly during that period of time, we
    have done very little to help the forests as far as improving
    the recreational areas or even putting toilet facilities in
    some of those that are badly needed because of the almost
    doubling of use in less than 10 years.
        Mr. Dombeck. That is right. As a matter of fact, we have a
    significant backlog in maintenance of campgrounds, trails, and
    various facilities.
        Senator Reid. Many of the facilities in the area right
    outside Las Vegas were built during the depression by the CCC
    workers and have not been upgraded basically since then. And
    that is a significant problem for us.
        Thank you, Mr. Chairman.
        Senator Burns. Senator Stevens.
        Senator Stevens. Thank you.
        Senator Reid, I am certain that Nevada could manage those
    forests a lot better than they are being managed now for
    recreation, if that is what you want to do with them. And I
    would be happy to talk to you about that sometime.
        I think we ought to look at finding a way we can have this
    recreation managed without the tremendous cost of playing like
    we are going to manage the forests, the national forests, for
    forest production.
        Mr. Lyons, the Sierra Club's announced position by vote
    nationally was that there be no harvest of timber, commercial
    harvest of timber, from the national forest lands. You are
    aware of that, are you?
        Mr. Lyons. Yes, sir.
        Senator Stevens. Are you a member of the Sierra Club?
        Mr. Lyons. No, sir.
        Senator Stevens. Are you, Mr. Dombeck?
        Mr. Dombeck. No, sir.
        Senator Stevens. Have you had correspondence with the
    Sierra Club concerning that matter, their position?
        Mr. Lyons. Me personally? No, sir.
        Senator Stevens. The Department.
        Mr. Lyons. I cannot speak to what----
        Senator Stevens. Well, I want to make a request that I be
    given a copy of the correspondence that you have received and
    the replies you have given the Sierra Club pertaining to their
    concept of national policy not to harvest timber from the
    public lands, particularly from the Forest Service.
        Mr. Lyons. I would be glad to that, sir.
        [The information follows:]

                           Sierra Club Correspondence

        The Forest Service does not recall having received any
    specific correspondence from the Sierra Club regarding their
    relatively new policy against timber harvest on public lands.
    We have searched our databases covering our tens of thousands
    of documents without finding such correspondence. We will
    continue to keep this request in mind should any correspondence
    on this subject be received in the near future, and would be
    happy to provide copies of it at that time.

                               insect and disease

        Senator Stevens. All right. Let me shift over to the
    problem of the insect kill in my State. In your report, which
    is forest insect and disease conditions in 1995, published in
    December 1996, states that the number of trees that died in
    1995 from infestation totaled 27 million trees in Alaska.
        That represents a mortality of over 1.2 billion board feet
    of timber resource or approximately 4 years' worth of harvest
    volume from the Tongass National Forest.
        To my knowledge, that has not been a beetle kill in the
    area that was left open to harvest. I could be corrected on
    that, but my memory is we have a 17 million acre forest; 1.7
    million acres was left open to harvest originally under the
    1991 act.
        And the Department has now withdrawn for administrative
    purposes 600,000 of that. So we are down somewhere to around
    1.1 million acres being available for timber harvest.
        To your knowledge, is any of the beetle kill in the 1.1
    million acres that is still open for harvest?
        Mr. Lyons. I could not tell you that specifically, Mr.
    Chairman. I will have to get you that information.
        [The information follows:]

                    Harvestable Tongass Beetle Killed Timber

        In 1995, the spruce beetle infestation in Alaska totaled
    893,000 acres. The infestation increased in size to 1.1 million
    acres in 1996. Of the 1.1 million acres, 1 percent or 12,730
    acres were on the Tongass National Forest. These acreages are
    where the beetle is currently active and tree mortality is
    occurring.
        The 27 million figure that you got from our report was
    misquoted in the testimony. The number represents trees
    reported as having died in 1995, not the number of acres.
        None of the 12,730 acres of spruce beetle infestation
    reported in 1996 on the Tongass National Forest, is available
    for harvest. Beetle kill in the Taku River Drainage and on the
    Dall Island is in a land use designation of semiremote
    recreation. Beetle kill in the Stikine River delta area is in a
    land use designation of wilderness. These are the land use
    designations in Alternative 11 of the Tongass Land Management
    Plan revision (preferred alternative).

                                  takoo river

        Senator Stevens. I have searched this report, and I do not
    see it, although it does talk about the Takoo River infestation
    at 3,900 acres, Taquin River Delta at 2,040 acres.
        I do not know of any, but my problem is this: In view of
    the fact that it is very costly to use this process--and, Mr.
    Dombeck, you might want to comment--it is my understanding that
    that timber was put up for harvesting in selected areas to stop
    the flow of this natural fire. It is worse than a fire.
        The amount that was lost in the last year alone for insect
    kill in my State is worse than the largest fire in the history
    of Alaska, which was some 20 million acres.
        Now these 27 million trees are gone. We still have less
    than 1.1 million acres available for timber harvest. Why has
    not some of this timber in these infested areas been opened to
    harvest and get some money out of it, so that you can finally
    achieve the objectives of trying to control this insect kill.
        It is more than beetles, I understand. It is--I guess the
    worst part is the beetle kill, but there are lots of other
    worms up there, I understand, that are feeding on them, too.
        But why has not some of that been put up for harvest?
        Mr. Dombeck. Well, I cannot speak to the specific areas. I
    do not know if anyone here has the detailed knowledge of the
    areas.
        Senator Stevens. The Forest Service just stood by and
    watched a natural, the equivalent of a fire, 27 million trees
    killed in a year. And it is a footnote in a report. And we are
    arguing over having access to 1.1 million acres, which was
    reserved for timber harvest and is now shut down.
        In effect, you have done what the Sierra Club wanted. You
    have shut down the whole State of Alaska to timber harvest. I
    want to know, is this your goal?
        Mr. Lyons. It is not the goal. Let me just respond, Mr.
    Chairman, that I do not know the details either of this
    specific case, but it certainly would be our general practice
    in the national forests that when we have a situation like
    that, it is appropriate to salvage as much of the timber as
    possible, sales will be put up and they will be salvaged.
        Of course, the Tongass is operated in a somewhat different
    way than the other forests of the country because of the
    management plan. But we would have to get the details of that
    for you and see if we can explain that to you, sir.
        [The information follows:]

                         Tongass Beetle Infested Timber

        There is a large and serious spruce bark beetle infestation
    that has been occurring in Southcentral Alaska on the Kenai
    Peninsula. The Forest Service has been working with the State
    of Alaska, other federal agencies and the public to try to
    resolve this complex issue.
        The primary insect infestation area is located
    approximately 500 miles from the Tongass NF. It is widely
    spread in the interior of Alaska and in Southcentral Alaska,
    and is typically much smaller and of shorter duration in
    Southeast Alaska. Approximately 2 percent of the beetle damage
    is located on National Forest System lands; 1 percent each on
    the Tongass and Chugach National Forests. Due to the nature of
    the forests in Southeast Alaska insects and diseases have had
    limited effects on overall timber availability. Also, timber
    harvest is not shut down on the Tongass NF but has been reduced
    because of recent mill closures.
        The 1979 Tongass Land Management Plan was the first forest
    plan completed under the National Forest Management Act of 1976
    and was updated in 1986 and 1991 through plan amendments. In
    recent years a great deal of effort and funding has gone into
    revising the forest plan (approximately $13 million). The
    Record of Decision for the revision has been recently signed.
    The new forest plan will provide for sustainability in all the
    resource areas and consideration of the impact on people and
    communities. The new forest plan revision establishes an annual
    sale quantity (ASQ) of 267 mmbf.

                                infested timber

        Senator Stevens. Well, I have been around government a long
    time, you know. I was assistant to the Interior Department.
    Before that I was a U.S. attorney, and I have been around here
    now for 29 years. I have never seen Federal employees ignore
    the law to the extent that you all have.
        You have spent now $30 million studying 1.7 million acres
    to see how much timber should be harvested out of it over a
    period since 1993. In the same period of time, you are losing
    annually, losing, more timber from these beetle kills and these
    insect kills than we have ever lost to wildfire.
        And yet you continue to spend the money studying that one
    area that is open to timber to prevent it from being timber
    harvested and just stand by and watch this other timber just go
    down. It is my understanding that it is spreading so badly
    now--and again, I am quoting from your own report.
        There is increasing concern that the endemic and graver
    beetle populations in budworm impacted areas may take advantage
    of the stressed trees and explode to outbreak proportions.
        Also of concern to biologists is the predicted crash in the
    red squirrel populations. Red squirrels are highly dependent
    upon spruce cones for winter food. Interior spruces have not
    had a cone crop for almost 5 years.
        And to my knowledge, no one has ever come to my office and
    said: We would like to have your help trying to save some of
    these trees.
        You are trying to save the trees from cutting in
    southeastern in 1.1 million acres, spent $30 million to prevent
    cutting. And at the same time we are losing some 27 million
    trees a year to this invested area. Then you wonder why we are
    concerned about the management of the Forest Service under this
    administration.
        That indictment is so bad in my opinion that you all ought
    to offer your resignations. You are not carrying out the law.
    And I just--I get so frustrated, I cannot even hardly think
    when I see what is happening to my State since you all have
    come into office.
        It is probably the worst, worst situation I know of in the
    history of the U.S. Government from the point of view of
    management.
        I will have some further questions later. I will submit
    them for the record.
        Thank you, Mr. Chairman.
        Senator Burns. Senator Bumpers.
        Senator Bumpers. You have been there since January, and you
    have done an awful lot of damage, Mr. Dombeck, according to
    Senator Stevens.
        Millions of acres of beetles have infested the forests, and
    you will not let him cut anything off of it. You have been
    there 4 months, and you have not stopped the beetles.
        Now you say you are not a member of the Sierra Club, is
    that correct?
        Mr. Dombeck. That is correct.
        Senator Bumpers. And you, Mr. Lyons, you are not a member
    of the Sierra Club?
        Mr. Lyons. No, sir.
        Senator Bumpers. You are not old enough to remember the old
    question, ``Are you now or have you ever been a member of the
    Communist Party,'' are you?
        Mr. Lyons. I have read about it.
        Senator Bumpers. I am not going to ask, do not
    misunderstand.
        Mr. Lyons. Thank you, sir.
        Senator Bumpers. Mr. Dombeck, what authority--I was really
    interested to follow up on what Senator Stevens said.
        What authority do you have under existing law to declare an
    area salvage because of beetles or natural disasters and put
    timber up for sale because of it?
        Mr. Dombeck. I would have to----
        Senator Bumpers. And let me pursue that one step further.
    Is the law different on the Tongass than it is on forests in
    the lower 48 in that regard?
        Mr. Dombeck. Staff tells me the law is not different.
        Senator Bumpers. The law is the same?
        Mr. Dombeck. Is not different. Is that correct?
        Senator Bumpers. Well, then the question is: What authority
    do you have to determine that an area should be declared
    salvage and harvested so that it will not be lost?
        Mr. Dombeck. Well, I--the authority, and I can cite several
    examples of where fairly rapid salvage has occurred, of course
    Hurricane Hugo, some of the storm damage that occurs from
    hurricanes, from tornadoes.
        In fact, I think in your State, Senator Burns, in the far
    south, the northwestern corner of Montana and northern Idaho, I
    know it hit Idaho with a very severe ice storm that broke trees
    off this big around.
        And our employees are continually doing surveys. What we
    need to do is get in here and manage the forests to prevent
    those kinds of problems over the long haul. Much of what we are
    talking about here is, in a sense, not a silvicultural problem.
    It is a social problem, the way that people feel about forests,
    that we are dealing with.
        We have some of the best foresters, silviculturists in the
    world working for these agencies, and--let me maybe ask Dave or
    Janice if they would like to elaborate on the specifics of the
    authority.
        Senator Burns. Well, if I might, excuse me, if the Senator
    would yield, that is not answering his question.
        Senator Bumpers. That is what I was just getting ready to
    say. Go ahead.
        Mr. Unger. I was just going to amplify a little by saying
    that out of our 1998 planned timber program about one-third is
    expected to be composed of salvage sales based on insect or
    disease damage or other disasters.
        Senator Bumpers. Well, let me reiterate the question. Do
    you have legal authority, to declare that an area has been so
    invested with beetles or some other insect and will continue
    and that the forest will be lost for any productive reasons
    unless it is cut?
        Do you have the generic authority and law to declare an
    area a salvage area because of insect infestation?
        Mr. Unger. My understanding is that we can conduct salvage
    sales for that purpose under our existing authority. There are
    some cases where we have to ask for special permission, if it
    is in a wilderness area, and, therefore, would require some
    treatment.
        Senator Bumpers. What is your special permission? Who do
    you get it from?
        Mr. Unger. I believe that we get it from the Secretary of
    Agriculture.
        Senator Bumpers. Are you familiar with the situation that
    Senator Stevens was alluding to, that has been so severely
    damaged by beetles that it should be declared salvage and
    harvested? Are you familiar with that area that he is talking
    about?
        Mr. Unger. I am not familiar with the situation----
        Senator Bumpers. Are any of you?
        Mr. Unger [continuing]. That the Senator brought up.
        Mr. Lyons. No, sir.
        Mr. Dombeck. The briefing that I have on that topic--and we
    will verify this again for the record--is that about two-thirds
    of the infestation is on State and private lands. About 1.1
    million acres of active and newly infested areas were detected
    in 1996, about half a million acres on the Kenai Peninsula and
    about 154,000 acres in the Copper River area.
        Senator Bumpers. Well, I may have misunderstood Senator
    Stevens. I thought he was alluding to 30 million acres.
        Mr. Dombeck. And we will double check that for the record.
        Senator Bumpers. Well, send me a copy of that, too. I am
    interested in that.
        In all fairness, Senator Stevens and I often disagree on
    these issues. But I must say what he said this morning, if that
    were true, that would be very disturbing to me.
        [The information follows:]

                     Spruce Beetle Killed Timber in Alaska

        Of the 1.1 million acre infestation reported in 1996,
    12,730 acres (1 percent) occurred on the Tongass National
    Forest. A total of 757,111 acres (67 percent) occur on State
    and private lands including Native Corporation lands.

      ACRES OF SPRUCE BEETLE INFESTATION IN ALASKA BY OWNERSHIP REPORTED IN
                                      1996
    ------------------------------------------------------------------------
                    Ownership                      Acres          Percent
    ------------------------------------------------------------------------
    State and private.......................         418,357              37
    National Forest:
        Tongass NF..........................          12,730               1
        Chugach NF..........................          14,042               1
    Other Federal...........................         346,873              31
    Native Corporation......................         338,754              30
                                             -------------------------------
          Total.............................       1,130,756             100
    ------------------------------------------------------------------------

                                     roads

        Senator Bumpers. Let me ask you, regarding timber,
    purchaser road credits do you have generic authority now in a
    timber sale to declare that you are not going to allow, I mean
    road building, to be a credit against the contract price? Do
    you have the authority to do that now?
        Mr. Lyons. Yes, sir.
        Senator Bumpers. You do have?
        Mr. Lyons. I believe so.
        Senator Bumpers. Congress gave it to you?
        Mr. Lyons. Well, Congress gave us the authority to
    establish road credits. So that is kind of an additional
    authority we have. We do not have to offer credits on any
    particular sales.
        Senator Bumpers. So if you do not want a sale to include
    credits for building roads, you just do not include that in the
    request for bids.
        Mr. Lyons. It would be part of the contract.
        Senator Bumpers. Pardon?
        Mr. Lyons. It would be part of the contract, part of the
    proposal for that particular sale. Yes, sir; we would like not
    to do it.
        Senator Bumpers. You know, this is not all that big, but
    just as a lawyer, I want to get this straight. You say it would
    be part of the contract. If you ask somebody to bid on a tract
    of timber and then also, as a part of that proposal, tell what
    part of the cost will be road building, if you do not put the
    road building part in it, whose obligation is it to build a
    road?
        Mr. Lyons. It would be the purchaser.
        Senator Bumpers. And he does that at his own expense?
        Mr. Lyons. Yes; and that is why we would anticipate it
    would certainly affect the price he bid for the timber.
        Senator Bumpers. So what he would do, if he were going to
    bid $100,000 for the timber, and in his own mind it was going
    to cost him $30,000 to build the road, he would just bid
    $70,000?
        Mr. Lyons. Yes; he would be bidding less. That is correct.
        Senator Bumpers. But he would just personally take into
    consideration the cost of the road building.
        Mr. Lyons. Yes, sir.
        Senator Bumpers. Without you mentioning it in your
    contract? Would your contract not provide that he was to build
    the road? Request for bids?
        Mr. Lyons. Ordinarily, and it has been a long standing
    policy, that we would provide for a first-year credit for those
    roads. If we elected not to, then we would make that clear up
    front.
        And then the purchaser would have to take that cost into
    consideration in making whatever bid he or she would make for
    the timber.
        Senator Bumpers. Does the Forest Service ever build roads
    to fulfill a contract?
        Mr. Lyons. Yes, sir; in two ways. One is we do continue to
    build some roads. We are mainly focused on multipurpose roads
    now--that is, roads that provide recreation access, et cetera--
    that will allow entry into new units. And that is with
    appropriated dollars.
        There is another mechanism, though, that is used somewhat.
    And that is where small businesses elect to have the Government
    build the roads for them, rather than accept credit. And we
    call that the purchaser elect option.
        Senator Bumpers. Well, I was just curious as to how the
    program worked.
        In my State we were ravaged by tornadoes back in early
    March. And I flew from Little Rock down to Arkadelphia, and you
    could just see the swath of timber all the way from Little Rock
    to Arkadelphia, in places one-quarter mile wide and other
    places as much as one-half mile wide, where the timber was just
    leveled.
        That is private timber, so you do not have to worry about
    salvage sales. The amount of timber destroyed on the forest,
    the Ouachitas, was fairly limited, I think.
        But my question is this: We have about 13,500 acres valued
    at $6 million in the area that was hit by the tornado, 13,500
    acres. Now, this is privately owned timber, and they will
    salvage that timber and get what they can out of it, I suppose.

                                  stewardship

        But the question is: Some of them are having a terrible
    time with debris clearing, site preparation and replanting.
    There is no money in SBA, and there is no money in FEMA to do
    that. Does the Forest Service have any fund that could possibly
    be tapped for that purpose?
        Mr. Lyons. I believe we would, Senator. And I think we
    could probably fund that through the stewardship program under
    the State and private portion of our budget, particularly----
        Senator Bumpers. Say that again. I did not understand.
        Mr. Lyons. Under the stewardship program, which is in the
    State and private segment of our budget, we have provisioned
    for site preparation and replanting, as well as other landowner
    assistance programs. So I would imagine that we could work with
    the State forester to develop a proposal and get that area
    cleaned up.
        Senator Bumpers. Well, I would like to nail that down.
        Mr. Lyons. And we will second that. We would also like
    folks to know that the stewardship program is available because
    it is an extremely important tool for us to assist private
    landowners.
        Mr. Dombeck. And we will provide you the details of that in
    writing. Those funds are somewhat limited because of the size
    of our State and private program, but there are--we will get
    you that in writing.
        [The information follows:]

                                  Stewardship

        The Forest Stewardship Program and the Stewardship
    Incentive Programs were established by Congress under the
    provisions of the Cooperative Forestry Assistance Act of 1978.
    Together, the purpose of the programs is to provide financial,
    technical, educational, and related assistance to State
    Foresters in order to help non-industrial private landowners
    manage their forest lands.
        The Programs emphasize managing and enhancing the
    productivity of timber, fish and wildlife habitat, water
    quality, wetlands, recreational resources, and the aesthetic
    value of forest lands. State Stewardship Committees in each
    State identify program priorities for their State, which could
    enable a focus on site preparation and replanting activities
    within available program resources.
        Landowner requests for stewardship assistance through the
    programs exceed appropriated funds available. Even as
    appropriation levels have decreased, requests for stewardship
    assistance have increased. In some states, three times as many
    landowners request assistance as receive it.
        In the past, funds for debris clearing and site restoration
    after natural disasters such as the recent tornadoes in
    Arkansas, have been provided by the Federal Emergency
    Management Agency (FEMA), or through supplemental funding
    provided by Congress.

                                    fte hits

        Senator Bumpers. Just 1 second, Mr. Chairman.
        Now, you are going to take a 14-percent FTE hit in 1998, is
    that correct?
        Mr. Lyons. I believe so.
        Senator Bumpers. You are the biggest employer in the
    Department of Agriculture.
        Mr. Lyons. That is correct.
        Senator Bumpers. And I assume, my staff tells me that the
    plan is to leave you with 36,000 FTE's. That 36,000, is that
    after the 14-percent cut in personnel?
        Mr. Lyons. No; let me be clear. Right now we are at 37,184,
    actually 35,784. That is the adjusted total. And we would go
    down in 1998 under our proposal to 34,943. So that is not quite
    14 percent, not at all. I will have to check the numbers.
        Senator Bumpers. Well, Mr. Chairman, I will not take any
    more time. We may submit a couple questions in writing, but I
    just want to make this comment. Everybody applauds reduction in
    force.
        And the Vice President has been very actively involved in
    it, and the President has made a great deal of it. And that is
    fair. They have done a really great job of reducing the number
    of government employees in this country.
        But I keep looking at this and monitoring this, and I
    wonder sometimes when that is going to become
    counterproductive, because it certainly will become
    counterproductive if we continue it at the current pace.
        I do not know at what level that occurs, but we depend on
    people like you to come here and be honest, even if it means
    saying to the Vice President: You know, what you have done to
    us is going to substantially reduce our effectiveness in
    managing the forests and running this department.
        Mr. Unger. Senator Bumpers, I think the 14-percent figure
    you are referring to may refer to the loss in employees over
    the past several years.
        Senator Bumpers. Is it?
        Mr. Unger. Yes.
        Senator Bumpers. I would say that is an awful big hit for 1
    year.
        Mr. Unger. Not for 1998, but for 3 or 4 years.
        Senator Bumpers. OK. Well, my statement still stands, Mr.
    Chairman. I thank you.
        Senator Burns. Senator Dorgan.

                                   grasslands

        Senator Dorgan. Mr. Chairman, thank you very much. I regret
    I was delayed because of other committee commitments.
        Let me just ask one question of the Chief of the Forest
    Service. It is a question we discussed the other day. The
    Forest Service is engaged in creating a revised Forest Service
    plan, which includes the grasslands in North Dakota.
        I had received assurances, and the folks who are involved
    in grazing associations had received assurances, from the
    Forest Service that ranchers and environmentalists and other
    interested parties would be consulted as the plan is developed.
        And as I indicated to the Chief, those involved in grazing
    have told me recently that there has been no consultation. I
    hope that you perhaps have had an opportunity to look into
    that, or will at least, and tell me what kind of approach will
    be used to bring everyone into the consultation process in this
    development of a plan.
        Mr. Dombeck. Yes; I talked to the staff about that after
    our meeting, and perhaps I will have Janice respond.
        Ms. McDougle. The effort that is underway in the great
    plains is probably the most significant effort in terms of
    looking at the grasslands in a holistic way. The assessment
    covers national forests. And the plan is that at the time the
    assessment is completed, the forest plans will be revised to
    reflect those outcomes.
        There have also been a number of other efforts. I led a
    national grasslands review 1 year ago. And since then we have
    formed the National Grasslands Council, who are dealing with
    some of the things that we heard from the over 300 people,
    permitees, ranchers, State and local officials, and just
    citizens within the national grasslands, to respond to their
    issues and concerns.
        A number of other things are currently under way. So, I
    guess the answer to your question is yes, there will be
    opportunities for the local people to provide input into what
    ultimately are forest plan decisions.
        Senator Dorgan. But that opportunity must be
    contemporaneous. And what I think grazers said to me is, they
    see something going on there behind closed doors, whatever it
    is. And they were assured that during this process there would
    be a consultative role, and they say that there has been no
    effort to consult with them.
        Mr. Dombeck. Well, just let me assure you that will be
    fixed.
        Senator Dorgan. Please do.
        Mr. Dombeck. And we will get back to you with a response on
    what action was taken. One of, the hallmarks that we need to do
    is the more we work together with people, that does not mean we
    always agree, and with local communities, the better
    understanding we have and I think the more buy-in and better
    results of the plans.
        What is really important is what happens on the land. With
    the technical expertise that our people can provide, the better
    local relationships we can have. That is what I want to work
    for. And I think that is the way we get results on the ground.
        So I will assure you that will happen.
        [The information follows:]

                           Northern Great Plains Plan

        The Plan revision process for the Northern Great Plains
    encompasses three national forests and multiple national
    grasslands within Wyoming, Nebraska, and both North and South
    Dakota. The stewardship goal of the effort involves extensive
    collaboration with people and communities across the four
    States. To date, the planning team has reported multiple
    involvements with grazing associations through presentations,
    visits, and other communications by District Rangers, Forest
    staff, and the planning team.
        The engagement of people in this process is ongoing and
    open. As a special event, during the week of June 9-13, the
    North Dakota National Grasslands will be hosting a series of
    public open houses across the State. Grazing associations not
    involved to date may contact the Planning Team to discuss
    further opportunities for meaningful and productive
    participation.

                                    grazers

        Senator Dorgan. Well, I appreciate that. Most of the
    folks--you know, we have a wide range of people who want to be
    involved in the multiple uses of this land. And among them, and
    important among them, are the grazers.
        And these are ranch families who in North Dakota are
    generally small ranchers. We are not talking about large
    ranchers. They are good stewards of the land.
        When a plan is being developed, they would very much like
    to be a part of the consultative process. And so I appreciate
    your commitment on that.
        I have no further questions, Mr. Chairman.
        Senator Burns. Thank you, Senator Dorgan.
        I have one question. I have to run real quick here, and I
    will turn it over to Senator Craig.

                             bison contingency plan

        Tell me about contingency plans or what you are talking
    about with the Park Service with regard to Yellowstone Park and
    our little problem with bison.
        Mr. Dombeck. Well, as you know, Senator, the Forest Service
    is not in the driver's seat on that issue. What I have offered
    to Montana and the Park Service and those involved is that we
    can provide a relief valve on the Gallatin from the standpoint
    of winter range and those kinds of things. We are perfectly
    willing to play whatever role we can in helping solve that
    bison issue.
        If it takes some land acquisition, if it takes some special
    practices, whatever we can do, the Forest Service is there to
    help be a relief valve until that issue is resolved.
        Senator Burns. Would it be any advantage to you if you
    might advise the Park Service on the care and capacity they
    have within the boundaries of that park?
        Mr. Dombeck. Well, I think our folks at the local level
    have been talking. Dave Garber, the forest supervisor, I am
    sure has close interaction with the Park Service and the
    various things that have occurred this winter.
        My hope is that that problem would be solved out there.

                                  brucellosis

        Senator Burns. I think it is being solved, but we are
    taking the heat in the State of Montana for very, very bad
    management as far as the Government is concerned. And I can
    understand the frustration here.
        We only made one mistake a couple years ago. Mr. Lyons
    knows what that is. I capitulated on a situation I wish we had
    not capitulated on now.
        But there are people in Montana that are concerned about
    the extension of the boundary of that park to accommodate
    animals and still no plan is in place to deal with the
    eradication of brucellosis. And that has us all concerned in
    the State of Montana. You might not think it is a big deal. By
    God, I think it is.
        Mr. Dombeck. Well, we do think it is a big deal.
        Senator Burns. Well, then I would--then I want to see more
    action especially with the higher ups here, because I think
    someplace somebody has to start the discussion around here that
    we have a problem out there, and it is not ours.
        It was created by people who have eroded and they have
    equivocated on a court order that was handed down, worked out,
    agreed to by Forest Service, States, and Park Service.
        And yet they have equivocated on that and eroded that plan
    to where there is no integrity to it at all now. And that is
    why we had the incident Sunday of a couple, 3 weeks ago,
    because there is frustration on both sides. And that is what
    happens when you allow those things to happen.
        And I will tell you that we are very concerned, Mr.
    Dombeck, about the extension of that boundary, because once you
    start that, how far does it come, and how much is it going to
    impact the livestock industry and, yes, human health in the
    Gardner area in the Yellowstone Valley and the water quality?
    We are concerned about those things.
        Everybody thinks all the great things about your forests
    and how they are supposed to look and all the great things that
    have been done on care and capacity and all the things done by
    the Government.
        Folks, I am here to tell you none has been done by the
    Government had it not been for people in the private sector
    that understood grasslands and grazing and natural resources.
        So I just want to fire that little shot across the bow. I
    will probably fight like a bearcat, because there has to be
    some kind of management of that herd inside that park. And we
    cannot do it by expanding boundaries.
        And that is going to concern you and the Forest Service,
    and I am not real sure that you have some authority to do that
    unless it takes legislative action.
        I have to make another appointment here. Senator Craig.
        Senator Craig [presiding]. My apologies, gentlemen, for
    racing in and out. Other committees were pulling me away, but I
    did want to get back to ask a variety of questions. And Mike,
    Jim, David, thank you for being with us today.
        I think you can sense by the kind of questions and the
    passion with which they are expressed that there are probably
    fewer issues in some of our Western States where you have a
    very large presence that do not draw more emotion in our
    citizens' minds and concerns than how our forests are managed,
    no matter what your perspective of them.
        I will only suggest to you the concern that Senator Burns
    has about brucellosis in the buffalo herd. It is very difficult
    for anyone to understand the impact of it unless you have been
    there. A good number of years ago, before I came to Congress,
    my father and I operated a sizeable ranch and a sizeable herd
    of cattle.
        One day we sold some cows. We got a notice that one of them
    tested positive for brucellosis. This had been after a
    concentrated effort on our part for decades to keep a clean
    herd.
        We immediately tracked it and found out that it was an
    animal we had purchased. That was not the point. The point was
    our herd was quarantined. All economics on our ranch stopped.
        And we spent over a month spending a lot of money, running
    a lot of cattle down a chute and testing them at expense to our
    business and certainly at a cost of gain to the cattle and
    health of the cattle.
        Some of these animals were pregnant, and you always risk
    aborting a calf if you move them and shove them and all of that
    kind of thing through the kind of facility that we have to to
    do these tests.
        I know there are a lot of people that say, ``Well, we have
    to run the wildlife in a natural way.''
        That is true if man does not exist or there is no interface
    with man. In this instance there is. In this instance it is
    cattle. And there can be human health involved.
        The Federal Government can cost by inaction the private
    sector a phenomenal amount of money. And it is not just a
    Montana issue. As you know, it is a regional Western issue
    because of the nature of the park and the States that abound
    it.
        And that is what we have to be concerned about. I do not
    know any other way to express my sensitivity toward the issue
    than a revolution that would take place in that three-State
    area if the Federal Government does not do their job right. You
    do have an obligation to manage that herd in a managed way, not
    a natural way.
        There are other wildlife that do not have relationships
    with domesticated animals that would transfer disease. But in
    this instance we have one.
        And I know the crisis that our business went through and
    the cost we subjected ourselves to, because it was a mistake of
    our own doing. But if it had been a mistake of the Federal
    Government, we would have been at war with the Government,
    because it was the Government who worked with us historically
    to build this kind of a situation where we did not have
    brucellosis with the testing programs of USDA and the State
    departments.
        So this is all very critical. I express that to you. Few
    people have that perspective, especially from your level unless
    you were born and raised in a livestock setting where you
    understand the critical nature of this. But out where I live
    everybody understands it pretty clearly.
        But somebody who is now playing the business of management
    of the Federal level by the book and has a vision of a
    different kind of management, that is, natural, in this
    instance it does not work. And it is very important that we
    understand that.

                           sawtooth range management

        Mike, let me thank you for the time and the cooperation you
    gave the Idaho delegation the other day in a concern that we
    have on the Sawtooth National Forest. And that concern is
    ongoing as we attempt to deal with how decisions are made and
    how plans come together and how we operate as it relates to all
    of our publics and all of our resource users.
        In the conversation that you and Dave and I had along with
    Dale Bosworth, our regional forester, the other day, as it
    relates to the grazing proposal that Supervisor Levere has put
    forth, in his testimony before a House subcommittee under the
    chairmanship of Congresswoman Helen Chenoweth, made a statement
    that really causes me great frustration, especially when I look
    at the record. His statement was, in essence, in his ability to
    manage the permits and grazing, on these critical ranges and
    habitats, with a range budget that had declined by
    approximately 30 percent in recent years.
        He did not have the money necessary. So he was trying a new
    approach, somewhat sweeping, fairly dramatic. Obviously, it has
    everybody on their toes out there and everybody back here on
    their toes.
        I went back and looked at our appropriation record in the
    area of grazing, and I found--I think I mentioned at the time
    in our discussions that it had gone up some and progressively
    over time. But I did not realize that it had gone up as much as
    it had.
        In 1994, we appropriated $16.3 million. In 1995, $18.5
    million; in 1996, $27 million; and in 1997, $38 million. Now I
    understand there were some NEPA concerns in there as it relates
    to working that program. But that is a 133-percent increase in
    appropriations to manage grazing.
        And we are all sensitive to it here, because we know the
    importance of public grazing in our Western States. But we also
    want it done in an environmentally sound consistent way. And
    that is what our figures show.
        I then have to ask this fundamental question: What happened
    to the money on the Sawtooth, or what has happened to the money
    as it relates to grazing inside the system, if we have
    increased it 133 percent, or somewhere in that area, from 1994
    to 1997, and is not on the ground working its will?
        And, therefore, supervisors make broad and sweeping
    decisions because they do not have the personnel or the time or
    the money, they say, to go in and manage the individual that
    permit these relationships as they are, by the plan, intended
    to do.
        Can you deal with that issue for me?
        Mr. Dombeck. What I can do is ask Steve, who knows the
    numbers, to comment on that. But I want to assure you one of my
    objectives is, as I mentioned the other day, to look at our
    processes and get as much money to the ground as possible. We
    have got to, we have just got to.
        Senator Craig. Yes.
        Mr. Dombeck. And I think there is complete agreement on
    that. I am going to be pushing hard to accomplish that. Let me
    just ask Steve to give you a rundown of some of those numbers.
        Mr. Satterfield. Senator, to begin with there was a major
    budget reform in fiscal year 1995. And the number you referred
    to in 1994 was adjusted to that reform. It was reformed too
    much.
        And in 1995, we reprogrammed $16 million from other
    accounts in the National Forest System appropriation to the
    range line item. In 1996, I believe we reprogrammed another $9
    million.
        So what we have here is basically a flat line total. I
    believe if we had added $9 million to the 1996 appropriation,
    it would have brought it up to about $36 million.
        Senator Craig. So you are saying 1996 was $36 million?
        Mr. Satterfield. It would have been approximately $36
    million.
        Senator Craig. Instead of the $27 million that I quoted.
        Mr. Satterfield. We can get you--yes. The Congress--the
    appropriation included $27 million in that budget line item. We
    did reprogram another $9 million into that line item later.
        Senator Craig. Was that for NEPA?
        Mr. Satterfield. It was for NEPA and grazing management
    both.
        Senator Craig. So there was actually more money than my
    figure showed.
        Mr. Satterfield. Well, there would have about a total of
    about $36 million.
        Senator Craig. What was 1997 then?
        Mr. Satterfield. It is $38 million.
        Senator Craig. $38 million. I was right on that then.
        Mr. Satterfield. Yes, sir.
        Senator Craig. So there is actually a bigger increase than
    I had suggested by my figures.
        Mr. Satterfield. Well, we are about flat from 1996 to 1997
    in real terms.
        Senator Craig. Yes; well, Mike, would I be correct in
    assuming that a great deal of range management funds
    appropriated to the Forest Service were diverted to other
    initiatives outside grazing?
        Mr. Dombeck. I am not sure of that. Let me ask Steve again.
    He follows the region by region budgets very closely.
        Mr. Satterfield. To get real precise, we would have to get
    more precise than I can be right here, but----
        Senator Craig. OK. Well, we are going to ask you to get
    real precise on this one because----
        Mr. Satterfield. But generally no.
        Senator Craig [continuing]. It is raising havoc out there.
        Mr. Satterfield. There is a lot of discussion in the budget
    restructuring system about money being moved out of range into
    other things. We have corrected it. We have moved it back. We
    think--we do not believe it has gone to other things.
        Senator Craig. Nothing went to the east side eco-study?
        Mr. Satterfield. It would have been various assessments
    against various line items for things like----
        Senator Craig. You are suggesting it could have.
        Mr. Satterfield. It could have.
        Senator Craig. One of the other areas that Supervisor
    Levere spoke to was the diversion of time for his range
    conservationists to deal with the adjudication of the Snake
    River basin water.

                                  water rights

        There has been a tremendous over filing out there by the
    Forest Service on water rights, 1,700 or somewhere near that, I
    think he told us. I guess that is a management decision.
        But, Mike, do you know if the Forest Service or the
    forester at the regional level suggested that the Sawtooth over
    file on all these water rights and acquire water rights on all
    those water areas?
        Mr. Dombeck. I do not know that. A request was made by Dale
    Bosworth. I could ask, Janice or Dave on the history of that
    particular issue.
        Mr. Unger. Senator Craig, we feel that we are filing claims
    for the water that is required to carry out the purposes of the
    national forests.
        Clearly, it takes a good deal of time of people who need to
    be knowledgeable on what they are talking about, which is why
    some of our range conservationists are so intimately involved
    in that.
        And it is a judgment that has been made by the forest and
    by the region that a management necessity has to be balanced
    with all the other management necessities.
        Senator Craig. Even though the Forest Service has operated
    out there since its beginning and had adequate water and
    supplied those needs and filed appropriately when it felt it
    needed water with the State, why all of a sudden this massive
    over filing?
        Mr. Unger. Well, I do not know that they would consider it
    over filing. But at one time, when an adjudication goes on,
    decisions are made for a long period of time to bring all this
    together in one decision.
        Senator Craig. Was there a budget consideration, therefore,
    made as it relates to this decision?
        Mr. Unger. I do not know, but I would hope that the region
    has certainly looked at this. I know that in other cases where
    we have had adjudications, we have tried to supplement funds
    available so that there would be adequate funds for the forests
    and for the region to do that.
        Senator Craig. Well, we are obviously going to take a much
    closer look at this, because it is not only frustrating, as you
    know, it is more than that. It is angering when this Congress
    recognizes the sensitivity of grazing to the environment, but
    the importance of grazing as a part of our public land resource
    use out there.
        We appropriate the money, and then the money does not get
    to the ground. And, therefore, the kind of very arbitrary and,
    I think, capricious kind of decisionmaking that the supervisor
    of the Sawtooth got himself involved in at this moment ends up,
    or at least that becomes the excuse. And that should not be
    that.

                                     trails

        Jim, I had mentioned to you in a conversation a month or so
    ago, when we were both attending an event here in town, of an
    activity going on in the panhandle that is important to the
    West, Idaho and Montana, that we had been moving in the
    direction of gearing the panhandle up to spend some money. And
    they are now doing it.
        And, Mr. Chairman, what I am talking about is a unique
    opportunity that we have in the area of recreation. You spent a
    good deal of time this morning talking about recreational
    increases in demand.
        This item is what is known as the Route of the Hiawatha,
    which is the old rail bed of the Milwaukee Railroad. It is a
    45-mile long Idaho/Montana crossing under the Bitterroot
    Divide, 11 tunnels, 9 trestles, a 1.8 mile tunnel that has our
    greatest attraction at the moment, known as Taft Tunnel, that
    goes directly under the divide itself.
        What I am told by all of the experts in this area of
    recreation, primarily mountain biking and hiking, is that this
    will not only be unique, it will be the world-class opportunity
    for about 2,500 miles of trail for mountain biking organized.
        But the stretch we are talking about, the 45-mile stretch,
    is unique because it is rail grade, and it can span an age
    group that is just phenomenal, right up through our senior
    citizens to enjoy this unique, beautiful section.
        In fiscal 1995, we appropriated some money for survey and
    design. In fiscal 1997, an additional $450,000. In 1998, we
    need about $750,000, not currently shown in the President's
    budget, to deal with Taft Tunnel, which will then open it wide
    open and begin to serve, because that is the connecting link.
        And, Jim, as I say, I mentioned this to you. I am going to
    be working on this very closely with the chairman and others,
    because if the Forest Service wants to premier some
    recreational opportunity, this is one that has a bi-State,
    regional impact.
        It is very close the chairman's State, just a few miles
    away from the Washington border. And we are working on bike
    paths coming out of the Spokane Valley that literally could
    take us all the way into that system and make that one of the
    great mountain biking areas of the world, not just the West,
    but the world.
        So that is something that I will be watching and working
    with our chairman on to resolve.
        One last thing, Mr. Chairman. All of you today, especially
    you, I think, Mike, and Jim, have talked about large increases
    in recreational demand. How do you get that measurement?
        Mr. Lyons. The numbers we have cited, Senator, come from
    the forest estimates of recreation visitor days, which is
    basically a 12-hour--it is measured in 12-hour increments.
        Senator Craig. Yes; I understand the method, but how do
    they measure, campground occupancy, passes sold?
        Mr. Lyons. I believe it is done primarily through surveys
    of Forest Service users, although I am not familiar with the
    particular methods.
        Senator Craig. Do you have a sampling system by which you
    arrive at those numbers?
        Mr. Lyons. You know, I am going to have to check with
    research.
        Senator Craig. I want you to check, because here is what I
    think you will find the answer to be: You do not have one. And
    that while we all believe there is increased recreational use,
    that about 15 years ago you departed from any sampling system
    approach, and you are now in the business of guesstimating.
    And, yes, it is probably up a couple percent each year.
        Now, I am not going to be too critical of that other than
    to suggest that if you were driving your budget by certain
    numbers, they ought to be accurate numbers.
        Mr. Lyons. I agree.
        Senator Craig. And my guess is you are on a forest-by-
    forest, region-by-region basis in the business of
    guesstimation. Now it may be reasonably accurate guesstimation,
    but do you have sampling systems that can determine the levels
    of accuracy as to rates of growth?
        Mr. Lyons. Let me follow up with you, Senator, and give you
    a detailed explanation of how those numbers are generated.
        Senator Craig. Well, I would really appreciate that,
    because it is a factor important. Do we want to redirect
    dollars, or do we want to change structure as it relates to
    that?
        [The information follows:]

                            Recreation Visitor Days

        The Forest Service tracks recreation use by Recreation
    Visitor Days (RVD's) and by Visits. A RVD is a statistical
    reporting unit consisting of 12 visitor hours. A visitor hour
    is the presence of a person on an area of land or water for the
    purpose of engaging in one or more recreation activities during
    the period of time aggregating 60 minutes. A visit is the entry
    of one person upon a national forest for the purpose of
    participating in one or more recreation activities for an
    unspecified period of time.
        Both RVD's and Visits are estimated by Forest Service field
    units and reported through a computerized reporting system.
    Field estimates are based on the application of sampling
    techniques, traffic counters and other observation methods.
    There are various ways available to display the information
    gathered: by region and by State, by activity, and by year.
        The Forest Service is also experimenting with methods to
    improve recreation use estimates. A prototype process is
    currently being tested. It is intended to provide improved
    statistical estimate of recreation use on the national forests.

                               forest management

        Senator Craig. Mr. Chairman, just one last item, and it is
    merely a comment because of the discussion that has gone on
    this morning amongst a good many of our members of this
    committee. I, as you know, chair another committee that is
    directly involved, at least from the authorizing point of view
    with the Forest Service. And I have been working on a major
    piece of legislation.
        Mr. Chairman, I say this for the value of the committee,
    because I thought it was a valuable statement made at the last
    workshop I held out West on forest management and why we may be
    in such conflict today in so many of our areas of management on
    the forests.
        The policy under which you are managing today by law is
    largely directing at a multiple use approach toward management.
    But there is no doubt that it appears that the Forest Service
    is moving toward management by biodiversity and not by multiple
    use.
        And in that, if that is true, and I believe it is based on
    the research we have done, then we are in for more conflict
    because you cannot get to where you need to get from a
    biodiversity point of view if the law suggests that you do it
    through multiple use. And, therefore, we look at it through the
    eyes and the glasses of multiple use.
        Now, I am not saying that critically. I am just simply
    saying that as a point of observation. Maybe we ought to
    change. And if we change, we change a variety of the indices
    that drive not only budgets, but thinking.
        And how we get there, I am not sure, but it is one of the
    areas that I am going to look at it as we deal with legislation
    to revise or amend some of the management processes of the
    Forest Services. My guess is it will change the--the Forest
    Service is caught in that juxtapose right now as it relates to
    whether it is management for multiple use or management by
    biodiversity.
        And one is not necessarily compatible with the other in
    many instances, or the changes significant enough to move us
    from multiple to biodiversity clearly impact a variety of user
    constituencies on the ground.
        Mr. Chairman, thank you very much.

                                 fire equipment

        Senator Gorton [presiding]. Thank you.
        For both of you, Bruce Evans has handed me a letter written
    to me about 10 days ago from two disabled veterans in
    California, who have serious problems with respect to their
    agreements for the rental of emergency fire equipment in which
    they think they have been discriminated against.
        Senator Domenici has brought this letter to my attention.
    Copies of it went to every member of the subcommittee, as I see
    it here.
        I am going to submit this letter to you and ask you whether
    or not you can promptly get us an answer so that we can respond
    to them.
        [The letters follow:]
                     Letter From John Ryan and Donald Walsh
                                                         April 7, 1997.
    Hon. Slade Gorton,
    Chairman, Interior Appropriations Subcommittee,
    U.S. Senate, Washington, DC.
        Dear Mr. Gorton and Subcommittee Members: We are both Disabled
    Veterans who are in the wild land fire fighting business, providing
    fire-ready bulldozers and water trucks to federal, state and local
    agencies for wild land fire suppression work. For many years, we have
    entered into written emergency fire equipment rental agreements (EERAs)
    with the USDA Forest Service. These agreements must be renewed every
    three years, most recently in 1996. During the 1996 EERA renewal
    process, Don Walsh raised the issue of 41 CFR Chapter 60, Section 250
    which provides that Disabled Veterans specifically benefit during
    hiring. What resulted was an attempt by Forest Service contracting
    personnel to refuse to renew Don Walsh's EERA.
        There were numerous large wildfires in California's national
    forests in 1996. John Ryan was not hired at any of those fires, Don
    Walsh was hired at only one. During said fires, we contacted the
    contracting people at each forest involved as well as personnel at
    Pacific Southwest Region headquarters in San Francisco. Unfortunately,
    the Forest Service personnel we contacted did not choose to acknowledge
    that Disabled Veterans are entitled to the same preferences in hiring
    which they bestow on other groups and individuals.
        In August 1996, we contacted Allen Amaro, Legislative
    Representative for the Disabled American Veterans (DAV), Department of
    California. After numerous contacts with Forest Service's Pacific
    Southwest Region office, Mr. Amaro arranged a meeting which was held on
    March 5, 1997 at the California Department of Veterans Affairs offices
    in Sacramento. In attendance were Douglas Lee, Assistant Regional
    Forester and David Allasia, Contracting Officer, both from Forest
    Service's Pacific Southwest Region, Tom Langley from California
    Department of Veterans Affairs, Allen Amaro from DAV, John Ryan, Don
    Walsh and Warren Walsh.
        At said meeting we asked Douglas Lee if the Disabled Veterans
    hiring issue could be resolved prior to the Interior Appropriations
    Subcommittee hearing on April 17, 1997. Mr. Lee stated that was
    unlikely and we should proceed with this course of action. He later
    confirmed this in a letter dated March 10, 1997. This is why we believe
    we had no choice but to bring this issue to the Interior Appropriations
    Subcommittee.
        As Disabled Veterans of the Korean conflict, we have endured four
    decades of discrimination by employers, labor unions, health insurance
    companies and others. Now, we have to endure discrimination by Forest
    Service bureaucrats who would rather hire their ``good old buddies,''
    some of whom are retired Forest Service personnel, during emergency
    equipment hires. We are not asking for welfare or a hand-out, we are
    only asking to benefit from the programs which were legislated by a
    grateful nation as indemnification for our sacrifices. No additional
    funds will be required to implement 41 CFR Chapter 60-250 during
    emergency equipment hires.
        We ask you to place control language in USDA Forest Service's
    budget which would require compliance with 41 CFR Chapter 60-250 for
    Disabled Veterans who are prequalified under an EERA during emergency
    equipment hires. If USDA Forest Service refuses to comply, we ask you
    to withhold a portion of their budget. We would be happy to provide
    further testimony to the Subcommittee or individual Subcommittee
    Members if necessary. We had hoped to appear personally to testify, but
    no formal outside witness hearing was allowed. Therefore, we request a
    copy of the minutes of the hearings, and any correspondence with USDA
    Forest Service on the issue.
        We thank you for your assistance in this matter.
                Sincerely,
                                       John Ryan,
                                      Water Trucks, So. Lake Tahoe, CA.
                                       Donald L. Walsh,
                                     Bulldozer Service, San Martin, CA.
                                     ______

                            Letter From Mike Dombeck
    Re Fire Equipment.
                        U.S. Department of Agriculture,
                                                Forest Service,
                                           Washington, DC, May 9, 1997.
    Hon. Slade Gorton,
    Chairman, Subcommittee on Interior and Related Agencies, Committee on
            Appropriations, U.S. Senate, Washington, DC.
        Dear Senator Gorton: This letter is in response to your inquiry
    concerning a matter raised by Mr. Donald Walsh and Mr. John Ryan,
    veterans of the Korean conflict. These individuals expressed concern
    about their not being provided preference in the ordering of equipment
    by the Forest Service in support of wildland fire suppression efforts.
        Mr. Walsh and Mr. Ryan referenced 41 CFR, Chapter 60, Section 250
    as the basis of their concern. That particular Federal Regulation
    pertains to preference to veterans for the purposes of hiring. The
    issue raised by the two gentlemen has to do with entitlement to
    preferential status when the Forest Service hires equipment under
    Emergency Equipment Rental Agreements in support of firefighting
    efforts.
        Mr. Walsh and Mr. Ryan raised this issue with our Regional Office,
    Procurement Staff in San Francisco, California, previously. In the
    response from that office, it was explained that 41 CFR, Chapter 60,
    Section 250 pertained to employment practices, not contracting actions.
    The response also explained that there is a provision in the Emergency
    Equipment Rental Agreement providing for preference in subcontracting
    with veterans. This provision is directed at the prime contractor, and
    encourages subcontracting with veterans.
        As explained in the Region's response, there are no statuary or
    regulatory requirements that preference be given to veterans in
    ordering equipment in support of our fire suppression efforts. Our
    policy on placing orders for equipment under the Emergency Equipment
    Rental Agreement is one of ordering the closest available resource
    meeting the requirements of the suppression effort. This policy is
    necessary in order to respond as quickly and efficiently as possible in
    efforts to protect life and property that is threatened in wildland
    fire situations.
        I have included a copy of the Regional Office's earlier response to
    Mr. Walsh and Mr. Ryan for your information. Thank you for your
    interest in this matter. If I can be of further assistance, please do
    not hesitate to contact me.
                Sincerely,
                                                   Mike Dombeck, Chief.

                        remarks of senator patrick leahy

        Senator Gorton. With that, Senator Leahy, you know by the
    time at which this started that this hearing has gone on for
    quite a while. I had to miss quite a bit of it and have a
    fairly extensive series of additional questions. So at this
    point, I am going to defer to you and let you make whatever
    statement you would like and ask whatever questions that you
    have.
        Senator Leahy. I will be very brief because I am supposed
    to be also at two other committee hearings.
        It is good to have Mr. Dombeck here as the Chief of the
    U.S. Forest Service to guide our national forests into the next
    century. I have been a strong supporter and a great admirer of
    the traditions and the missions of the Forest Service.
        I have confidence that it has the statutory and
    administrative ability to maintain the balance between
    multiple-use and sustained yield management of our forests.
        I have respect for the knowledge and skills of the people
    who work for it.
        But I do have the concerns I have expressed before that as
    the Forest Service faces pressure to maintain timber
    production, expand recreational opportunities, we could
    compromise that debt that we owe to our children. The debt, of
    course, is to conserve those forests for their use and
    enjoyment.
        We feel some of the same pressures, Mr. Chairman, even by
    private landowners in the Northeast. The northern forest region
    has seen some of the similar changes to its social and economic
    structures as they have had in the Pacific Northwest, different
    types of forests, similar pressures.
        Thousands of people live in the region and how do they
    maintain their economies and provide the jobs and preserve the
    environment that makes that region such a special place? I
    initiated the Northern Forest Lands Council as a way of looking
    at this and last week introduced the Northern Forest
    Stewardship Act to implement the Council's recommendations. The
    act has strong bipartisan support throughout our region,
    because it lets the communities decide and gives them a great
    deal of discretion within the 26 million acre northern forest.
        Mr. Lyons has been to Vermont. He has seen this. He has
    discussed it with our Governor and with others throughout the
    Northeast. The bill embodies the conservation ethic of the
    1990's, nonregulatory incentives in support of community-based
    goals for sustainable economic and environmental prosperity.
    Mr. Lyons and the Forest Service has made a great effort to
    share the vision these communities have.
        So I look forward to working with you, Chief, to implement
    these solutions and welcome you to come on up to Vermont
    sometime, as your predecessors have. We can show you a
    beautiful area but also show you an interesting thing on the
    small communities dealing with big problems and doing it very
    well.

                      state and private forestry programs

        I have only one question. I will submit the rest for the
    record, if I might, Mr. Chairman.
        But Chief, I would ask you: With timber harvests on public
    lands declining, the pressure on private forest lands to
    provide more of the Nation's wood supply is increasing, not
    only in the northern forest but, my understanding is, across
    the country.
        Would you agree that more attention within the Forest
    Service should be focused on State and private forestry
    programs? And if so, how are we going to do that, either in
    expanding funding or programs?
        Mr. Dombeck. Yes; as a matter of fact, in the little over 3
    months I have been on the job I have spent a significant amount
    of time learning about the State and private program, because
    some 70 percent of our forests are in private ownership.
        I have had dialog with the State foresters. In fact, the
    president of the National Association of State Foresters is in
    essence a voting member of the management team of the Forest
    Service.
        From the standpoint of the State foresters, some of the
    monitoring technologies, the wide variety of stewardship
    programs, the Forest Legacy Programs, and so on, are programs
    that in spite of some of the unpopular things we have talked
    about this morning, that are very much in demand, very popular,
    and very important. These are programs that we need to bolster.
        Senator Leahy. The 1998 request reduces, among other
    things, the economic action programs. What happens to rural
    development through the forestry initiative under this? Does it
    disappear or do we get smacked up along side of the head and
    shoulders?
        Mr. Dombeck. Let me ask----
        Senator Leahy. That is a technical term.
        Mr. Dombeck. Yes; let me ask our Deputy Chief for State and
    Private Forestry to talk about some of those details.
        Ms. Comanor. Senator Leahy, you have long been a supporter
    of State and private forestry programs, and I and my staff
    appreciate that very much.
        As we looked at the options we had within a constrained
    budget, we were successful in maintaining the overall funding
    for State and private comparable to the 1997 appropriation.
        What we did is look hard at legacy and have proposed an
    increase in the Forest Legacy Program. It is a successful tool
    to use to deal with many of the issues in your part of the
    country and most recently in Senator Gorton's home State.
        We also looked at increasing, once again, the President's
    proposal for stewardships incentives funding to cost share with
    private landowners so they can make investments in their lands
    so we will have well managed forests into the future.
        So within those choices and the other commitments we had in
    the Northwest, the Economic Assistance Program took a little
    downturn, as you are observing. We would have a comparable
    spread within the Rural Assistance Program for those programs
    that we have been conducting proportionate to the available
    funds that we received.
        Senator Leahy. Does that mean they go up?
        Ms. Comanor. It depends on what the appropriation brings
    us. But we would continue a comparable spread among the
    different elements within the Rural Assistance Program
    proportion to what they have been, at whatever level of funding
    we receive.
        Senator Leahy. We will work with you on that as we go
    through the appropriation process. And I will be quite
    interested in it.
        Mr. Chairman, I will submit my other questions, if I might,
    for the record.

                              salvage sale program

        Senator Gorton. Fine. Thank you, Senator Leahy.
        I appreciate the patience of all of you here to all of the
    questions you have been asked and to my own unavoidable
    absence. A number of the questions that I would have dealt with
    have been submitted to you already by other members of the
    subcommittee, but I do have a number of additional ones.
        I would like to start by discussing the Timber Salvage
    Program. An important aspect of your Forest Health Program
    appears to be a proposal to split the timber salvage fund into
    two parts with the new fund being called the forest ecosystem
    restoration and maintenance fund. Am I correct in that
    assumption?
        Mr. Lyons. That is correct.
        Senator Gorton. Will the sale of timber be an important
    aspect of this new fund?
        Mr. Lyons. The fund is dedicated primarily, or is proposed
    to be dedicated--obviously we would need statutory authority--
    to those other ecosystem restoration and maintenance activities
    that would help to support both improve forest health and
    timber supply, thinning, salvage, road obliteration,
    revegetation, et cetera.
        So the primary focus of forest ecosystem restoration and
    maintenance fund [FERM] would not be commercial timber
    production, but rather those other factors that frankly
    represent investments.
        Senator Gorton. So any timber sales would be incidental
    with respect to this fund.
        Mr. Lyons. I would say that, sir.
        Senator Gorton. OK. Under the present timber salvage fund,
    the timber offering target for fiscal year 1998 is 1.3 billion
    board feet. How would that number be stratified or divided
    between the two funds if this proposal were in existence today?
        Mr. Lyons. I am hesitating only because I think Mr.
    Satterfield knows how the actual breakdown would occur. But in
    essence, our program would remain essentially timber produced
    from the salvage program, as well as the component that is the
    green program. That would be where our commercial timber
    program would come from.
        And Mr. Satterfield just informed me that the split is
    volume neutral.
        Senator Gorton. So the overall target would remain 1.3
    billion board feet.
        Mr. Lyons. Yes, sir.
        Senator Gorton. Now let me specifically discuss the timber
    salvage rider as a part of the Rescission Act. On December 13
    of last year, Mr. Lyons, the agency issued direction to
    withhold all further advertisements of sales under the
    Rescissions Act.
        You stated at the time of that direction that the 4.1
    billion board feet sold as of November 30, and I quote,
    ``represents 91 percent of the original commitment, well within
    the 25-percent range included in the correspondence between the
    administration and Congress.''
        It is clear that the agency committed to offering salvage
    volume in accordance with the Rescissions Act, but could well
    have exceeded the figure of 4.5 billion board feet in the
    amount of 25 percent. As a consequence, the statement is
    somewhat bothersome.
        Should this lead this subcommittee to assume in the future
    that any time we fund a program, a 91-percent accomplishment
    level is acceptable?
        Mr. Lyons. No, sir; you should expect 110-percent effort.
    And let me explain the rationale for the policy decision and
    direction that I provided.
        First of all, we knew that our bookkeeping was not quite up
    to date at that point in December. Our accomplishment reports
    indicated that we were doing better than was reflected by the
    numbers we had at that point in time.
        Our final report to the Congress from the salvage program
    indicated that we achieved 4.6 billion board feet of salvage
    volume under the salvage rider, in contrast to the 4.5 billion
    board foot target. So it was not 110 percent, but it was in
    excess of 100 percent.
        But we faced a difficulty which was the result of
    transitioning the program, the salvage program, back to the
    regular order of business on January 1. We had a number of
    sales in the pipeline that had been prepared under the salvage
    rider and then a number of other sales that we faced at the end
    of the year. And the questions coming back from the field were:
    How do we prepare to offer new sales on January 1?
        So we made a decision basically to finish everything that
    had already been prepared and was about to be offered, have it
    offered under the salvage program, but not at that point begin
    new offers.
        There was a third element to this, and I want to be clear
    about it. There was a great deal of concern, as you are well
    aware, among the public and others about the program. And we
    worked our way through this over time.
        But there was a perception. I do not think it was reality,
    but I think there was a perception that there was a rush to get
    sales out the door at the last minute under the salvage rider
    so as to dissuade the public of any perception that there was,
    as it was characterized by some critics, a Christmas sale
    underway to rush these things out the door.
        We said let us terminate things here, let us provide for an
    orderly transition, and let us get things done. I think by our
    estimates the impact in terms of volume, the additional volume
    that could have been offered in that period from December 13,
    or whatever it was, to the end of the year, was not
    significant. I think it was on the order of maybe 100 million
    feet would have been affected.
        And those sales are going to be offered under the regular
    program, or have been already.
        Senator Gorton. Now that you are looking back on most of
    that, have the sales of the other activities under the salvage
    amendment reduced fuel loads and reduced your expected
    suppression costs?
        Mr. Lyons. We have a great deal more work to do, Mr.
    Chairman. Chief Dombeck spoke to what our needs are as opposed
    to the resources we have to deal with them.
        So I would say in those places where we were able to
    implement sales in a strategic way, certainly it helped. But
    there is a still great deal more work to be done.
        Senator Gorton. Oh, I am certain that that is true. So
    future salvage sales will be directed, at least in part, to
    those same ends.
        Mr. Lyons. Yes, sir.

                            columbia basin ecosystem

        Senator Gorton. Now I would like to ask some questions that
    I hope do not duplicate what Senator Craig did with respect to
    the BLM East Side Columbia Basin Ecosystem Management Project.
        In this project you cooperated, obviously, with BLM to
    combine up to 74 land and resource management plans for 45
    units. I gather your draft environmental impact statement are
    scheduled for imminent release sometime this spring?
        Fish and Wildlife and National Marine Fisheries Service are
    also a part of it, but those two agencies have specific
    missions that do not reflect any target such as timber
    production.
        Mr. Dombeck, this question is for you. Have the differing
    missions of the Fish and Wildlife Service and the National
    Marine Fisheries Service affected the planning effort,
    specifically the commodity targets which the Forest Service and
    BLM, to the extent that you know about BLM, may produce?
        Mr. Dombeck. From the standpoint of the specific effects in
    numbers, I cannot give you that specific information here and
    now. But what I will say is that I think the important thing is
    we are working this up front.
        In the past, we have run into a gridlock in litigation and
    things like that. Hopefully that is behind us with the agencies
    working in parallel, and together on these issues up front.
        I have to say, and I am sure Jim will want to comment on
    this as well, some of the things we have learned, through
    better coordination and working up front, is from the
    consultation backlog in the Pacific Northwest where we had as
    many as 100 or more.
        Ms. McDougle. We had 1,700.
        Mr. Dombeck. A backlog of 1,700. That backlog has been
    eliminated. We are doing everything we can to push the agencies
    to work together in a more cost-effective manner. Our hope is
    that is what is being accomplished here.
        Senator Gorton. Probably you anticipate my next question,
    which is for one or both of you to put on the record what this
    project has to show for the $35 million of taxpayer money that
    has been spent on it and an estimate, if you can, of how much
    more will be spent before it is completed.
        Mr. Lyons. We will certainly have to provide you that for
    the record, Mr. Chairman. Let me, if I could, give a followup
    comment to what Chief Dombeck said.
        There was obviously a lot of criticism and concern about
    the salvage program and the salvage rider in particular. But
    one of the things we learned through that was, and I think one
    of our successes in achieving the goals that we set, was the
    coordination and collaboration among the land management
    agencies, Fish and Wildlife, NMFS, and EPA.
        We brought them altogether on the ground in what we call
    level one teams. And in fact the interagency report that
    evaluated the program highlighted that as the most effective
    and more efficient way of doing business so as to avoid
    backlogs and consultations, et cetera.
        What I hope the Columbia River Basin Program will do, we
    cannot measure just today. We are not done with that effort.
        What we hope it will do is provide greater certainty for
    the region as a whole in terms of an understanding of the goods
    and services that will be produced by the Forest Service and
    BLM management units there, as well as provide us greater
    scientific certainty so that when there are questions or
    challenges to particular management actions, we are able to
    fend off those challenges because we have a sounder foundation
    from which to work.
        Finally, our ultimate goal is to make sure the communities
    in that area have a clear understanding of what the future
    holds because they have been part of the process. They can in
    fact then determine where they want to make investments as
    communities as they grow and develop and deal with the economic
    challenges they face.
        [The information follows:]

              Interior Columbia Basin Ecosystem Management Project

        In fiscal years 1994 through 1997 (estimated) the Forest
    Service and the Bureau of Land Management will have spent a
    total of about $35 million on work associated with the Interior
    Columbia Basin Ecosystem Management Project (ICBEMP). In fiscal
    year 1998 about $5 million is needed to complete the Final
    Environmental Impact Statements (EIS) and Record(s) of Decision
    (ROD). Neither the FS nor the BLM included funds to begin
    ICBEMP implementation in the fiscal year 1998 President's
    Budget. Fiscal year 1999 would be the first year funds might be
    requested for implementation, but final decisions are not
    anticipated until the Summer (third fiscal year quarter) of
    fiscal year 1998, following public review of the Draft EIS's.
        Several benefits are associated with the ICBEMP. The Forest
    Service expects that decisions from the Project will streamline
    the Land and Resources Management Plan revision process for the
    affected National Forests. Broad scale social issues are being
    addressed in a consistent manner. Other broad scale issues such
    as forest health, range health, and fish and wildlife
    protection, transcend administrative boundaries and will be a
    primary focus of the decisions (based on the EIS's).
        Further benefits include: more effective analysis of
    cumulative effects of land management activities than when
    attempted unit-by-unit, reduced vulnerability to legal
    challenges because of increased consistency across the region
    of plans and management, and, more favorable regulatory agency
    consultations. If each administrative unit acted independently
    in addressing anadromous fish, for example, the FWS and NMFS
    might assume worst case conditions in adjacent areas because of
    a lack of overriding context or coordination of individual
    agency plans.
        In terms of ``products'', the ICBEMP has released a
    ``Framework for Ecosystem Management'', ``Scientific Assessment
    for Ecosystem Management (on BLM/NFS lands) in the Interior
    Columbia River Basin'', ``Draft Eastside Environmental Impact
    Statement'', ``Draft Upper Columbia River Basin EIS'', and
    ``Scientific Evaluation of Alternatives''.

                                law enforcement

        Senator Gorton. Another subject--and this, Mr. Lyons, is
    for you--last year in August, demonstrators were finally
    cleared from a timber protest area in the Willamette National
    Forest.
        I was informed that when law enforcement officers initiated
    action a month earlier to remove the demonstrators, the
    Secretary's office intervened and delayed the action.
        Why? And why was so much damage to Forest Service land
    allowed to take place without law enforcement action occurring?
        Mr. Lyons. Mr. Chairman, I cannot speak to the extent of
    damage that occurred. I think it was rather restricted. There
    was concern on the part of the Secretary's office as to
    ensuring the health and safety of Forest Service employees, as
    well as to ensure that the protesters were handled in an
    appropriate manner.
        I think some time was spent trying to ensure that law
    enforcement, local law enforcement, and State officials were in
    agreement about how to proceed with those actions. Ultimately
    those protesters were removed from the site. And in fact this
    year, anticipating protests on the Willamette and other places,
    I have had some conversations with Forest Supervisor Kenops
    about that potential.
        We intend to sit down early with the FBI and with State
    officials to make sure we are prepared in advance to handle
    this.
        Senator Gorton. You certainly did anticipate my followup on
    that. Do you think you will be able to deal better with any
    demonstrations of that sort this year as a result of your
    experience last year?
        Mr. Lyons. I believe so. There is renewed confidence within
    the administration and certainly with the Forest Service's
    handling of the situations last year that the incident command
    teams can move forward and deal with this aggressively.
        Senator Gorton. Good. I am very pleased to hear that. I
    hope it works out on the ground.
        Mr. Lyons. We hope so, too.

                              timber sale targets

        Senator Gorton. Your current timber sale target for the
    country is just under 4.2 billion board feet. Mr. Dombeck, will
    you reach that goal? And specifically in a parochial fashion,
    will you reach the 1 billion board foot goal from the Pacific
    Northwest?
        Mr. Dombeck. Yes.
        Senator Gorton. That is a wonderful answer. You do not need
    to add to it.
        During the fiscal year 1997 hearings, Mr. Lyons and then
    Chief Thomas stated that there were insufficient resources to
    accomplish a complete substitution of volume for the section
    318 sales and to meet the requirements of the President's
    Northwest plan.
        The committee understands that additional resources were to
    be provided to the agency's Pacific Northwest region to bring
    timber sales forward in the pipeline to accomplish both the
    substitution and the requirements of the President's plan. Have
    those resources been so allocated?
        Mr. Lyons. Yes, sir; they have. All parties to the
    settlement agreement are pleased with where things stand and
    the progress that is being made.
        Senator Gorton. So in fiscal year 1998 you are confident
    that we will be able to meet those goals.
        Mr. Lyons. Yes, sir.
        Senator Gorton. OK. The administration entered into a
    settlement agreement with a number of the purchasers to buy out
    their old timber sales contracts. Can you tell me what the
    total cost of these agreements is and how you are going pay for
    them?
        Mr. Dombeck. Let me ask Steve to correct me if I am wrong,
    but as I recall, what we know now is about $21 million. And I
    might ask Steve to elaborate on where he is going to find the
    money since he is the keeper of the books.
        Senator Gorton. Yes; we are quite interested in that.
        Mr. Satterfield. I am kind of interested in where I am
    going to find the money, too. Well, there are two pieces. Of
    course there is the Ketchican one where the Department of
    Agriculture general counsel has written a letter to the
    Treasury making the argument that we should not be required to
    reimburse the judgment fund. So that would be up to Treasury to
    get reimbursed, if that was the case.
        The remainder, the $20 million, we have not resolved yet.
    We obviously do not have any direct appropriations for that. In
    the end, if we have to reimburse the judgment fund from where
    those claims are being paid initially, then we will just have
    to take it out of every other National Forest System program.
        Senator Gorton. Jim, in this connection, that is a very
    good answer. That is a fair amount of money, and you do not
    have it just in pocket change.
        We are only talking about 7,000 acres of sales in Oregon
    and Washington combined. It was your view that the sales would
    have jeopardized the balance in the President's Northwest
    forest plan.
        Can you explain in lay terms why 7,000 acres, either these
    or exchanged acres, out of 24 million acres out there could
    really have been significant and required that being bought
    out, rather than exchanged for an equivalent harvest elsewhere?
        Mr. Lyons. Well, let me say at the outset, Mr. Chairman,
    that our preference is to find alternative volume. And we have
    had some circumstances where we have been able to succeed in
    doing that, as you know.
        Senator Gorton. Yes; I do understand that.
        Mr. Lyons. As to why 7,000 acres should be so significant,
    it is not a judgment I can render except to say that we asked
    both the regional ecosystem office, as well as the keepers of
    the plan, who are the regional executives, to look at these
    issues.
        Certainly where there are endangered species impacts, that
    is a concern. Where there could be impacts on aquatic
    resources, which has been the case with some of these sales,
    that has been a concern.
        Our overall concern is the cumulative effect of these
    sales, maybe 7,000 acres today, maybe adding up to more
    tomorrow, could have a detrimental effect on the plan overall.
    The plan strikes a careful balance, although you and I have had
    many discussions about whether or not that is an appropriate
    balance.
        We are doing our best to ensure that we stick with the
    concepts and the proposals incorporated in that plan. And I
    think at least a benefit to this point in time is our ability
    to fend off legal challenge and proceed to harvest timber in
    the matrix as proposed, to begin work in the adaptive
    management areas and to expand our opportunities there, and
    also to make the watershed improvements and in fact develop
    operations in the late successional reserves in accordance with
    the prescriptions and guidelines included in the plan.
        Senator Gorton. And it is worth $20 million even if you
    have to scramble for it out of other appropriations?
        Mr. Lyons. Well, Mr. Chairman, I understand your point.
    Here is my concern, though. If in fact harvesting those units
    cause some harm to the plan or ran the risk of the plan being
    challenged, I dare say the cost to the region would be far in
    excess of $20 million. And that is the judgment we have to
    make.

                            western director office

        Senator Gorton. Now, Jim, I have another subject. It is a
    small one, but it has gone on and on and on. In the fiscal year
    1996 appropriations bill, the Department was directed to
    eliminate the Office of Forestry and Economic Development in
    Portland. This was done in response by the administration by
    renaming it the Office of Forestry and Economic Assistance.
        In the current appropriations bill, the Department was
    directed to eliminate this office, and we withheld funding for
    any successor office. Leon Panetta agreed to this on behalf of
    the President.
        Now we are informed that the Secretary has directed the
    establishment of an office to house the Western Director for
    the Office of the Secretary. Lo and behold, we have the same
    person in all three of these offices, who remains in Portland.
        Some 50 percent of the office's funding is to come from the
    Forest Service subject to a reprogramming request that I
    understand will soon be submitted. How can you explain this as
    anything other than a direct defiance of the expressed will of
    Congress?
        Obviously it is a successor office. What do we have to do
    if we do not want that office to be there?
        Mr. Lyons. Mr. Chairman, the Secretary created this Western
    Director position because of the high number of controversial
    issues affecting the Department and the Forest Service in the
    Pacific Northwest.
        Tom Tuckman, who you were referring to, has served in
    various capacities out there, is a very able and talented
    individual. And I know you know him personally.
        His responsibilities have changed over time. For example,
    Tom right now is involved in the headwaters exchange and is
    involved in working on the Tahoe basin event, which Senator
    Reid alluded to earlier in the day. He is also involved in
    ensuring that we meet our goals and commitments in accordance
    with the President's forest plan but reports directly to the
    chief of staff for the Secretary.
        I believe the Secretary's intent is to make sure that we
    can be as responsive as possible to the needs of the Congress
    and in particular the members of the Pacific Northwest and
    feels that it is important to have that presence there so as to
    ensure that we are fulfilling the direction that we receive.
        Senator Gorton. From my perspective, Jim, this is much less
    about an individual than it is about whether or not the
    instructions of Congress are going to be followed. You are
    sitting there without a smile on your face telling me that this
    is not a successor office and not just a way around what
    Congress for 2 straight years has ordered you to do?
        Mr. Lyons. I am trying to give you the best answer I can,
    Senator.
        Senator Gorton. If it is really so important to the
    Secretary, why does he not pay for it through the agricultural
    appropriation?
        Mr. Lyons. I cannot answer that question, sir.
        Senator Gorton. Well, do not be surprised to see another
    order with respect to that office.

                                 flood funding

        Mr. Dombeck, as you know, the administration has proposed
    that $38 million be appropriated to the Forest Service for
    construction and restoration projects in the supplemental due
    to recent severe flooding in the Pacific Northwest and Midwest.
        You asked for more than twice that amount, as I remember.
    What is that impact going to be? How are you going to set
    priorities? What very important things are going to end up
    undone?
        Mr. Dombeck. Well, first of all, I believe the House mark
    on that was $69 million?
        I believe the assessment that we made was about $80
    million. And from the standpoint of what things are not going
    to be done----
        Senator Gorton. Well, if you get that $69 million, are you
    going to be able to do essentially everything you need to do?
        Mr. Dombeck. Well, what we will do is take a look at the
    entire package of things that need to be done. I am told that
    we still may not have a complete assessment because of access
    and snow and that sort of thing. But we will start with the
    highest priorities first, you know, the areas most in need of
    repair and work our way.
        Senator Gorton. Have you given us a priority list so that
    we can understand on our part over here what gets cut off at
    any given level of appropriation?
        Mr. Dombeck. Let me ask Steve if a specific project list
    has been submitted. Not to my knowledge.
        Mr. Satterfield. The problem we have, Senator, is that
    these are very approximate estimates on part of the field. They
    cannot get into a lot of the areas. Region 1 in particular is
    under snow.
        So based on general experience with these kinds of things
    and what they can observe, they have made estimates. They have
    not had a chance to really sort out if they get $69 million,
    just which individual projects will not be done. But as the
    Chief said, they will work that through as carefully as they
    can.
        Mr. Dombeck. Janice apparently----
        Senator Gorton. So you are guesstimating and we are
    guesstimating, to use Senator Craig's word?
        Mr. Satterfield. In this situation, yes. I think Janice
    might have some more information.
        Senator Gorton. Good.
        Ms. McDougle. One of the things that we are working on
    right now, Mr. Chairman, is a partnership with our sister
    agency, NRCS, to look at opportunities to jointly review
    projects associated with flooding impacts.
        What we have discovered is that the Forest Service has
    authorities to do things on National Forest System lands. The
    NRCS has authorities to do improvements and restoration efforts
    on private lands downstream.
        And what we hope is that collectively we will come up with
    priorities for work that make sense for us to do together so
    that one does not cancel out the others.
        We are working on that right now. And it is an opportunity
    to leverage dollars as well.
        Senator Gorton. Thank you. Thank you very much.
        Any help you can give us between now and the time that the
    supplemental comes up on this will both add to our knowledge
    and I think to our ability to help you. We recognize that these
    losses did take place, and we want to allow you to get to work
    on them as soon as possible.
        Mr. Lyons. Thank you.

                           issues in washington state

        Senator Gorton. I have a few parochial questions with
    respect to the State of Washington now, if I may submit them to
    you. I understand that region 6 has asked for $500,000 from
    headquarters accounts to process the land exchange with Plum
    Creek in the Wenatchee National Forest. Funding for this
    project will be used for technical and environmental work that
    must be completed during the course of this fiscal year.
        What is the status of that request?
        Mr. Lyons. I will ask Steve to give us the exact numbers.
    What I understand, as I checked into that before I visited you
    on Monday, is that this is a priority, and is something that we
    are proceeding with as best we can with the resources we have.
        What is the exact disposition of that money, Steve?
        Mr. Satterfield. I think that is to be determined, too.
    What we have is a lot of requests from around the country with
    considerable urgency. And what we are trying to do right now is
    to balance those. What we would propose and what we would have
    to offset. And in some of these cases, I am not sure, I think
    this one--many of them will require reprogramming.
        So we are in the process of working that through right now.
        Mr. Lyons. Let me assure you, though, Mr. Chairman, that
    this remains a priority for the administration and a tremendous
    opportunity, I think.
        Senator Gorton. It is a high priority for me. The idea of
    the kind of blocking up that you are doing there is, I think,
    progressive, something that is entirely win-win. And I do want
    to advise on you the interest this chairman has in that
    subject.
        One more; 15 years ago, the Congress authorized the Mount
    Saint Helens National Volcanic Monument. The exchange of
    surface and minerals with private landowners was to be
    completed within 1 year after the act was signed into law.
    Approximately 10,000 acres of private mineral rights, however,
    remains stranded in the monument area.
        I understand that the companies involved, Weyerhaeuser and
    Burlington Resources, are working with the Forest Service and
    the BLM to resolve the situation. I am really planning to
    introduce legislation to address the issue and wonder if you
    could give me a progress report.
        What is going on? What kind of additional authority might
    you need? When are we going to get it done?
        Mr. Lyons. I do not see any heads nodding here of people
    that are real familiar with the issue. I know that I am not.
    But what we will do is we will provide a detailed answer to
    that for the record.
        [The information follows:]

                       Mount Saint Helens Mineral Rights

        The proposal: Approximately 10,750 acres of mineral estate
    within the Mount Saint Helens National Volcanic Monument remain
    in Burlington Resources and Weyerhaeuser ownership. The
    proposal by the companies is to pursue legislation with the
    idea to make it simple, to incorporate full consultation from
    all parties, minimize surface administration and costs, provide
    solutions for acquisition, and establish time frames for
    completion. The new legislation would amend the existing Act by
    directing the Secretary of the Interior to complete the
    exchange by using ``bidding scrip'' in lieu of Federal land or
    minerals.
        The ``bidding scrip'' concept would grant a dollar for
    dollar basis to compensate the company for valuation of their
    mineral estate in the Monument. It could be used as credits
    towards bidding rights, royalties, and/or bonus payments.
    Credits would be administered by USDI and subject to existing
    laws and regulations.
        What is the current status of negotiations between the
    Companies and Agencies?
        On April 22, Burlington Resources, Weyerhaeuser, Forest
    Service and Bureau of Land Management met to review the
    proposal and to discuss areas of agreement and areas of
    concern. The concept of using ``bidding scrip'' as compensation
    appears to be a viable alternative to complete the
    congressionally mandated exchange. The primary concern of the
    BLM and FS is reaching agreement on the value of the severed
    mineral estate (particularly the geothermal resource).
    Burlington and Weyerhaeuser agreed to do a thorough search for
    additional valuation data and geothermal sales. All parties are
    currently collecting and reviewing the additional valuation
    data. The valuation negotiations will continue on May 28.

                               national monument

        Senator Gorton. All right. Again, after 15 years and my own
    interest as the primary sponsor of creating that national
    monument in the first place and trying to work out these
    private and public interests, I would be very gratified to see
    the work completed.
        And the more we feel there is real cooperation between the
    Forest Service and the Congress, the better we are going to be
    able to help you.
        That is why things like the Tuckman office come up, Jim. I
    will just be very blunt with you. I do not know how it could be
    worth it to you to keep that aggravation going with the
    Congress that has made the kind of decisions on it that it has.
        You know, there are obviously going to be some major policy
    differences, and we understand those differences. But we should
    have as close and cooperative a working arrangement with one
    another as it is possible to create.
        I do want to give you one last expression of concern. On
    December 11 of last year, Senator Byrd and I, Chairman Regula
    and Mr. Yates wrote to the secretary. While I will not go into
    the detail about the actions that prompted that letter, I want
    to let you know that I remain concerned about the relationship,
    as I have just said, between the subcommittee and the
    Department.
        We really have got to be able to count on the Department to
    adhere to well-established practices and procedures, the most
    important of which are reprogramming guidelines. The only
    alternative we have is to write a lot of the things that we do
    less formally into the law as we create an appropriation.
        I do not want to do that. That is frustrating, and it is
    not particularly flexible. If we can get the kind of
    cooperation I have been talking about, which is obviously the
    intent of Congress, it is a much, much better way in which to
    work.
        I do want to say thank you to both of you and to your
    associates, some of whom are to be congratulated on new
    positions. Dave, I also will join in thanks for your many years
    of service. And I am quite sure you are not just going to go to
    seed. You are going to find something else to do that will be
    interesting and will use the knowledge that you have gained.
        Mr. Unger. I trust that will be the case, Senator.
        Senator Gorton. And I wish for you great success in that as
    well. Your responses here today have been thoughtful and
    reasonably complete. Let us keep going on that, and let us get
    rid of some of these differences and exacerbations that really
    do not need to exist and that end up frustrating both sides of
    this table.
        Mr. Dombeck. Senator, if I might, I would just like to
    respond and say that in my 3\1/2\ months in this job that you
    have articulated the spirit in which I want to work.
        And that I realize the issues of national forest management
    and resource management in general for all agencies in a
    changing society can be very tenacious. But yet there are many,
    many positive areas that I hope that we can focus on together
    to move forward and build relationships. As we do that, I
    believe that some of the more tenacious issues will become
    easier to deal with.
        I look forward to a long positive working relationship with
    you and your staff as all of the members of the committee.
        Senator Gorton. Very good. Jim, I will see you on the
    trail.
        Mr. Lyons. I look forward to that, Senator. And I just want
    to second what Mike said and indicate that I have appreciated
    your help in working through some very difficult issues.
        We have had our differences over time, but I have always
    appreciated your open door and the opportunity to sit down and
    discuss differences of philosophy and work together most
    importantly to protect the resources of the United States,
    which I know you care dearly for as well.

                         Additional committee questions

        Senator Gorton. Thank you very much. I have a large number
    of other questions of significance, but perhaps it is not the
    best use of the time of all of the people in this room to go
    through them orally here. We will submit them to you, together
    with Senator Leahy's questions and those of any other members
    who have questions in writing.
        I would urge you to answer them as promptly and completely
    as you can. I simply have to return to my earlier remarks. Like
    the last few years, this is likely to be a tough year.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                         Additional Committee Questions
                           state and private forestry
    Suppression of insects and diseases
        Suppression of insects and diseases on Federal and tribal lands is
    an important part of Forest Health management.
        Question. Are there significant insect and disease suppression
    efforts which may not occur under the President's budget? If so, please
    explain?
        Answer. Specific pest outbreaks are difficult to forecast this far
    in advance. Pest like southern pine beetle and gypsy moth can increase
    suddenly with little warning. If increases occur in several pests
    simultaneously, it is conceivable that significant insect and disease
    suppression efforts may not occur under the President's budget.
        Question. Is the suppression program being affected adversely by
    the appeals process in a manner similar to the effect on the timber
    program? Are cooperative efforts with states hampered by the appeals
    process?
        Answer. The insect and disease suppression program on Federal,
    state or private lands is not being hampered by the appeals process.
        Question. The Department of the Interior has raised significant
    concern regarding the spread of the Brown Tree Snake across the South
    Pacific and potentially into the Pacific Southwest states. In terms of
    non-indigenous pests and diseases, is forest health potentially
    affected by such ``Brown Tree Snakes?''
        Answer. The brown tree snake is mildly poisonous to humans, grows
    up to 8 feet in length, and would adversely affect recreational uses of
    forests and parks. Its primary negative effect would be on bird
    populations and biodiversity; nine native bird species have gone
    extinct on Guam following the snake's introduction. The loss of native
    biodiversity is a forest health concern.
                           forest stewardship program
        The President's budget proposes a level Forest Stewardship Program
    and increase in the Stewardship Incentive Program of $5.7 million which
    doubles it size.
        Question. To what degree has the Forest Stewardship Program
    enhanced the long term sustainability of timber production from private
    lands.
        Answer. The Forest Stewardship Program has enhanced the long term
    sustainability of timber production in the following ways:
        The owners of nonindustrial private forest lands that are enrolled
    in the program and have an approved forest stewardship plan agree to
    implement approved activities for a period of not less than 10 years.
        The Stewardship budget line item provides $2,805,000 for seedlings,
    nursery, and tree improvement. Without the low costs of genetically
    improved forest planting stock, many stewardship owners would not be
    encouraged to plant trees.
        Because, forester assisted timber sales provide double the income
    from unassisted sales twice the number of trees are left in the stand.
    This improves the long term sustainability of timber production and
    significantly enhances wildlife habitat. The Forest Stewardship Program
    through its collaborative stewardship approach contributed over $6
    million dollars to the income of consultant foresters through the
    landowners and has encouraged the start up of many new consulting
    businesses which tend to increase professional non-government technical
    assistance available to nonindustrial private forest land owners.
        The Forest Stewardship program, not only enhances the long-term
    productivity of timber, but encourages the long-term stewardship of
    nonindustrial private forest lands by assisting owners of such lands to
    more actively manage and enhance fish and wildlife habitat, water
    quality, wetlands, recreational resources, and the aesthetic value of
    forest lands.
        Question. Approximately 50 percent of all sawlog volume exists on
    the National Forests. With the timber program declining, what specific
    actions will enable increased production from nonindustrial private
    lands?
        Answer. In recent decades technical assistance and financial
    incentives (cost sharing) provided by Federal Government forestry
    programs, such as the Forestry Incentive Program (FIP), the
    Environmental Quality Incentives Program (EQUIP); formerly the
    Agricultural Conservation Program (ACP), and the Stewardship Incentive
    Program (SIP) have accounted for between one-third and one-half of all
    tree planting on nonindustrial private forest lands.
        Through State and Private Forestry programs professional assistance
    is made available to nonindustrial private forestland owners to
    implement Best (forestry) Management Practices to help landowners
    achieve their resource management objectives while maintaining or
    improving the quality of the Nation's environment and supply forest
    products.
        We are increasingly focusing on working with private landowners to
    develop Forest Stewardship Plans.
        The President's budget maintains, at the fiscal year 1997 level,
    funding for technical and financial assistance to nonindustrial private
    forest landowners to develop long-term Forest Stewardship Plans to
    guide the management of their forests and related resources. The
    President's budget significantly increases the level of financial
    assistance available to nonindustrial private forest landowners to
    implement multi-resource forest management practices, including
    reforestation and forest improvement practices.
        Questions. (a) What was the state by state breakdown of funds
    provided under the Stewardship Incentive Program for fiscal year 1995-
    97? (b) What is the planned aggregation of fiscal year 1998 funds? (c)
    Based on projections, what are the long term effects on future timber
    production from this program which are attributable to the increase in
    requested funding? [d] How many additional landowners will benefit from
    the proposed increased funding level?
        Answers. (a) Refer to attached data tables that show the fiscal
    year 1995-97 breakdown. (b) The planned allocation of fiscal year 1998
    funds will include: (1) a base funding level based on the number of
    States in each Forest Service Region and the Northeastern Area, and (2)
    a distribution based on the number of nonindustrial private forest land
    owners and acres in each state. (c) The Stewardship Incentive Program
    (SIP) has nine approved practices of which several are very critical
    for future timber production. The first practice (SIP-1) is Management
    Plan Development which provides cost share incentive to landowners to
    develop a management plan for their forest land. This is important
    because it educates landowners about the need to harvest timber along
    with the management of other resources on their land. Over one-third of
    Stewardship landowners have stated that if it had not been for the
    broad based appeal of the overall Forest Stewardship Program, they
    would not have harvested timber. The second practice (SIP-2)
    Reforestation and Afforestation and the third practice (SIP-3) Forest
    and Agroforest Improvement are both critical to future timber
    production and directly result in increased timber volume. The tree
    planting practice will help insure a continuous supply of forest
    products and the forest improvement practice will help insure forest
    stands are growing quality timber and fully utilizing the site.
        The proposed SIP budget will allow the Forest Service to fulfill
    part of the larger demand for cost-sharing assistance to implement
    multi-resource practices on nonindustrial private forest (NIPF) lands.
    Multi-resource practices will be implemented on over 277,850 acres of
    NIPF lands, including 26,700 acres of tree planting and 26,865 acres of
    timber stand improvement practices. Sixty percent of the funding will
    go for tree planting and forest stand improvement which contribute to
    long term timber productivity on NIPF lands. [d] Approximately 3,900
    additional landowners will benefit from the increased funding level.
        Question. The Administration is placing significant emphasis on
    Forest Health. How will this emphasis translate to program emphasis in
    fiscal year 1998 versus emphasis 5 years ago? In otherwords, specific
    programs and funding levels existed 5 years ago as compared to the
    fiscal year 1998 budget proposal, for those significant Forest Health
    programs?
        Answer. In the past, pest prevention and suppression activities
    have been the primary focus of our Forest Health Management program.
    Today, we have a broader focus for forest health programs. In fiscal
    year 1998, we will continue to emphasize our surveys and technical
    assistances, including the Forest Health Monitoring program. A high
    priority will be to have better information on forest health problems
    and influence implementation of resource management decisions that will
    restore the health of the nation's forests, emphasize prevention and
    reduce suppression needs in the long run. Our past success in
    eliminating frequent low-intensity wildfires has led to conditions of
    dense accumulation of underbrush and over-crowded stands. These
    conditions render forests highly susceptible to large damaging fires,
    insects, and diseases. We intend to substantially increase fuels
    management and thinning in these areas.
        Question. The American Forest and Paper Association states that 59
    percent of timberland is in private ownership (not including timber
    industry ownership). What statistics are available to identify how the
    Stewardship Incentive program improved productivity from these lands?
        Answer. Timber harvesting without adequate consideration for
    regeneration is the single greatest threat to productivity on
    nonindustrial private forest (NIPF) ownerships. The Stewardship
    Incentive program increases the participation of nonindustrial private
    forestry land owners in reforestation, afforestation, and preharvest
    planning. It helps them do forest stand improvement activities, which
    includes: thinning; weed control; the use of prescribed fire; hazardous
    fuel reduction; insect and disease protection; and stand regeneration.
        The landowners activity under SIP also helps protect watersheds,
    water quality, forest health, aesthetics, and helps meet short and
    long-term national demands for wood products in a sustainable manner.
                             forest legacy program
        The Forest Legacy Program is proposed for a $4 million increase,
    which is double the fiscal year 1997 amount.
        Question. How will passage of the 1996 Farm Bill directly affect
    this program? Will there be a significant amount of easements or
    purchases which will be vested in State or local governments? Is the
    requested increase solely attributable to passage of the 1996 Farm
    Bill, or are there other initiatives planned for this increase?
        Answer. The passage of the 1996 Farm Bill greatly increased the
    flexibility of the Forest Legacy Program and strengthened the
    partnerships that are essential to its effectiveness. Many States are
    using the 1996 Farm Bill authority to take over and complete
    acquisitions begun by the Forest Service. It appears that most future
    projects will be done under State acquisition authority with the
    assistance of a federal Forest Legacy grant. Prior to the 1996 Farm
    Bill passage there was demand for funding in excess of what was
    available, and this remains true today. There are no other initiatives
    planned for this increase in funding. The funds will be used to
    complete identified projects, most often using the State grant option
    available under the 1996 Farm Bill.
                         forest and rangeland research
        The agency's budget proposal for this program remains at the
    approximate funding level received in the past two years.
        Question. What significant research activities will be forgone as a
    result of this budget proposal?
        Answer. The Forest Service Research program is leveling out from
    the turmoil resulting from the fiscal year 1996 reduction. We have been
    able to maintain the highest priority research needs to address the
    Nation's natural resources.
        Question. How have the priorities for the research budget changed
    from that proposed in Fiscal 1997?
        Answer. The Forest Service remains committed to maintaining a
    strong research base capable of addressing the Nation's many competing
    priorities. Because most of our research is long-term, making
    significant changes in our priorities in 1 year is difficult.
        Question. Approximately 15 percent of Research funds are utilized
    for Grants and Agreements. How has this percentage changed over the
    past 5 years? What are the priority emphasis themes for projects being
    financed through grants?
        Answer. Our extramural research funding levels are determined by
    two major factors, the work needed to accomplish our mission in a given
    year and the level of funds available for that year. Over the past 5
    years our extramural research level has decreased.
        Even with an overall reduction in the extramural program, records
    from the Current Research Information System (CRIS) indicate that while
    less research is being conducted in field of biological science (54
    percent in fiscal year 1992 vs. 49 percent in fiscal year 1996) there
    is a corresponding increase in the field of environmental biology (27
    percent in fiscal year 1992 vs. 31 percent in fiscal year 1996) and a
    slight increase in sociology (1 percent in fiscal year 1992 vs. 3
    percent in fiscal year 1996).
        Question. The forest inventory program currently operates on a 10-
    12 cycle. What would the cost be to the program of conducting the
    inventory on a 5-year cycle? An 8-year cycle?
        Answer. The current Forest Inventory and Analysis (FIA) program is
    on a 12+ year national cycle with funding of $16 million dollars. The
    funding required to achieve a 5 year cycle is $38 million dollars. The
    funding required to achieve an 8 year cycle is $24 million dollars.
        Question. What has been the historic 5 year expenditure in each of
    the following programs: forest inventory; global climate change; and
    forest health monitoring.
        Answer. Figures for forest inventory (FIA), global climate change
    (GC), and forest health monitoring (FHM) are as follows:

                            [In millions of dollars]
    ------------------------------------------------------------------------
               Fiscal year                 FIA           GC          FHM
    ------------------------------------------------------------------------
    1993.............................         16.2         24.2          2.3
    1994.............................         16.3         24.2          2.6
    1995.............................         15.9         24.2          2.6
    1996.............................         16.4         17.5          1.6
    1997.............................         16.4         16.9          1.6
    ------------------------------------------------------------------------

        In addition, the Forest Health Monitoring (FHM) program receives
    support from other appropriations in the Forest Service as follows:

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                         Federal     Co-op
                        Fiscal year                       lands      lands
    ------------------------------------------------------------------------
    1993..............................................  .........        0.6
    1994..............................................        0.6         .7
    1995..............................................        1.0         .7
    1996..............................................         .5         .7
    1997..............................................        1.2        3.2
    ------------------------------------------------------------------------

        Question. The development of remote sensing and satellite
    technologies have the potential to transform the Forest Inventory and
    Analysis data collection process. What plans are underway for the
    Forest Service to work collaboratively with the Department of Energy,
    National Aeronautic and Space Administration (NASA), and the National
    Oceanic and Atmospheric Administration (NOAA) in deploying and
    utilizing their technological advancement and applied research to
    forest inventory?
        Answer. FIA is currently pursuing many promising possibilities in
    the area of remote sensing. The Department of Agriculture is purchasing
    30 meter Thematic Mapper (TM) data sets for the 1970's, 80's, and 90's.
    This data can be used in the first phase of our inventories to estimate
    forest area. In several States we are working with the Fish and
    Wildlife Service GAP program. The GAP program is a program of the
    National Biological Survey to identify where gaps in habitat type
    exist. In Alaska, we are working with Earth Resources Observation
    Systems (EROS) data center to investigate opportunities for more
    efficient inventories. We are also reviewing techniques used in the
    NOAA Coast Watch program to evaluate cooperative opportunities. We have
    scientists at the Northeastern and Rocky Mountain Research Stations
    looking at ways to link our ground-based point data to remote sensing
    data to develop ground registered maps as a spatial analysis tool.
        Other promising opportunities include scheduled meetings with the
    Navy to assess aerial based Synthetic Aperture Radar and with NASA to
    look at Vegetation Canopy Lidar (low-power laser technology) to develop
    a 3-dimensional vegetation profile for estimating biomass.
        Question. The budget justification discusses the continued demand
    for wood fiber by referring to ``the residential building industry,
    which is dependent on forest products.'' In addition, the committee has
    received testimony relative to the need to increase utilization of
    metal and wood sites for construction purposes. To what degree is
    Forest Service Research involved in the development of alternative wood
    products research (plastic/wood composites, metal framing, etc.) which
    if developed could contribute to America's environmental health while
    stabilizing demand? What is the long term prognosis for the use of such
    products?
        Answer. Forest Service Research, through the Forest Products
    Laboratory in Madison, Wisconsin and other field laboratories, is
    contributing to improving America's environmental health through our
    recycling research program. Research is contributing significantly to
    mitigating increased demand for wood products by providing for reuse
    and recycling of wood and paper. We are developing new technologies,
    such as composites made from recycled wood and paper, in combination
    with plastics or inorganic compounds, to produce products that can be
    used in housing. Not only does recycling decrease use of raw wood
    products, but it also reduces the need for solid waste disposal space.
        The forest resource is changing. Many of the forests consist of
    dense, overstocked stands with smaller diameters and of mixed species
    and quality than traditionally used. Particularly in the West, many of
    these stands are at risk from insect and disease infestation and from
    intense wildfires. New ways of using this low-value timber to produce
    wood-based products for housing, such as composite panels and lumber,
    are also helping to defray the costs of ecosystem restoration. Some
    speciic examples include: (1) Evaluating the potential to use small
    diameter material for structural systems such as trusses, laminated
    veneer lumber, and oriented strand board; (2) Developing new methods of
    connecting smaller pieces of wood together to make larger dimension
    lumber; (3) Developing appropriately-scaled technologies for drying and
    processing this low-valued material in cost effective ways.
        Cost comparison of wood framing versus steel framing indicates that
    steel becomes competitive when lumber is generally above $500/mbf.
    Steel systems in residential construction have been boosted by the
    inclusion of light-gauge steel framing prescriptive standards in some
    codes. However, some analysis indicates that if increased insulation
    costs for steel framing is considered, steel studs may not be cost-
    effective. Although some builders are moving to steel studs, others
    have switched back to wood when lumber prices fell below $500/mbf. The
    wood/plastic composites market is expected to be speciality products,
    instead of commodity products. We anticipate that wood/plastic
    composites will be used in housing applications primarily in doors and
    windows, interior molding and trim, on interiors and perhaps in siding
    and roofing. We estimate that wood/plastic composites will occupy about
    10 to 15 percent of this wood market by 2000. Other new composites for
    housing expected to make major advances are wood I-joists and laminated
    veneer lumber (LVL).
        Question. Significant forest and rangeland research is performed by
    industry and universities in addition to the Forest Service. What
    amount of funding by the Forest Service is involved in cooperation with
    industry and universities in performance of the many important research
    functions? Is information uniformly shared with these agencies?
        Answer. The research needed to complete our mission and the
    appropriation level we receive play major roles in determining the
    funds available for our extramural research efforts. Extramural
    research expenditures averaged $24 million dollars the past 5 years,
    approximately 13 percent of annual appropriations.
        Information developed as a result of our cooperative efforts is
    available to the public in formats such as publications, symposia,
    meetings and the internet.
        The USDA Current Research Information System (CRIS) contains
    synopses of all federally funded research. CRIS can be accessed
    electronically by anyone. One use of CRIS information is to minimize
    duplication in research activities.
        Question. As a result of budget reductions the agency obtained
    Reduction in Force (RIF) authority to significantly reduce the size of
    the Research organization. To what degree did expected reductions
    occur? Was a RIF actually implemented? If not, what actions were taken
    to bring program spending in line with spending authorizations? Are
    units with the agency possibly facing RIF?
        Answer. The Forest Service Research (FSR) organization has
    decreased its workforce by approximately 9 percent since the beginning
    of fiscal year 1996. On October 1, 1995, the work force numbered
    approximately 3,104 employees, an estimated 78 percent of which were
    permanent and the remaining 22 percent in temporary appointments such
    as term and post doctoral. As of April 1, 1997, the work force is
    comprised of approximately 2,765 employees, with the ratio between the
    permanent and temporary work force remaining essentially unchanged.
        Due to an 8 percent reduction ($15.5 million) in the Forest and
    Rangeland Research appropriation in fiscal year 1996, FSR anticipated a
    Reduction in Force (RIF) of approximately 70 people. Only 13 people
    were actually terminated through the RIF process. FSR avoided other RIF
    actions and reduced the size of its work force through an aggressive
    and organized outplacement effort which included use of the Agency's
    Employee Placement System, early out and buyout authorities as
    incentives to retire, directed reassignments, and outplacement to other
    government agencies and the private sector.
        Given the President's Budget funding level, we anticipate the
    possibility of using RIF authority in one additional case during fiscal
    year 1997 (at the North Central Station headquartered in St. Paul, MN).
        The effort to bring program spending in line with spending
    authorizations also included reductions in travel, training, awards,
    and minor purchases; leaving funded positions vacant; and closing or
    consolidating offices. During fiscal year 1996 offices were closed in
    Fairbanks, AK; Bend, OR; Carbondale, IL; Orono, ME; Macon, GA;
    Gulfport, MS; and Gainesville, FL. Offices were consolidated in Oxford,
    MS, and New Orleans, LA. In fiscal year 1996, we projected costs
    associated with the closures and consolidations to be about $702,500.
    This includes the costs of transfers of station, building repairs and
    maintenance in anticipation of transfers or sales, and administrative
    costs of transfers of ownership.
        Any changes to the President's Budget will have immediate personnel
    consequences. Each $1 million reduction will affect 19 people, up from
    15 people 3 years ago--a reflection that non-personnel costs have
    already been aggressively reduced.
                             national forest system
    Forest health
        Forest Health is a major emphasis item for the Forest Service.
        Question. How is this emphasis [forest health] compatible with and
    how does it contrast with restoring and preserving the economic health
    of communities which rely on the National Forests?
        Answer. An emphasis on forest health is not only compatible with
    restoring and preserving economic health of forest-dependent
    communities, it is essential to the long-term sustainability of such
    communities. A clear example is the reduced risk of catastrophic
    wildfire associated with improved forest health in many areas, which
    can eliminate major parts of the resource base of the community as well
    as threaten its very existence. Reducing the risk of fire will often
    involve removal of commercially valuable timber which can be of direct
    benefit to the local economy.
        Likewise, the social, economic, and environmental condition of
    local communities directly influences the health of the Nation's
    forests. Many communities depend on forest resources to maintain and
    improve their economic well-being. In order to use resources wisely and
    understand the integral connections between the bio-physical and the
    socio-economic worlds, many community-based organizations are taking an
    active role in the discussions and actions aimed at improving forest
    health.
        Through the Economic Action Programs (EAP), the Forest Service is
    working with hundreds of rural communities to develop job skills,
    technology, businesses, educational and leadership programs, and
    collaborative methods for community-based stewardship of natural,
    cultural, and historic resources. Through local action teams and the
    Economic Recovery program, a component of the EAP, the Forest Service
    is using a strategic approach to assist rural communities throughout
    the country to develop broad-based plans and to take an active role in
    natural resource issues on private as well as federal lands. The
    capacity building in the communities results in more effective
    interaction with natural resource managers as well as economic
    diversification and increased self-sufficiency.
        Question. How does the term ``Forest Health'' imply management
    actions which are different than past practices of sound land
    stewardship? What specific land management actions will occur under the
    Forest Health initiative that would not otherwise have occurred as a
    normal course of business over the past 5 years?
        Answer. Management actions taken by the Forest Service to enhance
    forest health, now and in the future, will be consistent with sound
    ecosystem management principles. In some areas in the western United
    States, our past success in eliminating frequent low-intensity
    wildfires has led to conditions of dense accumulation of underbrush and
    over-crowded stands. These conditions render forests highly susceptible
    to large damaging fires, insects, and diseases. We intend to
    substantially increase fuels management and thinning in these areas.
                            land management planning
        Land management planning is proposed for a $3.9 million increase.
    Beginning with 1998 the National Forests are beginning the process of
    land management plan revision.
        Question. The fiscal year 1998 budget proposal will support the
    revision of 4 national forest plans and the initiation of revision for
    58 additional forest plans. With 81 of the 123 total national forest
    plans facing revision by 2002, how will future land management planning
    budget requests be affected?
        Answer. Based on the earliest experiences the Forest Service has
    had with Forest Plan revisions in the National Forests of Texas, the
    Francis Marion (SC), the Black Hills (SD), the Targhee (ID), and the
    Rio Grande (CO), estimated costs per revision are about $500,000 per
    year for 4 years. Between fiscal year 2000 and fiscal year 2002 we
    expect to have some 70 revisions underway each year. Future budgets
    will continue to reflect the best balance of priorities.
        Question. Federal court rulings based on the Federal Advisory
    Committee Act have resulted in delays to such significant ``eco-
    region'' planning efforts as the President's Northwest Plan and the
    Sierra Nevada Ecosystem Project. Other projects such as the Tongass
    Land Use Management Plan and the Interior Columbia Basin Ecosystem
    Management Project may be affected. What other significant projects
    could also be affected?
        Answer. No perceived delay was realized as a result of the December
    31, 1996 District of Columbia Appeals Court ruling that the Sierra
    Nevada Ecosystem Project was subject to the requirements of the Federal
    Advisory Committee Act. The Sierra Nevada Ecosystem Project Report was
    released in June of 1996.
        The Forest Service intends to conduct activities related to the
    Tongass Forest Plan, the Interior Columbia Basin Ecosystem Management
    Project, and others in such a manner that Federal Advisory Committee
    Act provisions will not be violated. Federal Advisory Committees will
    be chartered when it is appropriate to do so.
        Questions. (a) Can it be expected that larger ``eco-region''
    planning efforts will reduce the number and complexity of forest plans
    which will require revisions? (b) If so, what are the anticipated
    effects and efficiencies?
        Answers. (a) These large planning efforts which often result in
    multiple forest plan amendments, will not reduce the number or
    eliminate the requirement to revise forest plans on a 10-year cycle or
    at least every 15 years as required under NFMA. Ecosystem assessments
    will, however, reduce the complexity of the forest planning effort. (b)
    The major efficiency is that cumulative effects questions are largely
    addressed by the assessment. This allows forest planning efforts to
    focus on how the individual plan fits within the broader context
    identified by the assessment. Assessments now provide this perspective,
    and reduce the burden on individual forests to address cumulative
    effects.
        Other major effects from assessments include the efficiency of
    collecting common data for the participating land ownerships in the
    project and the active support of key science personnel in reviewing
    federal management strategies. Collection of common data is usually a
    first step to enable different land entities to effectively communicate
    and develop management approaches based on a common framework. The
    involvement of key scientists on the assessment teams also ensures the
    assessment itself will have scientific credibility in addressing key
    questions.
        Within the past year, final reports have been issued by the three
    major eco-regional assessments which have been ongoing for several
    years. These reports are the Interior Columbia Basin Ecosystem
    Management Project Report, the Sierra Nevada Ecosystem Project Report,
    and the Southern Appalachian Assessment Report.
        Question. How has the Forest Service begun to incorporate the
    information contained in these reports into Forest Plans within the
    areas covered by these reports?
        Answer. Two draft environmental impact statements have been
    prepared utilizing information from the Interior Columbia Basin
    Ecosystem Management Project Report. Future decisions associated with
    these two statements will amend up to 74 Forest Service and BLM
    management plans. These two documents were distributed the week of June
    9 of this year, with final documents expected 1 year later.
        Available information from the Sierra Nevada Ecosystem Project was
    considered in the development of the California Spotted Owl preliminary
    Revised Draft Environmental Impact Statement, which will significantly
    amend ten forest plans.
        Information contained in the Southern Appalachian Assessment is
    currently being utilized in the revision of five forest plans.
    Information in this assessment will form the basis for the issues and
    forest plan decisions that will be examined during the plan revision
    process.
        Question. How have project plans and management activities changed
    because of these reports?
        Answer. Ecosystem assessments have brought about a major change in
    project planning as a result of focusing increased attention and
    concern for the ultimate condition of the ecosystem. In the past,
    projects were usually designed primarily to accomplish a particular
    goal of delivering goods and services to the public with a disclosure
    of environmental effects. Today, projects are designed with a major
    consideration of how long-term ecosystem health will be affected by the
    project, while also providing certain goods and services. Assessments
    have highlighted the effects that certain kinds of projects and
    activities may have on the ecosystem. Assessments have aided
    understanding of relationships among forests within similar ecosystems
    and across ownerships. They have provided managers with vital resource
    information for informed decisionmaking.
        Question. How does the Forest Service plan to incorporate the
    findings of these reports into its daily management and planning
    activities?
        Answer. The results of the assessments will be used as a management
    tool that will help guide, as appropriate, the daily management and
    planning activities in two ways: (1) change or affirm management
    direction in land and resource management plans; and (2) reconsider or
    validate appropriate site-specific projects to implement plan
    direction. In the first case, land and resource management plans may be
    amended (or in the case of the Southern Appalachian Assessment,
    revised) to change or add goals, objectives, standards, or guidelines
    that set the framework for future site-specific, project-level
    management activities. These plan level decisions may affect the type,
    design, location, and timing of projects proposed to implement the new
    plan direction.
        In the second case, land and resource management plan direction may
    be compatible with the results of the assessment, but new information
    about how the ecosystem responds to particular management activities
    may be helpful in improving the method, design, or timing of projects
    proposed to implement plan direction.
        Question. Salmon recovery is a major issue in the Pacific
    Northwest. What cooperative efforts and through what specific programs
    is the agency assisting other federal, state and local agencies in this
    recovery program? How much funding has been spent relative to salmon
    recovery in the past 3 years?
        Answer. The Forest Service uses a number of cooperative efforts to
    accomplish salmon recovery in the Pacific Northwest. The Northwest
    Forest Plan (NFP) includes a comprehensive watershed restoration
    strategy designed to improve entire watersheds inhabited by salmon. The
    NFP places strong emphasis on Federal/State agency cooperation and on
    local coordination and involvement in whole watershed restoration. A
    second major cooperative effort for salmon recovery is the Northwest
    Power Planning Council's Columbia River Basin Salmon recovery program.
    The Council's effort affects 10 National Forests. Through the Columbia
    River Basin Andromous Fish Policy (1992), the FS committed to helping
    achieve a doubling of salmon runs in the basin and is involved in
    cooperative planning, restoration and monitoring/evaluation. Finally
    the FS is an active partner in a variety of State sponsored restoration
    initiatives. The most notable recent example is the Oregon Coastal
    Salmon Restoration Initiative developed to recover coastal stocks of
    coho salmon. This was an interagency effort spearheaded by Oregon
    Governor Kitzhaber. The FS has been actively involved in its
    development and has made a number of commitments including active
    participation and cooperation in the restoration of coastal watersheds.
    Similar efforts are soon expected to broaden the scope of this effort
    to most of Oregon and Washington.
        On a local level, many District and Forest fishery biologists
    provide technical support to watershed councils. Watershed councils are
    increasingly viewed as the key to generating grassroots support for
    salmon recovery.
        The FS, Pacific Northwest Region has expended approximately
    $23,000,000 per each of the last 3 years for salmon habitat restoration
    activities.
        The Table below illustrates the approximate distribution of these
    funds by broad program area. The table includes Trust Funds (for
    example, KV) that contribute to meeting restoration objectives. Not
    included are a variety of funds, which indirectly benefit salmon
    habitat restoration, such as funds for road/trail and recreation
    maintenance and construction, land acquisition, etc.

                                                PACIFIC--NORTHWEST REGION
    ----------------------------------------------------------------------------------------------------------------
                                                                               Expenditures by fiscal year--
                              Program area                           -----------------------------------------------
                                                                           1995            1996            1997
    ----------------------------------------------------------------------------------------------------------------
    Coordination and habitat management.............................      $4,505,000      $3,695,000      $3,420,000
    Jobs in the Woods...............................................      11,100,000      11,000,000      11,176,000
    Mid/Upper Columbia River restoration............................       2,350,000       1,300,000       1,900,000
                                                                     -----------------------------------------------
          Subtotal..................................................      17,955,000      15,995,000      16,496,000
    Trust Fund Program..............................................   \1\ 6,500,000       6,890,000       6,715,000
                                                                     -----------------------------------------------
          Total.....................................................      24,455,000      22,885,000      23,211,000
    ----------------------------------------------------------------------------------------------------------------
    \1\ Estimated expenditures for trust funds for fiscal year 1995.

        Question. During the fiscal year 1997 appropriations hearing, Mr.
    Lyons stated that in the year 2000, recreation will contribute $97.8
    billion to the U.S. economy, while timber will contribute only $3.5
    billion. The Subcommittee staff has reviewed a January 1997 report from
    three PhD.s with natural resource economics expertise which strongly
    disputes this contention. The report states that timber related
    functions will provide 2.25 times the economic contribution that
    recreation, wildlife and fish programs combined will provide. Please
    provide a detailed analysis of this report with specific attention to
    the contribution of timber to the Gross Domestic Product versus the
    contribution of Recreation. Please identify the basis for the
    statements made by Mr. Lyons and specifically how his contentions
    differ from those presented in the January 1997 report.
        Answer. The basis for Mr. Lyons' statements about the contributions
    of recreation and timber to the gross domestic product is the economic
    analysis of job and income effects displayed in the Draft 1995 Forest
    and Rangeland Renewable Resources Planning Act (RPA) Program. This
    analysis estimated the jobs and income (defined as contributions to
    gross domestic product) that can reasonably be associated with Forest
    Service activities and outputs from the National Forests, as
    anticipated for the future based on the proposal in the Draft 1995 RPA
    Program. The January 1997 report referred to by the Subcommittee
    differs from the Forest Service analysis in three main areas: 1) the
    analysis in the January 1997 report includes only a fraction of the
    anticipated Forest Service recreation use (assumed recreation use
    estimates are too high, reduced local use, and reduced use based on the
    assumption that use would decrease if a fair market value fee was
    charged); 2) timber effects are all calculated at end use in
    residential construction, rather than at the sawmill or pulpmill
    (Forest Service estimates about 60 percent of volume harvested is used
    in housing construction); and 3) the timber effects are estimated in a
    national model. Regarding the first two points, we believe the
    assumptions and procedures used in the Forest Service analysis for the
    Draft 1995 RPA Program were appropriate given the purpose and focus of
    that analysis. Regarding the third point, we do plan to use a national
    model for estimating timber impacts for the Recommended RPA Program.
    The Subcommittee has been provided a paper that provides a more
    detailed evaluation of the January 1997 report and how they differ from
    the Forest Service approach used in the analysis of the Draft 1995 RPA
    Program.
        The economic impact analysis of the Draft 1995 RPA Program provides
    measures of the total value or importance of economic activities
    associated with Forest Service resource outputs. We believe it is
    important to stress that neither of the economic impact analyses should
    be used as the basis for budget allocation or investment decisions,
    since these analyses were not designed for those purposes. Nor does the
    analysis suggest that production of a variety of uses is not compatible
    or desirable. Other types of analysis are needed to inform investment
    and budget allocation decisions, such as marginal analysis that looks
    at the effects of changes in levels of investment. All Forest Service
    programs have value and importance to the Nation and to local
    communities. Various measures are needed to represent such values and
    importance.
                     forest service decision making process
        The Forest Service's decision making process is a critical
    function; but it is costly. In the past 20 years, the Forest Service
    has spent over $20 million developing multiyear plans for managing
    timber production, livestock grazing, recreation, fish and wildlife
    habitat, and other legislatively mandated uses on national forests. The
    Forest Service also spends about $250 million per year for
    environmental studies to support individual projects. However,
    according to an internal Forest Service report (Final Report of
    Recommendations: Project-level Analysis Re-engineering Team 11/17/95),
    inefficiencies within this process cost up to $100 million per year at
    the project level alone. Critics state that by the time the agency has
    completed its decision making process, it is often unable to carry out
    the plans because of changes in natural conditions and funding, or new
    information and events.
        Question. What actions were recommended in the internal Forest
    Service study to reduce the inefficiencies within its decision making
    process?
        Answer. The NEPA Re-engineering study was a Region 8 and 9 effort
    completed in November of 1995. This report was presented as a draft
    report for use by the agency as a whole. The Forest Service has used
    this study in guiding improvements to the NEPA process. The report
    contains ten recommendations as follows:
        1. Limit NEPA analysis to discretionary Forest Service actions that
    may have an effect on the quality of the physical and biological
    environment.
        2. Address landscape issues at appropriate levels and incorporate
    analyses into either Forest Plan or project-level decisions.
        3. Maintain a centralized system of environmental information that
    is useful and easily accessible to project analysis teams.
        4. Eliminate redundant analyses; focus on what is new.
        5. Use existing analyses to support new decisions when possible.
        6. Develop alternatives in environmental assessments only when
    there are unresolved conflicts.
        7. Expand categorical exclusions and develop new categories based
    on ecological units and thresholds of acceptable change.
        8. Accept appeals as legitimate way to resolve substantive
    conflicts.
        9. Limit appeal standing and appeal points to substantive issues
    raised in written comments during public comment periods.
        10. Use litigation proactively to support Forest Service NEPA
    policy.
        Current laws provide the authority to implement each of these
    recommendations, with the possible exception of recommendation number
    9.
        Question. Has the Forest Service acted on the recommendations in
    the internal study?
        Answer. The following actions are being taken by the Forest Service
    based on the internal study recommendations:
        1. Link NEPA analysis to discretionary FS actions (i.e. those
    actions for which we have primary authority, as opposed to those
    actions for which we provide input to other federal agencies but do not
    have primary authority.)
        The FS Manual and Handbooks are being changed to reflect what
    environmental analysis and documentation is required and not required
    for many agency activities. Examples are: (1) special use permit re-
    issuance, (2) use of roads by contractors, (3) road maintenance by
    State agencies, (4) granting rights-or-ways across NF lands, (5) FERC
    re-licensing, and (6) grazing permit issuance.
        2. Address landscape issues at appropriate scales (e.g., an issue
    pertinent to an entire region should be addressed at a regional scale,
    while one pertinent only to a smaller geographic area should be
    addressed at that scale)
        A number of landscape assessments have been or are being prepared
    over the next few years. These assessments will serve as a basis for
    environmental analyses that can be incorporated by reference into
    Forest Plan and project analyses. These Ecoregional Assessments
    include: Interior Columbia River Basin, Sierra Nevada, Ozark-Ouachita
    Highlands, Great Lakes, Northern Great Plains and Southern Appalachian.
        3. Maintain a centralized system of environmental information. The
    FS has initiated a number of initiatives to improve availability and
    useability of information. The Resource Inventory and Monitoring
    Institute is now housed in Ft. Collins, CO to develop better procedures
    for integrating monitoring and inventory into decision making. A Common
    Survey Data Structure (CSDS) effort is underway to standardize data
    protocols for resource information throughout the agency. The protocols
    from the Monitoring Institute and CSDS will allow integrated data bases
    to be shared among Regions and agencies. Additionally, a pilot CD ROM
    test is being performed in fiscal year 1997 to organize a centralized
    collection of administrative appeal decisions, NEPA case law, and NEPA
    ``good'' examples for use by the field.
        4. Eliminate redundant analyses.As the FS moves towards full use of
    the new 615 computer equipment and network, it will be possible to
    immediately share and retrieve environmental analysis done anywhere
    within the agency. The 615 technology is being tested on the Kootenai
    National Forest to demonstrate efficiencies gained in environmental
    analysis and documentation. The pilot testing includes Geographical
    Information System (GIS) analyses, direct transfer of analysis tables,
    matrices, and graphics to environmental document, and realtime public
    review of computer analyses. The Kootenai has estimated considerable
    savings in document preparation time, as much as 20 to 40 percent.
        5. Use existing analyses to support decisions. The agency has
    developed a Decision Protocol that incorporates this action item. Pilot
    applications of the Protocol within each Region are showing reductions
    in information gathering costs as high as 40 percent.
        6. Develop a more limited set of alternatives. The Agency's
    Decision Protocol incorporates this action item. The environmental
    issues are addressed through mitigation where possible, unresolved
    conflicts about resource allocations are being used to focus the
    alternatives. Regional offices also are working with forests on ways of
    reducing the number of alternatives without compromising quality
    environmental analysis.
        7. Expand Categorical Exclusions. The NEPA Handbook is being
    changed to: (1) expand the scope of categorical exclusions; (2) clarify
    the application of extraordinary circumstances; and (3) permit Regions
    to establish categories specific to local conditions. The categorical
    exclusions are being coordinated with the BLM to ensure greater
    consistency between the two land management agencies. A draft of
    proposed categorical exclusions is scheduled for fall 1997.
        8. Accept appeals as a way to resolve conflict. Alternative dispute
    resolution is being tested in connection with range appeals to allow
    for better communication, than our current system allows, between the
    Forest Service and appeallants. This technique may be tried in other
    areas depending on the nature of success.
        9. Limit appeal standing and points of appeal to substantive
    conflicts. No action to date. Concerns exist that this will not be in
    conformance with the Administrative Appeal Law and would require a
    change in legislation for the Forest Service.
        10. Use litigation proactively to support NEPA policy. The Office
    of General Counsel has written a number of papers that spell out the
    legal strategy to support forest planning, project planning, tiering,
    and unavailable and incomplete information. The OGC has engaged in a
    series of discussions with CEQ and DOJ on the scope of Forest Plans,
    application and timing of ESA with NEPA and application to Forest
    Plans. This dialogue will continue.
        Question. If actions have been taken on the recommendations in the
    internal study, how much has the Forest Service saved in terms of
    appropriations and time as a result of implementing the
    recommendations?
        Answer. Savings and efficiencies are being made as improvements are
    implemented. Initial estimates of savings on environmental analysis
    have been estimated as high as 20 to 40 percent depending on the
    project. Improvements address many different aspects of the
    environmental analysis and project approval, including how we process
    special use applications, how we address range allotment analyses,
    earlier and streamlined consultation with regulatory agencies,
    consideration of increasing situations where Categorical Exclusions are
    appropriate and limiting the purpose and need for action. It is
    difficult to assess cost or time savings from any one action. We will
    continue to make improvements and over time will be able to estimate
    savings in a meaningful way.
              interior columbia basin ecosystem management project
        This effort has required extensive collaboration between agencies.
    The Draft Environmental Impact Statements are scheduled for release in
    early 1997.
        Question. What permanent cooperative arrangements can be expected
    between the Forest Service and the Bureau of Land Management which will
    reduce costs and promote efficiency?
        Answer. No permanent cooperative arrangements have been put in
    place at this time. While it is premature to know the specifics of what
    topics will be subject to any cooperative agreements, we expect some
    attention will be focused on field monitoring and data collection and
    storage; on watershed analysis and sub-basin reviews as part of
    implementation of this strategy, long-term consistency in application
    of standards and objectives, and that in some cases the agencies will
    share personnel.
        Questions. (a) How have the respective missions of the Fish and
    Wildlife Service and the National Marine Fisheries Service benefitted
    this process? (b) Have there been any negatives to this cooperative
    effort?
        Answers. (a) The involvement of these two agencies and the
    Environmental Protection Agency has been to ensure that broad-scale
    ecosystem management strategies comply with environmental laws like the
    Clean Water Act and the Endangered Species Act. A second benefit has
    been to develop interagency partnerships that will facilitate future
    implementation. (b) No. While the draft EISs took longer than expected
    to produce, we believe the documents are much stronger than they would
    be otherwise, and there is a stronger commitment from all involved
    agencies.
        Question. What level of participation has occurred with State and
    local governments in the planning process?
        Answer. Early involvement of other federal agencies and county and
    state governments is a highlight of this project. Counties and States
    have been involved from the early stages. Four state associations of
    counties formed the Eastside Ecosystem Coalition of Counties in 1994 to
    keep informed and involved in the project and its progress. A
    memorandum of understanding between the Project Managers and Eastside
    Ecosystem Coalition of Counties was signed in 1995. Mutual benefits
    have been gained from sharing different perspectives, data, and
    information. A June 30, 1995 letter to U.S. Senator Mark Hatfield, the
    Association of Oregon Counties states:
        ``This is the first time a multi-state county group has
    participated directly and from the beginning in a significant federal
    resource management planning process. There will likely be a positive
    impact on the federal work product, and a foundation has been laid for
    genuine, long-term improvements in federal/county communication. The
    National Association of Counties is following progress closely, because
    EECC is creating the model for county involvement in other regions.''
        Other key developments from this project are new relationships
    established with tribal governments. Significant time and energy has
    gone into building trust and working relationships with more than 20
    separate tribal governments in the project area. Past experiences have
    made these tribes skeptical of the ability of this project to produce
    results. Tribes have not been involved in early stages of a project in
    the past, and were not prepared with money or people to react quickly.
    The benefits of the relationships established are valuable and
    necessary for the future.
        The project involved state, tribal and local governments and
    Resource Advisory Councils and Province Advisory Committees in a
    process to help identify the preferred alternative. Meetings and
    presentations to these governments and advisory groups occurred
    beginning in the summer of 1996, and continued into the winter of 1997.
    These relationships form the basis for cooperation which can depolarize
    divided opinions about conservation and management that now exists.
        Question. Within the alternatives being considered please identify
    the commodity outputs being analyzed under each alternative.
        Answer. The potential outputs from the various alternatives are
    displayed below. While potential outputs are displayed, the decisions
    for the ICBEMP will not change the outputs identified in current land
    management plans; such changes will occur, as needed, in future plan
    revisions.

           COMMODITY OUTPUTS FOR EASTERN OREGON AND EASTERN WASHINGTON
                                [Eastside draft]
    ------------------------------------------------------------------------
                                                           Estimated--
                                                   -------------------------
                                                       Timber
                                                     volume in     AUM's in
                                                        MMBF      thousands
    ------------------------------------------------------------------------
    Alternative:
        1.........................................          887          685
        2.........................................          393          674
        3.........................................          724          681
        4.........................................          765          674
        5.........................................          923          730
        6.........................................          625          674
        7.........................................          313          378
    ------------------------------------------------------------------------
    Source: From table 4-50, Eastside draft environmental impact statement.

             COMMODITY OUTPUTS FOR IDAHO, W. MONTANA, AND N. NEVADA
                       [Upper Columbia River basin draft]
    ------------------------------------------------------------------------
                                                           Estimated--
                                                   -------------------------
                                                       Timber
                                                     volume in     AUM's in
                                                        MMBF      thousands
    ------------------------------------------------------------------------
    Alternative:
        1.........................................          840        1,910
        2.........................................          820        1,878
        3.........................................        1,120        1,899
        4.........................................          944        1,878
        5.........................................        1,390        2,036
        6.........................................          610        1,878
        7.........................................          440        1,055
    ------------------------------------------------------------------------
    Source: From table 4-50, Upper Columbia River basin draft environmental
      impact statement.

        TOTAL COMMODITY OUTPUTS FOR INTERIOR COLUMBIA BASIN PROJECT AREA
                 [Eastside and Upper Columbia River basin draft]
    ------------------------------------------------------------------------
                                                           Estimated--
                                                   -------------------------
                                                       Timber
                                                     volume in     AUM's in
                                                        MMBF      thousands
    ------------------------------------------------------------------------
    Alternative:
        1.........................................        1,727        2,595
        2.........................................        1,213        2,552
        3.........................................        1,844        2,580
        4.........................................        1,709        2,552
        5.........................................        2,313        2,766
        6.........................................        1,235        2,552
        7.........................................          753        1,433
    ------------------------------------------------------------------------
    Source: Totaled from tables 4-50, Eastside draft environmental impact
      statement, and 4-50, Upper Columbia River Basin draft environmental
      impact statement.

                                   recreation
        The focus of the recreation program in fiscal year 1998 centers on
    universal designs for accessibility; the heritage program; implementing
    new legislation on permit fees for ski areas and the Recreation Fee
    Demonstration sites; emphasis on special recreation areas including
    wilderness and wild and scenic rivers; preparing for the 2002 winter
    Olympics; and testing the Public-Private Venture concept.
        Question. Please provide a listing of the cooperative recreation
    projects which the Forest Service intends to spend $15 million to
    perform in fiscal year 1998; and an identification of the sources for
    the estimated $32.5 million in cooperative funds.
        Answer. Although we have not identified fiscal year 1998 partners
    for specific projects, the following list provides a few examples of
    current projects types and partners:
    Georgia, North Broad River Recreation Restoration
      --Reconstruct campsites; construct trails, interpretive signs, and
            accessible fishing deck; relocate road; stabilize streambank;
            and enhance fish habitat.
      --Partners: Georgia Department of Natural Resources, Trout Unlimited,
            and Wish to Fish (physically challenged group).
      --Funding: FS $9,500 Partners $9,600.
    Colorado, Colorado Fourteeners Initiative
      --Construct sustainable high country trails, reclaim erosion areas,
            install information kiosks at two trailheads, and build a new
            parking area.
      --Partners: The American Mountain Foundation, Volunteers for Outdoor
            Colorado, Great Outdoors Colorado, Outward Bound, The Colorado
            Mountain Club, and Colorado Fourteeners Initiative.
      --Funding: FS $53,900 Partners $62,800.
    Alaska, On Your Knees Cave
      --Construct entry gate, trail, and tent platform; continue research;
            develop a stewardship plan; develop and implement interpretive
            and education programs for a newly discovered cave and
            archaeological site of international significance.
      --Partners: Community Volunteers Association, Denver Museum of
            Natural History, Port Protection Association, and National
            Geographic Society.
      --Funding: FS $42,900 Partners $72,320.
    Utah, Huntington Watershed Restoration
      --Reconstruct 67 camping sites, construct three restrooms, close and
            rehabilitate 25 camping sites, improve angler trails, expand
            the group campground, and re-establish streamside vegetation.
      --Partners: Genwal Resources, Inc., Castle Country Travel Council,
            Carbon County, Sanpete County, Canyonlands Natural History
            Association, Emery County, State of Utah (Division of Wildlife
            Resources, Department of transportation, and Parks and
            Recreation), Trout Unlimited, and local Energy/Mining
            interests.
      --Funding: FS $90,000 Partners: $90,000.
    North Carolina, Carolina Hemlock Campground
      --Drill new well; install new pump, chlorinator, and distribution
            system; and construct eight ADA accessible water fountains and
            hose bibs.
      --Partners: Cradle Of Forestry Interpretive Association.
      --Funding: FS $40,000 Partner: $40,000.
    Montana, Path of the Grizzly Interpretive Trail
      --Construct one half mile of trail; install benches, kiosks, and bike
            racks; design, fabricate and install interpretive media; and
            design and print education material.
      --Partners: Blackfeet Nation, Meridian Aggregate, Montana Department
            of Transportation, Northwest Interpretive Association, Wildlife
            Forever, Montana Fish, Wildlife, and Parks, and The Nature
            Conservancy.
      --Funding: FS $13,000 Partners: $79,000.
    Oregon, Pine Ridge Day Use Mitigation
      --Construct access road, 45 car trailhead and OHV staging area,
            restrooms, well, drainfield, and utilities.
      --Partners: Oregon Department of Transportation.
      --Funding: FS $175,000 Partner $445,000.
    California, Lake Tahoe Heritage Preservation and Interpretation
      --Stabilize the Newhall House, historic structure; preserve and
            interpret structures related to Chinese Encampment, develop and
            install interpretive signing on a National Recreation Trail,
            one of original routes into Basin, and at an historic gazebo.
      --Partners: Tahoe Heritage Foundation.
      --Funding: FS $5,550 Partner $9,750.
    New Mexico, Tres Piedras Trail 41
      --Construct two new one-half mile sections of trail; sign 16 miles of
            access roads; and stabilize, drain, revegetate, and put to bed
            one mile of existing road.
      --Partners: Chuckwagon Trailriders, Rocky Mountain Youth Corps, and
            New Mexico Wildlife Federation.
      --Funding: FS $6,100 Partners $9,460.
    Wisconsin, Wilson Flowage Dike Reconstruction
      --Reconstruction of two dikes on a premier waterfowl flowage with
            trophy northern pike fishery.
      --Partners: Ducks Unlimited, Great Lakes Indian Fish and Wildlife
            Commission, National Fish and Wildlife Foundation, and
            Wisconsin Department of Natural Resources.
      --Funding: FS $20,000 Partners $250,000.
        Question. The fiscal year 1998 Explanatory Notes do not provide
    much detail on the costs of planning and investment in facilities and
    infrastructure for the 2002 Winter Olympics in Utah. What major efforts
    will be underway in fiscal year 1998 relative to the 2002 Winter
    Olympics?
        Answer. Funding is provided for the following major efforts: A 4-
    person team to manage, guide, interface, and partner with the myriad of
    local, national, and international organizations to develop and
    implement annual plans so that Forest Service representation in the
    2002 Winter Olympics is fully visible with appropriate representation.
    Work also continues with the Snowbasin land exchange. ($300,000)
        Salt Palace visitor information partnership; Anderson Cove/
    Lodgepole Campgrounds-PPV, NEPA, planning; Snowbasin land exchange;
    venu preparation, and natural resources conservation education.
    ($426,000)
        50 percent of the Regions Capital Investment Construction/
    Reconstruction program. ($1.1 million)
        Trail re/construction. ($400,000)
        Questions. A December 1996 GAO report stated that the Forest
    Service has failed to collect fair market value for a multitude of
    commercial and non-commercial special use permits. This issue was
    recently highlighted in an NBC News ``Fleecing of America'' episode. In
    that episode NBC stated that the Forest Service refused to comment
    about the validity of the GAO report. The agency budget justification
    states that recreation special uses generate $47.5 million for the U.S.
    Treasury, but it does not address any changes to the system which might
    provide for increased revenue's on a scale comparable to similar state
    owned uses as referred to by GAO. The budget justification speaks to
    updating recreation residence fair market value by 1999 and to
    implementing new ski resort fee system legislation. Is it the agency's
    contention that these initiatives will adequately address issues raised
    by GAO? Has the agency responded to the GAO report?
        Answers. The Forest Service generally agrees with the report's
    conclusions and has so stated in its response to GAO. Many holders of
    special use authorizations do not pay fair market value for the right
    and privilege of use and occupancy of National Forest System lands. The
    Forest Service recognizes the importance of obtaining a better return
    for the use of public resources and to recover the costs for providing
    these recreation opportunities. It endorses the concept of placing the
    special use authorization program on a more business-like basis.
        The Forest Service is updating its fee systems to better reflect
    fair market value. The question mentions recreation residence and ski
    resort fees as two examples. Recreation residence appraisals should be
    completed in fiscal year 2002. The recently passed ski fee legislation
    will be implemented this summer. The challenge with any fee system is
    balancing the benefits of retaining its currency with the
    administrative costs of doing so. In many cases, the Forest Service is
    indexing fee schedule rates to retain some degree of fair market value
    currency between periodically scheduled (and costly) fee structure
    updates. The Ski Fee legislation calls for a review in 1999 to
    determine if it indeed meets fair market return.
        The Forest Service is developing Cost Recovery regulations as
    recommended by GAO. Once implemented, these regulations would recover
    from the permittee costs borne by the Forest Service in responding to,
    processing and administering permits. Implementation is anticipated in
    the fall of 1997.
        We cannot yet predict what change our current initiatives will make
    on receipts to the U.S. Treasury. To do that we first need to conduct
    appraisal and market rent studies to determine values for the various
    types of uses we authorize.
        Question. The agency's performance indicator for wilderness
    management is miles of trail available. This indicator does not speak
    to a measure for the amount of use by the public. What is the history
    of wilderness use over the past 5 years? What is the increase in number
    of wilderness areas created and managed over the past 5 years? As the
    average age of the US population increases, is wilderness use
    declining? How are the 26,610 miles of trail categorized in terms type
    of trail? Some wilderness philosophy speaks to eliminating many trails
    within Wilderness to make the areas even more primitive. Is the agency
    affected by this philosophy in terms of a standard for ``miles of trail
    available?''
        Answer. Wilderness use over last 5 years increased about 9 percent,
    from 13,272 Recreation Visitor Days (RVDs) in fiscal year 1992 to
    14,512 RVDs in fiscal year 1996. Wilderness use appears to be
    maintaining a reasonably constant, to slightly increasing, level.
    Wilderness use is not declining as a result of an increase in average
    age of the population; instead, wilderness visitors are becoming more
    reflective of the diverse American public. Studies conducted by the
    Aldo Leopold Wilderness Research Institute from 1972 through 1991 note
    the following changes in wilderness visitors: wilderness visitors today
    tend to be older than those who used wilderness in the past, there is a
    higher percentage of women using wilderness, the educational level of
    wilderness users is higher than in the past, and although racial
    minorities are still not well represented among wilderness users, this
    user segment continues to grow (Cole, Watson, Roggenbuck, 1995).
        From 1991 through 1995, 17 wildernesses were designated on National
    Forest System lands. This added 944,882 acres to the National
    Wilderness Preservation System, and increased the acreage of wilderness
    managed by the Forest Service by approximately 3 percent. While these
    areas are certainly worthy additions to the National Wilderness
    Preservation System, the change in total wilderness areas and acres
    managed by the Forest Service does not seem a viable indicator of
    management performance. The job is not to create or encourage new
    wildernesses, but to appropriately steward those lands under our
    administration.
        As displayed in the budget, the 26,610 miles of trail are miles
    available within wilderness, in addition to 87,466 miles available
    outside of wilderness. The Forest Service does not have a national
    objective of the trail program to eliminate trails within wilderness to
    make the areas more primitive. Instead, trail densities and travel
    planning in wilderness are determined, with public participation, by
    resource protection and wilderness use objectives. The Forest Service
    is currently developing wilderness performance measures in the
    following areas: ecological integrity, wilderness values, public use,
    and special provisions and administration.
        Question. The agency cites an increase in use of concessionaires by
    70 percent over the past decade. What affect will this amount of
    recreation concessionaires have on the Recreation Fee Demonstration
    program? How will potential receipts by affected?
        Answer. Concessionaires will continue to play a significant role in
    the delivery of national forest recreation services. The existing
    concession program will not have a significant impact on the recreation
    fee demonstration program or potential receipts. The fee demonstration
    program encompasses only 100 projects across the entire National Forest
    System. More than enough project diversity exists to let the Fee Demo
    test a wide range of projects. Many of the projects consist of
    developed sites that are not concession managed. The test should enable
    the Agency to make a better estimate of fee potential from all sites.
        As the Agency has implemented the fee demo, firm emphasis has been
    placed on the value of collaboratively working on demonstration project
    proposals with concessionaires as these projects can have an affect on
    the concessions business. With a significant part of the recreation
    opportunities on national forest land being carried out by cooperators,
    it is vital that we work closely with them. These cooperators not only
    provide direct services to our customers, maintain sites under permit,
    but as private businesses they also return millions of dollars into
    local rural economies.
        Flaming Gorge NRA is an example of this collaboration. In the NRA
    more than 24 permit holders and the Forest Service collectively carry
    out the extensive level of customer services which occur at this high
    use site. By focusing on collaborative relationships, the NRA has
    successfully implemented a fee demo project with full support of every
    permittee--critical support in that these permittees serve common
    customers, return benefits to local economies, and have political
    representation.
        In summary the Forest Service is managing both these contemporary
    tools--concessions and the fee demo--to compliment one another.
    However, these are the types of issues that the fee demo test will
    provide valuable information on.
        Question. The Recreation Fee Demo project allows use of collections
    to perform recreation facility reconstruction and construction. To what
    degree will such collections be utilized for this purpose? What has the
    public's reaction been to the use of funds for this purpose?
        Answer. The Agency has a vast array of projects operating under the
    fee demo. Some are small, others are very large. Many focus on direct
    customer services and facility enhancements--with a focus on repair and
    reconstruction of old run down facilities. However, due to the
    relatively short implementation period to date, few actual
    reconstruction projects have started. In many cases, clean up
    activities, painting, and cleaner restrooms are examples of immediate
    actions the demo projects are doing to show fee paying customers a
    quick benefit.
        Each demonstration project has a business plan that includes a
    priority list of needs--how, where, and when expected fee revenue will
    be used for specific tasks. Also, every project has a communication
    plan, outlining each step needed to keep their customers informed,
    reach community acceptance, and help keep Congress informed of these
    items.
        To-date the Agency is experiencing a high level of community
    acceptance of projects and new fees. We feel our extensive efforts to
    communicate and educate our customers has been critical to the success
    of the program.
        Question. The fee demonstration program was implemented with a 3
    year test period and extended for 1 year. Are projects being brought on
    line as scheduled? What projects, if any, that were originally planned
    for recreation fee demonstration may not be brought into the program
    due to delays?
        Answer. Most projects are coming on line very close to projected
    start dates. Two have been dropped--one due to liability concerns
    associated with charging a fee in an area with known fatalities (Rim
    Lakes,--Apache-Sitgraves N.F.--Ariz) and one because the Poudre River
    Complex--Arapahoe-Roosevelt N.F., Colorado, decided to concession
    instead. Some projects have been delayed due to major proposal
    modifications based on public feedback. We expect to have 40 projects
    from the first 50 collecting fees by July 1, 1997. The others plan to
    come on line later in fiscal year 1997 or early in fiscal year 1998.
    The Regions are currently submitting proposals for the next 50 projects
    and we expect that some of these will also be ready to come on line in
    fiscal year 1997, and early fiscal year 1998.
        Question. The recreation fee demonstration project will involve the
    collection of significant sums of money in several areas. What plans
    has the agency made to protect these funds from theft? What plans have
    been made to protect the safety of employees making these collections?
        Answer. The Forest Service has been collecting fees in developed
    sites for many years. Existing Agency fiscal requirements for handling
    money will continue to be applied to the Fee Demo projects. Theft and
    employee protection are included in current procedures. Employee safety
    will not be jeopardized. In some projects, the volumes of cash
    collections are significantly larger than the Agency has experienced in
    those locations in the past. We are beginning to explore the use of new
    avenues for payment with the use of credit cards /debit payments etc.
    Developing innovative solutions to address the increased volume and new
    processes are also part of the test. Some of the areas being explored
    include: increased use of credit cards and vendor sales to reduce cash
    handling, armored car services for cash transfer, automated vending
    machine pass purchase, audit and accountability guidelines for these
    new tools/processes, and increased law enforcement coordination.
        Question. How are payments of fees being enforced at demonstration
    sites? What actions are being taken with individuals who refuse to or
    who are uncooperative in paying fees?
        Answer. Local compliance programs are being established for each
    Fee Demo project. Most units are taking a light handed approach to fee
    compliance during the start up phase. ``Fix-It Tickets'' are being used
    in some places--buy your pass and no fine is assessed. A high level of
    compliance is critical to the success of the fee Demo program. If a
    significant number of visitors do not pay, visitors that do pay will
    not be pleased. During start-up activities at all sites, widespread
    communication, education and signage will be the focus. As a last
    resort, the law gives each Agency the authority to issue tickets with a
    fine of up to $100.
        Question. A recent news article (Oregonian, 3/22/97) spoke of a fee
    structure at the Mt. St. Helens Visitor Centers, which only allows for
    a multi-day pass as opposed to a single day pass. How are fee
    structures established at local fee sites? Is maximum flexibility being
    offered to the public for both short and extended stays?
        Answer. The intent of the fee demo pilot is to test various fee
    methods and public reaction and acceptance. Each project can experiment
    with various fee levels and procedures. Short and long term stays are
    addressed in most areas by having a short stay pass of some sort--one
    to seven days seems to be the range, and annual passes.
        At Mt. St. Helens, we are experimenting with a Monument Pass.
    Originally this Monument Pass was only good for one day. Based upon
    information received during the public collaborative process, the
    Monument decided that this Monument Pass would be good for an
    additional two days at no extra cost. This is consistent with other
    business approaches around the Nation. Disneyland is advertising the
    same concept. When you purchase the pass it will get you in the extra
    days for free, thereby giving them more value to the pass.
        Question. What are some examples of ``showcase'' accessibility
    projects and what types of facilities were these projects developed
    for? What is the cost of these accessibility projects by type? What
    type of cooperative contributions in terms of services or funds can be
    directly related to accessibility projects?
        Answer. The Agency has completed a number of award winning efforts
    in the field of Universal Access, having pioneered guidelines for
    outdoor recreation environments. The focus of this effort was to insure
    that outdoor recreation environments and activities are designed and
    carried out in a manner which is responsive to a diverse country,
    responsive to all ages, abilities, and cultures. At the same time,
    respecting the outdoor environment, and not taking away from this
    diverse user group the adventure, challenge, and enjoyment found in a
    spectrum of outdoor settings. This award winning effort was co-authored
    by the Forest Service and published in the book ``Universal Access To
    Outdoor Recreation: A Design Guide.'' This publication now serves as
    the standard in the federal government and throughout the recreation
    industry for design of outdoor sites, facilities and services. This
    effort itself was completed through partnerships, saving the taxpayer
    about a quarter of a million dollars.
        Similar cooperative projects have been completed in partnership
    with our private service providers, assisting them to develop
    guidelines for their service areas. These products include: Universal
    Access to Outfitting and Guide Services; Universal Access to Ski Areas;
    Universal Access Trail Evaluations; Universal Access to Wildernesses,
    Balancing The American's With Disabilities Act with the 1964 Wilderness
    Act.
        These products have guided the design of new, and the
    reconstruction of existing facilities, and have shaped direction with
    cooperator permits.
        Showcase examples are best found at new installations such as the
    El Portal Visitor Center in Puerto Rico and the South East Visitor
    Center in Ketchican Alaska, where integration of Universal Access is
    simply a way of doing business and at no cost increase, in that it is
    part of the design for the facility. Other examples include sites which
    require retrofitting. This can be costly when replacing facilities.
    However, this can be combined with other reconstruction plans to
    resolve health and safety issues. Examples can be found at areas across
    the country where existing developed recreation facilities are being
    upgraded. While these upgraded facilities may themselves not stand out
    as stellar, to a youngster, parent, or adult who in the past could not
    participate in outdoor recreation activities because basic facilities
    such as restrooms were unavailable, these modest site reconstruction
    activities are indeed life changing and stellar!
        Much of the work getting done locally is through partnerships,
    agreements, by volunteers, and through concessionaire site
    reinvestments. Also, some of the identified projects to be enhanced
    through the Recreation Fee Demonstration Program address accessibility
    items. We do not track costs separately for accessibility
    modifications, and these changes are seldom done alone. It is a part of
    the cost of the entire reconstruction project.
                   wildlife and fisheries habitat management
    Threatened and endangered species
        Threatened and endangered species programs continue to be critical
    to the agency's mission, but controversial and challenging. The
    administration is requesting a $5.5 million increase in this program.
        Question. The agency budget justification speaks to
    ``prioritizing'' candidate plant, wildlife, and aquatic species and
    habitats. Based on agency knowledge of this process, what additional
    plants or animals may potentially be listed as threatened or endangered
    which could have a significant effect on agency programs similar to
    Northern/Western Spotted Owls, Marbled Murellet, etc.?
        Answer. There are 47 species proposed for listing as threatened or
    endangered under the Endangered Species Act that have habitat on
    national forests and grasslands. Twenty-seven of these are plants, most
    with narrow ranges. There are an additional 182 Candidate species for
    which the Forest Service is evaluating the distribution on national
    forest system lands. Species with the most potential to be impacted by
    our management activities such as mineral extraction, timber harvest,
    grazing, or recreation are wide-ranging aquatic species. The proposed
    or candidate species that currently are of greatest concern are the
    bull trout and certain stocks of inland cutthroat trout and chinook
    salmon.
        Question. Are there species of plants or animals [sic] could soon
    be ``de-listed'' which could also have an effect on agency programs?
        Answer. Two species which are moving toward delisting in all or
    part of their ranges are the peregrine falcon and grizzly bear. Several
    plant species have been delisted. After de-listing, the Forest Service
    and the listing agency continue with identified conservation
    responsibilities. Monitoring is required for 5 years following de-
    listing. Additionally, close cooperation with the responsible State
    agencies is crucial after de-listing to assure that conservation is
    being achieved. Impacts to the agency will come to a large extent
    through a reduction in the amount of time and effort spent on
    procedural compliance associated with section 7 consultation.
        Question. On March 19 the Supreme Court issued a ruling that people
    whose economic interests are affected by the Endangered Species Act can
    bring suit against the government to stop implementation of actions to
    protect species or plants. How might this ruling affect some agency
    accomplishments, operations, and budget allocations in fiscal year
    1998?
        Answer. There is no way to accurately project the impact of this
    ruling on agency accomplishments, operations, and budget allocations in
    fiscal year 1998. Additional litigation may result, which carries a
    burden of expenses associated with technical support to legal staff as
    well as potential delay of projects associated with conservation of
    species.
               anadromous and inland fisheries habitat management
        A budget increase of $3.9 million is requested for these programs.
        Question. The agency budget justification speaks to emphasis in
    Region 10. What are the principle habitat restoration projects planned
    throughout the Forest Service for these funds? (i.e., increase of $3.9
    million within the anadromous and inland fisheries habitat management
    expanded budget line items.)
        Answer. The increase in funding will be targeted at increasing
    opportunities for public use and enjoyment of inland and anadromous
    fisheries resources. This will be accomplished through habitat
    restoration and enhancement that increases the number of fish national
    forest streams and lakes can produce, and through improvements of
    angler access, fish viewing, and interpretation opportunities. Specific
    examples include:
      --construction of fishways at salmon migration barriers;
      --construction of dams to create fish ponds/reservoirs;
      --liming and/or fertilization of lakes to increase productivity;
      --removing or stocking fish in cooperation with states;
      --construction of fishing docks/piers and boat launches;
      --installation of interpretive signs and viewing areas; and
      --hosting of National Fishing Week and other aquatic education
            events.
        The majority of the increase ($2.4 million) is within the inland
    fish habitat management expanded budget line item. Inland fish habitats
    support 90 percent of the 36.5 million days of angler effort on
    National Forest System lands each year. Use of inland fish resources on
    the national forests and grasslands generates about $1.6 billion and
    provides 57,000 jobs. Additional inland fish angling opportunities can
    be provided at a cost of $1-10 per angler visit, while generating local
    economic benefits of about $50 per angler visit.
        The smaller increase ($1.5 million) within the anadromous fish
    habitat management expanded budget line item will primarily be directed
    to Alaska and Great Lake states where cost effective opportunities
    exist to increase recreational, commercial, and subsistence fishing
    opportunities. Although some of the increase will be directed to other
    geographic areas, programs are primarily focused on restoration and
    recovery of imperiled salmon stocks.
        Question. What specific results can be expected from this increase
    in terms of habitat restoration?
        Answer. We estimate that the increase in appropriations will result
    in restoration of: (1) more than 100 miles of inland fish stream
    habitat; (2) about 900 acres of inland fish lake habitat; and (3)
    nearly 100 miles of anadromous fish stream habitat.
        Question. How has agency involvement in National Fishing Week
    changed since the program began?
        Answer. The Forest Service has historically led all Federal
    agencies in the number of events hosted during National Fishing Week.
    The program is immensely popular with the public we serve and provides
    a unique forum to: convey a message about the importance of ensuring
    the health and productivity of streams and lakes; share our commitment
    to increasing recreational fishing opportunities; instill a shared
    sense of ownership and responsibility for management of public waters;
    and to build and strengthen partnerships.
        In 1996, the agency and its partners hosted about 321 events that
    were attended by nearly 64,295 people. This represents a slight
    decrease in the number of events hosted, however, while the number of
    participants continues to increase. The decrease in number of events
    hosted is directly related to the decrease in inland and anadromous
    fish appropriations.
                              rangeland management
        The agency received an increase of $6.5 million from fiscal year
    1996 to fiscal year 1997. It is requesting an increase of $7 million in
    fiscal year 1998.
        Question. According to agency explanatory notes for fiscal year
    1997 and fiscal year 1998 there was no change in grazing lands
    considered to be in unsatisfactory condition or in need of further
    analysis (23.5 million acres). Agency budget requests stated that
    increased funds will be used primarily for NEPA evaluation and
    implementation which could be expected to better quantify rangelands in
    unsatisfactory condition. Why has there been no change in this
    classification? What percent of allotments were evaluated in fiscal
    year 1997? With the agency's stated intent to complete the allotment
    evaluation of 2,516 allotments by the end of fiscal year 1998, what can
    the Committee realistically expect regarding funding requests in fiscal
    year 1999 and beyond for the rangeland management appropriation?
        Answer. When the agency's fiscal year 1998 Explanatory Notes were
    prepared the final report on status of National Forest System (NFS)
    rangelands was not complete. The previous year's data were incorporated
    with the intent of substituting current data before final publication.
    Due to an oversight the 1996 data were not inserted into the final
    document. The 1996 data show that 7.8 million acres are not meeting or
    moving towards forest plan objectives and 13.5 million acres need
    further evaluation to determine status, bringing the aggregate to 21.3
    million acres. This is a decrease of 2.2 million acres in these
    categories from 1995. Acreage figures for 1997 will not be available
    until late this fall.
        It is estimated that NEPA analyses will be completed on 805 grazing
    allotments in fiscal year 1997. This represents 32 percent of the 2,516
    analyses scheduled for analysis in Fiscal years 1996-98. NEPA analysis
    were completed on 581 allotments in fiscal year 1996. The sum of fiscal
    year 1996 analyses completed and fiscal year 1997 analyses projected is
    1386, leaving 1,130 analyses to complete in fiscal year 1998 to meet
    the fiscal years 1996-98 objective. The agency will make it's best
    effort to accomplish this task. Several factors will affect the number
    of analyses the agency completes in fiscal year 1998 and future years.
    As analyses are completed more funds are required for implementing
    decisions and conducting project level administration and effectiveness
    monitoring. Increasing complexity of issues is driving up the cost of
    some analyses and ultimately the cost of project implementation, issue
    mitigation, administration and monitoring. If the range budget remains
    stable in fiscal year 1998 and beyond, annual accomplishment of NEPA
    analyses will steadily decrease but acres of rangeland reported in
    satisfactory condition would increase as implementation proceeds.
        It is apparent that the Forest Service will have difficulty meeting
    the first 3 year benchmark of 2,516 NEPA analyses at the requested
    level. More funds must be directed towards implementation,
    administration and effectiveness monitoring as NEPA analyses are
    completed. The Committee can anticipate continued requests for
    additional range management funding until the program provides adequate
    resources to balance resource stewardship and compliance with
    environmental laws.
                             forestland management
        The Administration has requested an increase of $18 million in the
    Forestland Management Program. The timber sale volume to be offered
    will decline by 400 million board feet.
        Question. The Administration requested $14.6 million more for
    timber sales management, than the agency requested. For what specific
    functions will this $14.6 million be used? What specific
    accomplishments will occur?
        Answer. The original request from the agency did not provide for
    full implementation of the President's Plan for the PNW. The additional
    $14.6 million is for funding the President's Plan for the Pacific
    Northwest. fiscal year 1997 was the first year of full implementation
    of the PNW Plan. The additional funding for fiscal year 1998 is to: 1)
    fund the additional harvest administration resulting from meeting the
    volume levels in fiscal year 1997; 2) sustain the full implementation
    level; and 3) reflect the actual cost of meeting requirements of the
    PNW Plan. fiscal year 1997 is the first year that we will meet the
    probable sale quantity (PSQ), and we are now able to determine the
    actual cost of meeting the plan.
        Rather than reduce the fiscal year 1998 agency requested
    allocations to regions and forests not covered by the PNW Plan, the
    Administration chose to maintain those levels and to request an
    additional $14.6 million to fully implement the PNW Plan.
        The additional $14.6 million will provide an additional 140 million
    board feet of timber offered for sale from forests covered by the
    President's Plan for the PNW.
        Question. The Administration increased timber sales management
    funds by $14.6 million, and salvage funds by $3.0 million over the
    agency request. However it reduced the agency's request for road
    construction funds by 19.2 million, and reduced the agency road
    maintenance request by 7.7 million. In light of this action, how will
    the agency modify it's planned timber program to meet it's timber sale
    target?
        Answer. Funds for timber roads are adequate to administer road work
    on existing sales and to prepare surveys and designs for the green sale
    program of 2.5 BBF in fiscal year 1998. The shift of funds from road
    construction made by the Administration to balance competing resource
    priorities will affect our ability to conduct engineering support in
    planning for the transportation needs for future timber sales beyond
    fiscal year 1998.
        The roads support for salvage sales is funded from salvage sale
    funds, thus that program is not affected by the reduction of road
    funds.
        The reduction in road maintenance funding will not affect the
    timber program, but will reduce our ability to manage and maintain the
    permanent road system.
        Question. The agency has a timber sell target of 4.18 billion board
    feet in fiscal year 1997. Is this volume actually selling? Please
    provide a comparison of the volume offered to the volume sold for
    fiscal years 1994-96.
        Answer. The timber volume of 4.18 billion board feet for fiscal
    year 1997 is actually our planned volume to be offered for sale given
    the available funding. The intent of the Forest Service is to sell all
    the volume that is offered. However, market conditions influence
    whether people are willing to purchase all timber sales. About 13
    percent of the volume offered over the last three fiscal years was not
    sold. The following table shows each fiscal year.

                                  TIMBER VOLUME
                         [Volume in billion board feet]
    ------------------------------------------------------------------------
                                                   Fiscal year--
                                      --------------------------------------
                                           1994         1995         1996
    ------------------------------------------------------------------------
    Volume offered...................         3.41         4.01         4.02
    Volume sold in year of offer.....         2.56         2.49         2.45
    Volume sold following fiscal year          .40          .81      \1\ .78
    Long-term contract volume
     released \2\....................          .18          .14          .19
                                      --------------------------------------
          Total sold/released........         3.14         3.44         3.42
    Volume not sold..................          .27          .57          .60
    Percent of offer not sold........            8           14           15
    ------------------------------------------------------------------------
    \1\ Through March 31, 1997.
    \2\ Volume released from long-term contracts in region 10 is not counted
      toward sold volume since this volume was previously recorded as sold
      in the 1950's when the contracts were initiated.

        Question. The Independent Forest Products Association states that
    the proportional amount of sawtimber sold as a percentage of total
    timber sold, is decreasing substantially. What percent, for the past 5
    years of the total volume accomplishment, has been from saw timber and
    what percent has been from other products? Please be specific regarding
    the other products.
        Answer. The table below provides our data related to this question,
    which comes from the Automated Timber Sale Accounting System. As can be
    seen, there has been no substantial decline in the proportion of
    sawtimber versus the total volume sold over the past 5 years. Other
    products, besides sawtimber, that are sold include the categories of
    pulpwood, poles, pilings, posts, fuelwood, excelsior wood, cooperage
    bolts, miscellaneous, and cull logs. The highest volume categories of
    other products are provided in the table.

                                       HIGHEST VOLUME CATEGORIES OF OTHER PRODUCTS
                                                  [All volumes in MMBF]
    ----------------------------------------------------------------------------------------------------------------
                                                  Volume sold                       Other products volume sold
                                             ---------------------  Percent  ---------------------------------------
                   Fiscal year                                     sawtimber                                   All
                                              Sawtimber    Total              Pulpwood  Fuelwood    Cull      other
    ----------------------------------------------------------------------------------------------------------------
    1992....................................      2,688     4,458       60.3     1,134       381       108       147
    1993....................................      2,672     4,515       59.2     1,108       445        80       210
    1994....................................      1,578     3,056       51.6       936       343        49       150
    1995....................................      1,448     2,885       50.2       877       303        39       218
    1996....................................      1,943     3,384       57.4       746       247        33       415
    ----------------------------------------------------------------------------------------------------------------

        Question. What is the status of implementation of the General
    Accounting Office recommendations regarding timber theft prevention?
        Answer. It was the Office of Inspector General of the Department of
    Agriculture that conducted a review of timber theft problems in the
    National Forests. The recommendations of the audit have been
    implemented and the Office of Inspector General has closed the audit.
        Question. The agency operates a total of 11 nurseries which are
    funded through the working capital fund. With the combined production
    of seedlings declining by 38 percent, how have the costs of maintaining
    these nurseries been affected?
        Answer. As Working Capital Fund (WCF) facilities, Forest Service
    nurseries must annually establish a selling price for seedlings that
    covers the production costs associated with growing the seedlings.
    Declining production levels at Forest Service nurseries have resulted
    in higher seedling costs because the fixed costs of running these
    facilities must be absorbed by a reduced level of seedling orders. Any
    cost increases are ultimately borne by the customer in the price they
    pay for the seedlings grown at these facilities. Because of this,
    Forest Service nursery managers work hard to hold the line on selling
    price increases. In recent years they have been doing this by reducing
    personnel at these facilities and by seeking ways to increase the
    efficiency of their operations. These efforts have helped to keep cost
    increases to a minimum. For example, the J. Herbert Stone Nursery
    charged $185 per thousand for 2-0 bareroot conifer seedlings in fiscal
    year 1994. This selling price increased to $186 per thousand in fiscal
    year 1995, and rose to $198 per thousand in fiscal year 1996. This
    equates to a 7 percent rise in selling prices despite a decline in
    seedling production of roughly 47 percent (from 21.2 million seedlings
    in fiscal year 1994 to 11.3 million seedlings in fiscal year 1996).
    Despite the decrease in production, the nursery managed to cover
    production costs without pricing itself out of the market.
        The Agency is committed to maintaining cost-efficient nursery
    operations. In December, 1995, following a careful analysis of
    anticipated future seedling orders at 7 Forest Service nurseries in the
    Western U.S., the decision was made to close 3 of these facilities by
    the year 2000. We believe that this action, coupled with other measures
    to maintain cost-effective nursery operations, will provide for a
    National Forest Nursery System that is well-tailored to meet resource
    management needs for the foreseeable future.
        Question. The agency states that combined production of bareroot
    seedlings and containerized stock will be reduced by 38 percent from
    fiscal year 1997 to fiscal year 1998 primarily due to the reduced
    timber program. In order to reduce operating costs and fully utilize
    nursery capacity, can cooperative work with states and private
    operators result in improved reforestation on state, private, and local
    government lands?
        Answer. Yes, we believe it can. The Granger-Thye Act of 1950
    provides for the sale of forest-tree seed and nursery stock to States
    and political subdivisions in each State. This Act prohibits the sale
    or exchange to these entities of ornamental or other stock for
    landscape planting of types commonly grown by established commercial
    nurseries. To varying degrees, all of our nurseries are working with
    other Federal and State agencies to more fully utilize nursery capacity
    and to provide for the growing stock needed by other governmental
    entities. In fiscal year 1996, Forest Service nurseries produced about
    4.8 million bareroot seedlings for other agencies, representing about 8
    percent of all bareroot production nationally. The percentage of
    seedling orders grown for other agencies in relation to total seedling
    production has risen over the past few years at most Forest Service
    nurseries.
        Question. Does the Forest Service mutually cooperate with State
    Foresters in the use of respective nurseries for the growth of planting
    stock? If so, what is the number of nurseries and the amount of funds
    involved in cooperative efforts?
        Answer. The Forest Service cooperates with State Foresters and U.S.
    Territorial forestry agencies mainly by providing technical and
    financial assistance through its State & Private Forestry (S&PF)
    programs. Funding for the S&PF Seedling, Nursery, and Tree Improvement
    Program totalled $2.659 million in fiscal year 1997. These funds were
    used to provide technical and financial assistance to 69 State and 4
    Territorial nurseries which produced 396 million seedlings in 1995 (the
    most recent year national data is available). Additional technical
    assistance to these nurseries was provided by the Forest Service's
    National Tree Seed Laboratory in Macon, Georgia. The Laboratory
    provides seed-testing services, serves as a seed bank for national and
    international research needs, and provides technical information and
    training on all aspects of forest tree and shrub seed harvesting and
    utilization. Funding for the National Tree Seed Laboratory was $263,000
    in fiscal year 1997.
        State nurseries sell only small amounts of seedlings to the Forest
    Service. Many State nurseries are prohibited from submitting bids on
    these contracts by State statutory or regulatory requirements. Market
    conditions also play a factor. Many State nurseries have recently been
    operating at or near full capacity to supply seedlings for non-Federal
    customers.
        Question. The Congressional Budget Office estimates that
    eliminating deficit timber sales would save $185 million in federal
    funds over a 5-year period. The General Accounting Office states that
    deficit timber sales occur in 3 of 9 regions. Based on the GAO
    methodology, what would be the impacts of eliminating timber sales that
    fail to produce income in excess of preparation costs.
        Answer. The study we believe is being referred to in the question
    is the 1995 GAO Report entitled ``Forest Service--Distribution of
    Timber Sale Receipts fiscal years 1992-94.'' That study had a very
    specific objective, namely to compare the costs of sale preparation
    with the sale revenues returned to the General Fund of the U.S.
    Treasury. Consistent with this goal, in determining when a deficit
    situation existed, the study did not count as income either purchaser
    road credits, or purchaser deposits for such things as reforestation,
    road maintenance, and brush disposal. According to the figures in that
    study, only about 10 percent of all National Forest timber sale
    receipts ultimately end up in the General Fund--the other 90 percent
    are either not received in the form of cash (e.g., purchaser road
    credits), or goes into some special Congressionally authorized account
    (e.g., the K-V and NFS funds). The Forest Service has not based the
    benefits of selling National Forest System timber soley on revenues
    returned to the U.S. treasury. Some important reasons why are:
        National forest timber sales are not only a means of producing
    fiber to help meet the nation's demand for wood, they are also an
    important tool for managing national forest ecosystems. It is vital to
    recognize that national forest timber is sold and harvested for
    essentially three reasons:
        1. To help meet the nation's demand for wood, thereby reducing
    pressures on private forest lands and the need for foreign imports.
    Sales made primarily for this purpose are called ``timber purpose''
    sales.
        2. To help achieve non-timber management objectives that require
    manipulating the existing vegetation--e.g., reducing forest fuels,
    improving forest health, and creating habitat desired by certain
    species of wildlife. Sales made primarily for this purpose are called
    ``forest stewardship'' sales.
        3. To provide fuelwood, posts, Christmas trees, and other forest
    products to individuals for their own use. Sales made primarily for
    this purpose are called ``personal use'' sales.
        Most below-cost timber sales fall into the last two of the
    preceding categories. Accordingly, one important effect of eliminating
    such sales is that we would greatly compromise our ability to use
    timber sales as a tool for achieving various land stewardship goals.
    This would almost certainly be detrimental for the Federal Treasury as
    well. Often the net costs (i.e., revenues--expenditures) associated
    with using other treatment options (e.g., prescribed burning, use of
    chemical herbicides, or cut and leave) are greater than those
    associated with using a timber sale because these other options do not
    generate any revenue to help offset the costs of their application.
        National forest timber sales are important to the economies of many
    local communities, especially in the western U.S. The latest Timber
    Sale Program Annual Report (i.e., TSPIRS Report) shows that between
    fiscal year 1991 and fiscal year 1995, the number of jobs supported by
    the harvesting and processing of national forest timber dropped by 38
    percent--from 103,151 jobs to 63,623 jobs. During this same period, the
    timber sale program's estimated contributions to regional income and
    federal tax receipts also fell--in these instances by 58 percent.
    Specifically, regional income is estimated to have dropped from $5.3 to
    $2.2 billion, and federal tax revenues from $749.4 to $336.8 million.
    To some degree these economic impacts have undoubtedly been offset by
    increased harvesting from private forest lands, but to the extent that
    this has occurred--most of the beneficiaries are in the South, not in
    the West. Eliminating deficit timber sales will only compound the
    economic and social hardships that now confront many rural western
    communities.
        National forest timber cannot always be priced at a level high
    enough to cover the agency's costs of production. The Forest Service,
    as a matter of law and policy, assumes many costs not incurred by
    private timber producers: adhering to stricter regulations for
    environmental assessment and analysis; involving the public in sale
    planning and allowing for administrative appeals. At the same time,
    however, we sell our timber in an open market where most purchasers
    have a choice of buying either from public or private sources. So,
    should we decide that national forest system must be priced to fully
    cover production costs, the result will be that we price ourselves out
    of the market. This could result in paying higher costs to manage
    timber stands for stewardship objectives than we would spend using
    timber harvest as a management tool.
        Question. What is the current status of pipeline timber sale
    volume? How much volume planned for sale in fiscal year 1998 is
    currently completed through the NEPA process? Is the overall status of
    the pipeline sufficient to assure accomplishment of the future planned
    timber sale program?
        Answer. As of March 31, 1997, there is approximately 1.3 billion
    board feet of timber sale volume prepared through the NEPA process for
    future years. NEPA documentation has been completed on 800 million
    board feet of timber volume for the fiscal year 1998 timber sales
    program. The agency goal in timber sale pipeline is to have about 70
    percent of NEPA work completed and a substantial amount of the field
    layout completed for the fiscal year at the start of the fiscal year.
    This would require having about 2.7 billion board feet through NEPA at
    the start of fiscal year 1998. Currently about 30 percent of the
    desired pipeline volume for fiscal year 1998 sales is through NEPA.
        Question. Many ``other'' forest products are sold by the Forest
    Service. These include mushrooms, bear grass, mosses, etc. What is the
    value of these products in terms of income for the past 5 years? Do
    sales of these products affect timber volume offered targets?
        Answer. The following table displays the total value of
    miscellaneous non-convertible forest products and Christmas trees. Non-
    convertible forest products represent such items as; mushrooms,
    transplants, vines, pine straw bear grass, mosses, and many others. It
    does not include products that can be converted to a volume estimate
    such as, fuelwood, posts, poles.

    Value of miscellaneous nonconvertible forest products and Christmas
    trees

    Fiscal year:                                                In thousands
        1996......................................................  $3,261.8
        1995......................................................   2,935.1
        1994......................................................   3,138.3
        1993......................................................   2,791.4
        1992......................................................   2,423.0
                        --------------------------------------------------------------
                        ____________________________________________________

          Total...................................................  14,549.6

        As a whole, these special forest products are a
    considerable business in many locales. The sales of these
    products do not directly affect the timber volume offered.
    However, the cost associated with administering this business
    is included in the timber sales management line item.
        Question. In recent years a significant number of highly
    qualified and seasoned timber sale administrators left the
    agency. What has been done to replace these needed skills? In
    some regions of the country, this critical task is performed by
    employees with temporary appointments. Has FTE ceiling
    prohibited the permanent placement of employees in timber sale
    administration functions?
        Answer. The Forest Service has lost many skilled sale
    administrators as a result of the decrease in the size of the
    timber sale program and through downsizing the overall
    workforce. In many cases, people with less experience have
    taken over these responsibilities. Forests and regions have
    increased the training programs for sale administrators to
    assure people administering sales have the skills they need.
    Depending on what happens to the size of the sale program, we
    could face a problem in the future with having enough trained
    and experienced people to carry out the program. At this point,
    the budget is the driving force, not FTE ceilings, in limiting
    the size of the sale administration staffs.

          liability for suspended and cancelled timber sale contracts

        The Forest Service has incurred considerable liability for
    timber sale contracts which have been suspended or cancelled
    because of threatened or endangered species. Two instruments
    are available that would limit the Forest Service's future
    liability for timber sale contracts that need to be suspended
    or cancelled because of threatened or endangered species--(1)
    regulations which state the settlement timber purchasers' are
    entitled to when a timber sale contract is suspended or
    cancelled because of threatened or endangered species and (2) a
    new timber sale contract that specifies settlement in these
    situations and provides the Forest Service more flexibility to
    modify contracts and delete timber areas affected by threatened
    or endangered species. Since the late 1980's, the Forest
    Service has been working on revising these two instruments, yet
    work is still incomplete.
        Question. Does the Forest Service intend to publish
    proposed regulations on the settlement that will be provided
    when timber sale contracts are suspended or cancelled because
    of threatened or endangered species? If so, when?
        Answer. The Forest Service published a proposed rule
    concerning contract cancellations on December 30, 1996. The
    comment period ended on February 13. Presently, the comments
    are being analyzed to determine what the final rule might be.
        Question. Does the Forest Service have a plan to issue for
    public comment a revised timber sale contract? If so, when?
        Answer. The Forest Service plans on publishing a proposed
    contract for public comment this coming summer. Presently, the
    proposal is being reviewed by OMB.

                              timber salvage sales

        The salvage program will involve the preparation of 1.3
    billion board feet, as part of the overall timber offer target
    of 3.8 billion.
        Question. The report titled ``Interagency Salvage Program
    Review'' discussed collaborative efforts by the Forest Service,
    Bureau of Land Management, National Marine Fisheries Service,
    Environmental Protection Agency, and the Fish and Wildlife
    Service relative to accomplishments under the Rescissions Act.
    The report found the definition of salvage was not clearly
    defined and that in the case of the Forest Service, there was a
    tendency to broadly label sales as salvage in order to capture
    funds for forest-health related activities. The report
    recommendations state that the Forest Service and BLM should
    establish an interagency group to define salvage for use
    following the Rescissions Act. What is the status of this
    recommendation? What potential effect could this initiative
    have on the current definition of salvage as used by the Forest
    Service today?
        The report also addressed the need for continued
    collaboration between agencies as the cumbersome timber sale
    planning and preparation effort proceeds. What efforts will the
    Forest Service make to assure such collaboration in the future
    with expiration of mandates such as the Rescissions Act?
        Answer. The interagency team has developed a draft action
    plan associated with the review report you cite, and the
    agencies are currently evaluating the draft action items. With
    respect to the salvage definition, there have been various
    options developed in association with the proposed Forest
    Ecosystem Restoration and Maintenance (FERM) fund. Those
    options range from using the current definition to one which
    would only include dead or dying trees. Any change in the
    definition or the way it is applied and/or any limitations
    applied to the salvage sale fund will have a direct effect on
    the amount of salvage volume sold. The primary objectives of
    reviewing the salvage definition, as outlined in the review
    report, are to ``* * * ensure that the intent of projects will
    be clearly articulated to the public * * *'' and to ``* * *
    consider criteria for identifying salvage situations where
    there is a need to expedite the sale preparation process''
    (page 17). The agencies are continuing to evaluate the
    definition options and work towards implementation of this
    recommendation.
        The Rescissions Act itself did not mandate interagency
    collaboration. The collaborative processes were established
    through the Administration's Interagency Memorandum of
    Agreement (MOA) in response to the requirements of the Act. In
    fact, the interagency processes of early collaborative
    involvement used in the MOA were initially implemented under
    the Pacific Northwest Forest Plan and were well underway before
    the passage of the Act. The MOA helped to expand interagency
    collaboration beyond the Pacific Northwest. The Forest Service
    and its sister agencies are continuing to refine these ongoing
    processes to assure efficient and effective project planning.
        The report also addressed the need for continued
    collaboration between agencies as the cumbersome timber sale
    planning and preparation effort proceeds. What efforts will the
    Forest Service make to assure such collaboration in the future
    with expiration of mandates such as the Rescission Act?
        Question. The GAO report (GAO/RCED-97-53) on salvage sale
    accomplishments under the Rescissions Act, states that the
    agency ``does not know whether the current estimate of salvage
    timber capable of being harvested is more or less than the
    previous estimate of 13 billion board feet, which was
    previously estimated as the accessible timber for harvesting.''
    Does the agency now have an estimate of their backlog
    inventory?
        Answer. The Forest Service does not routinely track the
    amount of merchantable volume that could be salvaged. The
    estimates noted by the GAO in their report were calculated for
    an effects statement on the emergency salvage bill when it was
    initially proposed. The estimates were obtained from individual
    national forests responding to a series of hypothetical
    situations (e.g., what amount of merchantable salvage timber
    would be available for harvest if Forest Plan standards and
    guidelines weren't incorporated into sale design?).
        Question. The GAO report states that provisions of the Act
    designed to expedite the sale of salvage sales had little
    affect on the timetable. If this is true, what factors allowed
    the agency to make these accomplishments?
        Answer. Many of the sales covered by the Rescissions Act
    were well into the sale preparation process when the Act was
    passed. As a result of the intense fires during the summer of
    1994, the agency had already placed a high priority on timber
    salvage. In addition, severe storms during the winter of 1995/
    1996 and more fires during the summer of 1996 added to the
    salvage opportunities. In some cases, excluding administrative
    appeals and limiting judicial review decreased time frames. In
    other cases, the controversies resulted in more litigation than
    is normally experienced. Based upon experience of the national
    forests reviewed by GAO, few appeals or legal challenges
    normally occur when selling salvage timber.
        Question. When will the expected Administration proposal to
    divide the salvage sale fund into two parts be received? What
    effect will this proposal have on salvage sale volume sold?
        Answer. We do not have an anticipated date for transmitting
    the proposal. Various options are being reviewed, including
    administrative changes to current programs. The fiscal year
    1998 budget was developed with a given volume planned to be
    prepared and offered for sale. There are no plans to change
    this volume unless our final appropriation is different from
    the President's budget request.
        Question. An agency briefing paper on the new Forest
    Ecosystem Restoration and Maintenance Fund, states that funds
    will be used to finance those management activities that are
    identified as being of high priority for ecosystem restoration
    and maintenance. How does this compliment or conflict with the
    ability to perform work of this nature through the KV program?
        Answer. KV expenditures are: (1) limited to the timber sale
    from which they were collected, (2) dependent on sufficient
    revenues being generated by the sale to finance the activities,
    (3) limited to projects within the timber sale area boundary,
    and (4) available for up to 5 years from sale closure.
    Activities accomplished from the proposed Forest Ecosystem
    Restoration and Maintenance Fund would not be subject to these
    restrictions and would compliment the use of KV on lands not
    associated with a timber sale.
        Question. Will timber be sold as part of management
    activities performed from this new fund?
        Answer. Final decisions have not been made as to what
    legislation will be proposed and the activities to be included.
        Question. Over the past 20 years the importance of the
    salvage timber program has increased significantly when
    compared to the green timber program with regard to the volume
    of timber offered for sale. For example, in fiscal year 1977
    the volume of salvage timber harvested was less than 8 percent
    of the total volume of timber harvested by the Forest Service,
    while in fiscal year 1996 the volume of salvage timber
    harvested was almost 50 percent of the total volume of timber
    harvested by the Forest Service. What has the Forest Service
    done to accurately determine the volume of salvage timber on
    national forest lands that can be offered for sale? What type
    of salvage volume inventory, if any, of salvage timber does the
    Forest Service maintain?
        Answer. Salvage has become an important component of the
    timber program on a percentage basis. The annual amount of
    salvage is determined by each field unit following events which
    kill or weaken trees, such as insect epidemics, fires,
    windstorms, and snow damage. Once the damage is determined,
    salvage sales are based on these salvage opportunities. Each
    ``opportunity'' must have sufficient salvage present to prompt
    a salvage sale effort. The actual salvage volume included is
    the amount that can be economically removed and still meet
    other environmental considerations such as riparian, wildlife,
    and visual needs. Additionally, in a regular green sale there
    are usually incidental amounts of salvage that are marked and
    included for harvest if they are not needed for other
    environmental purposes. Salvage efforts also vary depending on
    market factors. When there is a depressed market for small logs
    and chip material, we do not prepare this size salvage for
    sale. Field units continually survey for dead and damaged
    timber as a normal part of management. However, there is not an
    inventory of salvage because when a salvage opportunity is
    identified, it is addressed quickly to prevent deterioration of
    the products involved.

                       president's northwest forest plan

        Questions. The jobs-in-the-woods program as addressed in
    the President's Northwest plan speaks to the performance of
    ``short-term jobs * * * to restore the region's watersheds to
    environmentally sustainable conditions.'' (a) What is the
    inventory of such projects? (b) How do wages for these projects
    equate wages that displace forest products workers had
    previously received? (c) Does the jobs-in-the-woods program
    delay what is ultimately the economic demise of the small rural
    communities of the Northwest due to reduced timber productions?
        Answers. (a) Restoration needs and priorities are
    identified when watershed analyses are completed. Thus, the
    inventory of needs continues to grow as more and more analyses
    are completed. At current funding levels, we estimate at least
    10 years of priority restoration needs have been identified.
    Large natural events can and have increased overall needs for
    watershed restoration (e.g., Northwest flooding in 1996 and
    1997) compared to the initial watershed analyses. The project
    planning aspects (specifications, etc.) of these needs are
    completed 12-18 months ahead of implementation given current
    staffing and funding. (b) The analysis for the jobs-in-the-
    woods program for fiscal year 1995 indicated that the average
    wage and benefit for workers in the program was approximately
    $17.50 per hour. While this level exceeds the states'
    definition of a ``family wage'', it is below the level
    historically paid to primary timber workers. A primary
    difference between the two is the level and extent of benefits
    received. While the total compensation is below the historical
    level, this program has enabled workers to remain in their
    communities and obtain livelihoods by working in the woods. (c)
    Absolutely Not! The jobs-in-the-woods program for the Forest
    Service has been a $14-16 million a year program. Except for
    the first year, fiscal year 1994, this program has not involved
    new money. The overall magnitude/significance of injecting $14-
    16 million of funds into communities (over 500 residents)
    across the area of the NW Forest Plan has not been at a level
    that would prevent the ``economic demise'' of these
    communities.
        However, there has been three significant aspects of the
    jobs-in-the-woods program: (1) Jobs-in-the-woods program has
    provided the opportunity for many communities to develop new
    and improved skills for restoration related work so that they
    can locally respond to future restoration needs. (2) Jobs-in-
    the-woods has enabled the agency and the communities to better
    understand, appreciate, and capitalize on the opportunities to
    improve the quality of local jobs across all programs areas by
    working collaboratively. It's no longer simply how we use the
    jobs-in-the-woods funding to improve quality of jobs, but
    rather, how we design and manage our overall programs to best
    utilize and capitalize on the skills and abilities of local
    workers. (3) Jobs-in-the-woods is only one program within the
    Northwest Economic Adjustment Initiative assisting communities
    in transition. In conjunction with jobs-in-the-woods, the
    Forest Service has fully utilized its Rural Community
    Assistance program to assist communities to diversify their
    economic conditions. Some of this economic diversification has
    been aimed at bringing in completely new businesses but also
    has been aimed at designing new economic opportunities
    associated with the new natural resource management policies--
    e.g., creating new industries for small diameter products,
    utilization of special forest products, tourism, new recreation
    opportunities, etc. But the eventual success of these
    initiatives are generally dependent upon healthy watersheds.
    Both of these programs have provided the tools and wherewithal
    to assist in this transition (both programs working hand-in-
    hand) and the agency and communities are making the best out of
    them. If the watershed restoration/jobs-in-the-woods program
    was eliminated, it would cause additional and immediate
    economic problems to these affected communities with the loss
    the jobs associated with this level of financial investment (as
    would be the case of the elimination of any economic activity).
    But more critical is the loss of ability for the agency to
    restore and/or maintain the health and vitality of these
    watersheds. Without an active restoration program full recovery
    will be significantly delayed and will affect the local
    communities' ability to derive economic opportunities that are
    associated with healthy watersheds.
        Question. The agency will offer 763 mmbf as part of the
    President's Northwest Forest Plan. This volume (except that
    being offered by Region 5) is included in the planned total
    Region 6 planned offering of 1.025 bbf. Is this target on
    track?
        Answer. The 763 mmbf you reference includes the probable
    sale quantity (PSQ) of 694 mmbf plus 10 percent ``other wood''
    as defined by the Pacific Northwest Forest Plan. The Region 6
    portion of the estimated volume is 586 mmbf (533 mmbf in PSQ
    plus 10 percent other wood). The 586 mmbf is included in the
    1.025 bbf planned offering for all of Region 6. At this time,
    the sale preparation work is on track and the region expects to
    offer the full 1.025 bbf in fiscal year 1997.
        Question. The document entitled ``The Northwest Forest
    Plan, A Report to the President and Congress,'' dated 12/96
    cites examples of cooperation between the Forest Service,
    Bureau of Land Management, and the Fish and Wildlife Service,
    that helped reduce the required Endangered Species Act
    consultation from 114 days to 30 days in the area covered by
    the Plan. Is this same degree of cooperation occurring
    elsewhere in the United States for specific species which are
    affecting timber sales and other management actions? Has this
    cooperation had an affect on the appeals process? What action
    is being taken to ``institutionalize'' this degree of
    cooperation outside the Pacific Northwest?
        Answer. The streamlined consultation process has been a
    success. Where the teams focused on early interagency
    involvement, cooperated fully and were supported by decision-
    makers in their efforts, timeframes were greatly reduced and
    the resulting projects were better designed. In the summary
    produced for fiscal year 1996 by the Interagency Streamlining
    Consultation Group for Oregon, Washington, Idaho, Montana, and
    California, informal consultations were completed between one
    and 30 days with the an average of 17 days. Formal
    consultations were completed between one and 71 days, with an
    average of 46.5 days.
        Elsewhere in the country the consultation process varies in
    timeframe. In the Southeastern Region informal consultation
    averages about 30 days and formal consultations may take 4
    months. Outside the northwestern states consultation times are
    not specifically tracked.
        The Forest Service is engaged in a number of important
    interagency efforts related to consultation. An interagency
    Memorandum of Agreement is being prepared for streamlining
    program level consultations. This will save time and effort and
    lessen the need for additional formal consultations on projects
    such as timber sales and grazing permits. Additionally, the
    continued work of the interagency streamlined consultation
    teams in several regions has reduced timelines for consultation
    while assuring better designed projects. Our interagency
    cooperation, because it results in better designed projects,
    should reduce the need for appeals. However, the agency would
    have to design a systematic method to track and analyze this
    over time.

                        soil, water, and air management

        The Soil, Water, and Air Management program is proposed for
    an increase of $7.6 million including $2.5 million for
    operations and $5.1 million for improvements.
        Question. What impact has the harsh weather in the West and
    Midwest had on the planned Soil and Water Program? How might
    this affect the scope of the budget request for fiscal year
    1998 and 1999?
        Answer. The extensive rain, snow, wind, and flood damage in
    the West and Midwest will require Forests to adjust many work
    priorities for the coming fiscal years. If emergency
    supplemental funding authorizations fall short of identified
    needs, normal program funds will be re-directed to address
    pressing repair needs to bring the Forests back to full public
    safety. This will require Forests to delay normal programmed
    watershed improvements into future years. Similar adjustments
    may also occur in related programs such as wildlife and
    fisheries, recreation, and engineering.
        Question. How has the program been affected by water rights
    adjudication issues? Has the cost of involvement in and support
    to adjudication issues resulted in less attention to other
    resource management issues?
        Answer. The Forest Service is a water user and a party in
    44 adjudications in 8 western States. About 14 percent of the
    total Soil Water and Air (NFSO) Expanded Budget Line Item
    (EBLI) has been used to pay for associated water adjudication
    activities in recent years.
        Adjudication issues have diverted time, staffing, and
    resources away from other resource management issues in regions
    where water right adjudications are active. Cost for
    adjudications are multi-function financed, using the
    benefitting function concept. In most adjudications, the NFSO
    EBLI pays 50 percent; the remaining 50 percent is normally
    spread among recreation, timber and wildlife/fisheries
    accounts.
        Question. The interagency initiative to reclaim abandoned
    mines will focus on watersheds in Colorado and Montana. What is
    the inventory of other such projects throughout the United
    States? What is the specific cost of the three projects
    mentioned for which the fiscal year 1998 increased funding will
    be used?
        Answer. Of the approximately 38,000 abandoned and inactive
    mine sites on lands managed by the Forest Service, we estimate
    that about 4,100 sites contribute to non-Comprehensive
    Environmental Response Compensation and Liability Act (CERCLA),
    water quality problems. This figure may increase slightly when
    our inventory is completed in fiscal year 1998.
        Working in concert with states and other initiative
    partners, we are prioritizing watersheds to be addressed as
    funding becomes available. While figures are incomplete at this
    time, we estimate that Colorado and Montana will both receive
    about $2 million to finalize preparatory work and institute
    cleanup projects.
        The Forest Service and its USDI partner agencies have
    tentatively chosen Arizona as the third state in which to begin
    this program. While a final figure is not definite at this
    time, we estimate the preliminary work in the the third state
    will require between $500,000--$600,000 to Arizona to begin
    assembling relevant data, working with partners to delineate
    and prioritize watersheds, and begin needed water quality
    assessments prior to remediation efforts.
        Question. What specific changes are planned in this program
    as a result of storm damage in the West over the past 2 years?
        Answer. To respond to storm damages, resource professionals
    will shift work priorities into project design and contract
    administration. This will cause a de-emphasis on watershed
    analysis and input to other project work to some degree.
        Watershed improvements will focus on problems causing
    direct and indirect effects on riparian areas, anadromous and
    other key fisheries, habitat for Threatened and Endangered
    species, and watersheds not meeting state water quality
    standards.
        Watershed professionals will use knowledge gained from the
    recent flood events to assess cause/effect relationships
    between land management practices and damages, and work to
    revise management to minimize future problems.
        Watershed professionals are currently planning a specific
    effort to streamline methods to more quickly and efficiently
    evaluate damages and repair needs from floods and other natural
    disasters, provide consistent interpretation of findings, and
    coordinate with other agencies and local officials. This
    process will have strong parallels to our highly successful
    Burned Area Emergency Rehabilitation (BAER) program that deals
    with results of severe wildfires.
        In order to repair damages from severe storms in the Winter
    of 1995-1996, Congress appropriated $87.4 million in fiscal
    year 1996. The Forest Service allocated these funds to seven of
    nine Regions to perform a wide range of repair activities
    including watershed restoration, fisheries habitat repair, road
    and trail reconstruction, repair of recreation facilities, and
    similar actions. Request for additional emergency supplemental
    funds are currently before Congress to repair damages from
    storms over the 1996-1997 winter.

                              minerals and geology

        Question. What significant litigation has occurred in
    recent years regarding liability relative to abandoned mines on
    National Forest System land?
        Answer. The Forest Service has been involved in three
    significant cases related to abandoned mines on National Forest
    System land. These cases involved claims by the United States
    against potentially responsible parties for environmental
    damages and cleanup costs pursuant to the Comprehensive
    Environmental Response, Compensation, and Recovery Act (CERCLA)
    and other applicable environmental laws. The three cases are as
    follows.
        Shiny Rock (Amalgamated) Mill Site.--In May 1997, the
    United States Department of Justice (DOJ) filed a Consent
    Decree related to the Shiny Rock (Amalgamated) Mill Site in
    Oregon. The Consent Decree will require Persis Corporation to
    conduct a remedial action, including removal of tailings
    deposited adjacent to Battle Ax Creek, upstream of the water
    supply of Salem, Oregon. The site is located in the recently
    designated Opal Creek Scenic Recreation Area. Persis
    Corporation is the parent corporation of Shiny Rock Mining
    Company, which controlled the site and the surrounding area
    from 1973-1992.
        Bunker Hill Superfund Site.--In March 1996, DOJ filed suit
    in federal district court on behalf of the United States
    Department of Agriculture (USDA), the United States Department
    of the Interior (DOI), and the United States Environmental
    Protection Agency (EPA) against eight mining companies for
    extensive environmental damage in the Coeur d'Alene Basin in
    Northern Idaho. The suit, known as United States v. ASARCO et
    al., was brought under CERCLA and the Clean Water Act (CWA)
    both for natural resource damages and cleanup costs. The
    complaint alleges that decades of mining and smelting activity
    in the Coeur d'Alene basin and at the Bunker Hill smelting site
    have resulted in extensive environmental damages to the natural
    resources of the region, including wildlife, soils, and
    vegetation. The Coeur d'Alene Indian Tribe has also filed suit
    and joined the United States as a co-plaintiff in the
    litigation. The litigation itself is in the discovery stage and
    no trial date has been set yet by the Court.
        Blackbird Mine Site.--This litigation was initiated in 1983
    by the State of Idaho, who sued the owners of the Blackbird
    Mine under CERCLA and state laws. In 1990, the current owners
    of the Blackbird Mine, the Blackbird Mining Company, sued past
    owners and operators and also named DOI and USDA as third party
    defendants. In 1993, the United States sued the Blackbird
    Mining Company and previous owners and operators of the site
    under CERCLA, the CWA, and the Endangered Species Act. The
    United States' action and the State of Idaho's action were
    consolidated soon thereafter. In 1994, the United States
    District Court for the District of Idaho ruled in favor of the
    United States and the State of Idaho, finding the past and
    current mine owners and operators liable, while dismissing all
    claims against the Forest Service. In April 1995, the federal
    government reached an agreement with the mining companies in a
    Consent Decree covering both response actions and natural
    resource damages. The mining companies are conducting an
    ``Early Action'' response action at Blackbird Mine pursuant to
    an Administrative Order on Consent (AOC) negotiated with EPA,
    and are undertaking natural resources restoration action
    pursuant to the Consent Decree. In November 1995, the mining
    companies appealed the dismissal of their claims against the
    United States to the Ninth Circuit. That appeal has been stayed
    while the parties attempt to negotiate a settlement of the
    claims not resolved in the Consent Decree and the AOC.

                           landwownership management

        A $2 million increase is proposed in the Landownership
    program including $1 million in real estate management and $1
    million in Land Line Location.
        Question. When can it be expected that the new fee schedule
    to obtain fair market value for communication sites will be
    implemented? The agency budget justification says
    implementation will be delayed. What level of funding is
    necessary to assure prompt implementation of the fee schedule?
        Answer. The FS started implementing its new fee schedule
    for communications uses (in the western Regions of the United
    States) in Calender Year 1996. Implementation was initiated
    following an extensive series of on-site training sessions
    during 1996. The agency is now conducting a series of follow-up
    visits to a sample of administrative units, to monitor fee
    schedule implementation, and to assure that it is being done
    accurately and consistently. Over 90 percent of our
    administrative units in the West (Regions 1 thru 6) have
    implemented the new fee schedule. The fees for a significant
    percentage of existing facilities will increase dramatically as
    a result. Many permit holders qualify for the fee phase-in
    provisions of our policy. Therefore, we don't expect to capture
    the full market value for facilities under a fee phase-in until
    Calender Year 2002.
        In fiscal year 1997, the FS intends to make our
    communication use fee schedule for the western United States
    applicable to all NFS lands. We will begin with a public notice
    and comment process, with final adoption occurring later this
    year or in early 1998. Implementation of the fee schedule in
    the Eastern, Southern, and Alaska Regions of the FS is expected
    to occur beginning in CY 1998.
        Question. What portion of real estate management funds are
    being used to exchange lands within wilderness areas? What is
    the future wilderness land exchange program in terms of funds
    planned and parcels covered?
        Answer. We estimate that 5 percent of Agency real estate
    management funds are being used to process exchanges in which
    the United States will acquire lands within designated
    wilderness areas. As long as real estate management funds
    remain consistent, it is expected that the 5 percent will
    remain constant.
        Question. During discussions regarding fiscal year 1997
    appropriations, the agency noted that many small hydroelectric
    project applications are being delayed due to the complexity of
    analysis requirements. Specifically mentioned was Martin Creek.
    Please provide an update of the status of the hydroelectric
    application process including an inventory of applications and
    a comparative status of the analysis process over the past 3
    years.
        Answer. Attached is an inventory of hydropower project
    applications affecting NFS lands over the past 3 years
    including the status of each project and an indication of
    whether the project was delayed due to the complexity of issues
    related to the project. To answer your questions, we queried
    each of our nine regions. Based on each region's response, we
    found that many forests have been able to respond in a timely
    manner to project proposal over the past 3 years but only with
    a great deal of time and effort expended by the Forest Service
    staff. At the same time, a number of project proposals have
    been delayed on various forests due to the complex issues
    related to project analysis. In addition to the complexity of
    issues, the regions cite other delaying factors, including: the
    FS administrative appeals process, litigation, disagreements
    between FERC and the FS during joint NEPA analyses, FERC
    backlog of projects, lack of communication from FERC during key
    points in the analysis process, lack of skilled personnel and
    lack of sufficient funding to effectively run the hydropower
    program.
        As shown in the attached table, most delays have occurred
    in regions 5 and 6 where the bulk of hydropower licensing and
    relicensing proposals are pending. These delays primarily occur
    during the time the FS and FERC are preparing cooperative NEPA
    documents. Delays have occurred on 28 of the 67 projects (40
    percent) the FS has worked on over the past 3 years due to the
    complex issues involved with analyzing these projects.

                      STATUS OF HYDROPOWER LICENSING AND RELICENSING APPLICATION  BY REGION 1994-97
    ----------------------------------------------------------------------------------------------------------------
    Number        Project name            Application type                Status              Forest Service delays
    ----------------------------------------------------------------------------------------------------------------
                                                  Region 1 (Northern Region)

      2188Missouri-Madison          Relicense..............  FS/FERC almost ready for      No
                                                              DEIS issuance.
      2075Noxon Rapids              ...do..................  Relicensing started in 1995/  No.
                                                              FS and other agencies
                                                              negotiating settlement
                                                              agreement w/Licensee.
      2058Cabinet Gorge             ...do..................  ...do.......................  No.
      1991Moyie River               ...do..................  FS involved in Stage I        No.
                                                              consultation.

                                               Region 2 (Rocky Mountain Region)

      2187Georgetown                ...do..................  FS/FERC completed EA/license  Yes.
                                                              issued.
      2035Gross Reservoir           ...do..................  FS involved in                No.
                                                              preapplication consultation.
      2275Salida                    ...do..................  FS/FERC completed EA-license  Yes.
                                                              issued.
      2032Strawberry                ...do..................  FS in preapplication          No.
                                                              consultation.

                                                  Region 3 (Southwest Region)

      2069Childs-Irving             ...do..................  FS/FERC preparing EA-draft    Yes.
                                                              EA about to be issued.

                                                Region 4 (Intermountain Region)

      1994Snake Creek               ...do..................  FS in preapplication          No.
                                                              consultation.
      1517Monroe                    ...do..................  ...do.......................  No.

                                              Region 5 (Pacific Southwest Region)

       137Mokelumne                 ...do..................  FS reviewing amended          No.
                                                              application.
       184Ed Dorado                 ...do..................  FS involved in Stage I        No.
                                                              consultation.
      1388Lee Vining                ...do..................  FS administration             Yes.
                                                              appealpending.
      1389Rush Creek                ...do..................  ...do.......................  Yes.
      1390Lundy                     ...do..................  ...do.......................  Yes.
      1394Bishop Creek              ...do..................  Litigation recently resolved  Yes.
                                                              in DC Circuit Court.
      2661Hat Creek                 ...do..................  FS providing comments on      No.
                                                              application.
      2687Pit 1                     ...do..................  ...do.......................  No.
      1962Rock Creek                ...do..................  FS coop. agency in FERC EIS.  No.
      2105Beldon Siphon             Amendment..............  FS administration appeal      Yes.
                                                              recently resolved.
      1932Lytle Creek               Relicense..............  FS providing preliminary      No.
                                                              4(e) conditions.
      1933Santa Ana                 ...do..................  FS providing 4(e) conditions  No.
      1934Mill Creek                ...do..................  ...do.......................  No.
       372Lower Tule                ...do..................  FS beginning to review        No.
                                                              proposal.
      1333Tule River                ...do..................  DC Circuit Court decision on  Yes.
                                                              litigation issued recently.
      1930Kern River 1              ...do..................  Coop. EA in progress--        No.
                                                              preliminary 4(e)s issued.
      2290Kern River 3              ...do..................  FS admin. appeals pending...  Yes.
      1354Crane Valley              ...do..................  ...do.......................  Yes.
      1988Haas-Kings                ...do..................  ...do.......................  Yes.
      2017Big Creek                 ...do..................  FS involved in                No.
                                                              preapplication consultation.
      2085Mammoth Pool              ...do..................  EA in progress..............  No.
      1061Phoenix                   ...do..................  FS administration appeal      Yes.
                                                              pending.
      3258Pine Creek                New application........  License denied litigation in  Yes.
                                                              DC Circuit Court resolved
                                                              recently.
      6188Red Mt.-Tinemaha          ...do..................  License issued. Licensee      Yes.
                                                              recently filed lawsuit
                                                              against FS in state court
                                                              re: water rights issue.
     11543Lewiston                  ...do..................  FS reviewing application....  No.
     11452Angels                    Transfer of license....  FS working on NEPA w/FERC...  No.
     11477Utica                     ...do..................  ...do.......................  No.
     10081Clavey                    New Application........  Application withdrawn in      No.
                                                              1995 FS was coop. w/FERC on
                                                              EIS.

                                              Region 6 (Pacific Southwest Region)

      1927N. Umpqua                 Relicense..............  FS working on NEPA analysis.  No.
       460Cushman                   ...do..................  FS participating in NEPA      No.
                                                              analysis.
      2042Box Canyon                ...do..................  FS beginning to review        No.
                                                              application.
      2225Sullivan                  Amendment..............  FS working on NEPA document.  No.
      2016Mayfield-Mossy Rock       Relicense..............  FS beginning consultation...  No.
      2071Yale                      ...do..................  ...do.......................  No.
      2342Condit                    ...do..................  FS analyzing proposal.......  No.
      1862Nisqually                 ...do..................  FS working on NEPA document.  No.
      3721Nooksack                  New application........  Part of river basin           Yes.
                                                              cumulative EIS. FS was
                                                              coop. agency w/FERC but
                                                              withdrew due to
                                                              disagreements over
                                                              information needs. FS
                                                              commented on DEIS in 1995.
                                                              FEIS not yet issued.
      4282Deadhorse Creek           ...do..................  Part of river basin EIS.      Yes.
                                                              (See discussion for
                                                              Nooksack Falls Project on
                                                              previous page).
      4312Canyon Creek              ...do..................  ...do.......................  Yes.
      4376Rocky Creek               ...do..................  ...do.......................  Yes.
      4437Diobsud Creek             ...do..................  ...do.......................  Yes.
      4628Wells Creek               ...do..................  ...do.......................  Yes.
      4738Glacier Creek             ...do..................  ...do.......................  Yes.
     10100Irene Creek               ...do..................  ...do.......................  Yes.
     10416Anderson Creek            ...do..................  ...do.......................  Yes.
     10942Martin Creek              ...do..................  ...do.......................  Yes.

                                                           Region 8

       269Queens Creek              Relicense..............  FS is preapplication process  No.
      1951Sinclair                  ...do..................  FS participating in EA......  No.

                                                           Region 9

      2064East Fork Chippewa River  ...do..................  FS in preapplication          No.
                                                              consultation.
      2113Wisconsin River           ...do..................  FS administration appeal      Yes.
                                                              pending.
       469Winton                    ...do..................  FS in prenotice stage of      No.
                                                              application review.
      2360St. Louis                 ...do..................  License issued in 1966......  No.
      1864Bond Falls                ...do..................  FS submitted preliminary      No.
                                                              4(e) conditions in 1996.
      2402Prickett                  ...do..................  License issued in 1995 but    Yes.
                                                              rehearing pending.

                                                           Region 10

       420Ketchikan Lakes           ...do..................  FS involved in                No.
                                                              preconsultation process.
     11077Goat Lake                 New application........  FS involved in joint NEPA w/  No.
                                                              FERC.
    ----------------------------------------------------------------------------------------------------------------

        Questions. Additional challenges are occurring as a result
    of urban encroachment adjacent to NF Lands. (a) How has this
    affected the land line location program? (b) Is an increasing
    amount of funds being used to support litigation relative to
    private land encroachment? (c) How has this affected the timber
    sale program on lands adjacent to private ownership?
        Answers. (a) Urban encroachment on NFS lands is occurring
    at a rate faster than funding for the Landline Location program
    allows us to survey the boundaries. The majority of urban
    interface encroachments are occurring in areas with the highest
    real estate prices, areas of high demand for private ownership,
    and areas with high development potential because they provide
    easy access to the public lands. Areas around Los Angeles, CA;
    Lake Tahoe, NV; Jackson, WY; Aspen, Vail, and the Front Range
    of Colorado are heavily impacted. This increasing need to
    survey, mark, and maintain the NFS boundaries in and adjacent
    to urban development has refocused the direction of the
    Landline Location program. The program in the past was focused
    almost exclusively on physically marking the lines where
    resource management activities were occurring. In the past
    these land and resource activities were occurring faster than
    the forest surveyor could establish or mark the property lines.
    Consequently only the most serious encroachments and trespasses
    were acted upon. The Landline Location program in recent years
    has become more focused on providing a complete stewardship
    responsibility of the public estate, including the survey and
    marking of these urban interface boundary lines to prevent
    occupancy of NFS lands, and to support land and resource
    management activities. Included in this responsibility is the
    resolution of property line conflicts with our adjoining
    landowners as well as the defense of the public estate. We now
    place greater emphasis on protecting the boundary lines
    previously marked, and marking boundary lines where there is a
    greater likelihood of urban interface encroachment onto the
    public estate.
        (b) There does not appear to be a significant increase in
    the amount of funds used to support litigation to resolve
    private land encroachments on NFS lands. This is due in part to
    efforts on the part of the FS to resolve encroachments and
    trespass cases without the use of litigation, using the various
    public laws and authorities available to resolve encroachments
    on NFS lands. This effort to resolve encroachments before
    litigation develops is considered a lands stewardship
    responsibility and is generally funded and/or supported with a
    combination of Landline Location (NFLL), Real Estate Management
    (NFLA), and benefitting function funds. Often the potential for
    litigation encourages the FS and the encroaching adjoiner to
    seek an amicable and legally acceptable resolution.
        (c) The FS policy is to survey and mark all NFS boundaries
    prior to any resource management activity occurring on NFS
    lands adjacent to non-NFS lands (private, corporate, state, or
    other federal agency lands). These land surveys, performed
    prior to the resource management activities usually identify
    encroachments on the public estate, as well as mark the
    boundary lines of the NFS. The discovery of encroachments on
    NFS lands may in some cases lead to the exclusion of land and
    resource management activities within the strip of encroachment
    until such time as the encroachment is resolved.

                           infrastructure management

        An increase of $3.2 million is planned for Infrastructure
    Management, including $1.9 million for road maintenance and
    $1.3 million for maintenance of facilities.
        Question. Up to $5 million of road maintenance funds have
    been authorized for use in obliterating forest roads. In what
    regions have such funds been spent in? What criteria are
    employed to determine which roads should be obliterated?
        Answer. In fiscal year 1996, all Regions obligated road
    maintenance funds for road obliteration. The amount of road
    maintenance funds obligated in each Region for road
    obliteration in fiscal year 1996 is summarized below.

    Fiscal year 1996 road maintenance funds obligated for road obliteration

            Region                                                 Thousands
    1.................................................................  10.8
    2.................................................................  35.0
    3.................................................................  72.6
    4.................................................................   7.5
    5................................................................. 162.5
    6................................................................. 548.1
    8.................................................................  24.1
    9.................................................................   1.7
    10................................................................  30.0
                            -----------------------------------------------------------------
                            ________________________________________________
          Total....................................................... 892.3

        Land managers at the field level decide which roads should be
    obliterated based on forest plan objectives and resource management and
    protection needs. Road obliteration decisions are made based on the
    long term need of a road to manage and protect resources; the need to
    reduce erosion or limit road density to enhance wildlife management; or
    the need to meet other ecosystem management objectives.
        Predominately, the roads being obliterated are un-engineered roads
    that are causing serious environmental damage due to poor location,
    steep grades, and lack of proper drainage. They are mostly old skid
    trails, off-road vehicle tracks, and timber or mining roads constructed
    without the benefit of proper design. Many have already been closed to
    vehicle use. In a few cases, they are Forest Development Roads no
    longer needed due to changed resource management objectives.
        Question. Despite a slightly more than 2 percent increase in road
    maintenance funding request, there is no increase in accomplishment.
    How will the increased funds be used?
        Answer. The requested funding is sufficient to fully maintain
    approximately 40 percent of roads and associated structures at a level
    consistent with current use. We expect little change in the percent of
    roads fully maintained since the 2 percent increase is roughly
    equivalent to inflation.
        Question. As the agency reduces its employees, how has this
    translated to a reduction in facilities that must be maintained for the
    employees? Are costly facilities able to be eliminated?
        Answer. Many Forest Service offices are in leased facilities. As
    facility leases come up for renewal, we consider moving to government-
    owned facilities or reducing the square footage needed in the new
    lease.
        Some Forests have looked for opportunities to make unused space
    available through sharing arrangements with other agencies. Forests
    have also turned back unused space to the General Services
    Administration for reassignment to other agencies.
        Some examples of efforts to eliminate or reduce facilities include:
        Region 1.--Six offices co-located into three with four additional
    offices planned for co-location in the near future.
        Region 4.--Updated a forest facilities master plan calling for the
    elimination of 120 buildings.
        Region 5.--After co-locating ranger districts, three leased
    facilities are being eliminated and two district office facilities are
    recommended for disposition. One administrative unit moved from a
    leased facility to a government-owned facility and an old ranger house
    used for administrative purposes is planned for disposal. Also, space
    for a Forest Supervisor's Office will be reduced when contracting for a
    new lease.
        Region 6/Pacific Northwest Station.--A warehouse and a residence
    will be exchanged for riparian resource land. A Research lab has been
    transferred to a state university. A guard station was transferred to a
    town for use as a city park. Co-location of Forest Service and BLM
    personnel is in progress in several locations across the Region. Sites
    not currently in use where long-term need by FS has not been determined
    have been made available for use by others via special use permits
    using the Granger-Thye authority. Where recreation is the preferred
    activity, some facilities such as fire lookout towers are being made
    available for rental using the Granger-Thye authority.
        Region 8.--District consolidations in South Carolina, Mississippi,
    and Texas and a forest consolidation in Virginia (George Washington-
    Jefferson NFs) will lead to reductions in facilities. Regional Office
    downsizing has reduced the amount of leased space required.
        Region 10.--Minor consolidation of leased space on two national
    forests has led to minor consolidation of leased space.
        In the case of Research, many of our laboratories are federally
    owned. We are co-located with a number of Universities on their
    campuses and in some cases the space is free.
        Budget reductions in fiscal year 1996 have caused us to close seven
    locations. Each closure has different circumstances to address. In some
    cases the facilities are still being maintained due to leases and
    contract stipulations. One facility has been transferred to a community
    college as a result of Congressional direction. No savings have
    occurred to date due to transfer of station costs and utility/general
    maintenance contracts which need to be continued until facilities are
    eliminated.
                                law enforcement
        The Administration proposes an increase of $2.3 million to this
    program.
        Question. The Forest Service and Department requested $69 million
    for law enforcement operations. The administration reduced this amount
    in spite of an agency appeal. Now the Forest Service faces eliminating
    more than 60 law enforcement employees. What amount of funding will
    prevent the elimination of these positions?
        Answer. In the Administration's 1998 budget for law enforcement
    there is an increase of $2.3 million from the previous fiscal year. In
    recent years, the approval and passage of laws specifically related to
    increased law enforcement salaries, including Title 5, U.S.C. Section
    5545 (a) Law Enforcement Availability Pay for criminal investigators,
    and (c) Administratively Uncontrollable Overtime for law enforcement
    officers, and approval of early retirement for LEOs has continued to
    increase base program costs. This $2.3 million will cover increased
    base costs for a reduced level of law enforcement employees.
        Law enforcement personnel are more expensive to fund than normal
    agency personnel because of the laws and benefits listed above. These
    higher base costs plus the additional costs to maintain specialized
    training requirements along with certifications and specialized
    equipment needed in the performance of their duties contribute to an
    estimated costs for a Law Enforcement Officer to be around $75,000 per
    individual. After fixed costs are reduced from the budget for law
    enforcement (fleet equipment, support, and cooperative law enforcement)
    90 percent of the remaining amount goes directly to salary and
    associated costs.
        Presidential direction last year directed the Agency to place an
    additional 20 law enforcement officers on the California/Mexico border
    to address the increased resource violations created by illegal aliens.
    This direction has further impacted the Forest Service law enforcement
    program. In order to meet this special direction, we are detailing
    officers from regular duty stations service-wide to this special
    problem area. The FS has requested reimbursement from INS for these
    operations, both those already provided and those that will continue in
    fiscal year 1998.
        Continued refinement of information has identified that added costs
    could create a shortfall in funding for some occupied positions.
    Approximately, 50 occupied positions could be affected. All of these
    positions are considered important to maintain a professional effective
    program. Costs associated with a reduction of 50 positions is estimated
    at $3.7 million. However, a higher funding level for this program would
    require an offset of providing lower funding for other Agency program
    areas.
        Question. Results from an independent study of the law enforcement
    organization seemed to indicate that it was too early to determine the
    effectiveness of the ``straight-line reporting structure.'' The report
    states that the organization is still evolving. What steps is the
    agency going to take to assure full evolution and operation as a
    professional law enforcement organization?
        Answer. The Forest Service fully supports the implementation of the
    straight-line reporting structure for the law enforcement program. The
    program now has investigative independence and is free from allegations
    of interference and improprieties. Also professional standards and
    guidelines are now in place which improve the program's role in
    supporting resource management activities and ecosystem protection. The
    following steps will be taken to continue the evolution of this
    important program:
        1. Continue to evaluate the level of organizational structure
    needed and implement standards of performance for LE&I personnel that
    will heighten the professionalism of LE&I.
        2. Emphasize training, both initial and in-service, which is an
    inherent part of any professional organization.
        3. Examine the need to streamline and update Title 36, Code of
    Federal Regulations, as it relates to FS LE&I activities and
    prohibitions.
        Question. The President has directed the Forest Service to station
    20 officers on the Cleveland National Forest for the purpose of
    conducting border operations. These operations have resulted in the
    apprehension of thousands of illegal aliens. What authority does the
    Forest Service have to conduct such operations? How much has the
    President's direction cost?
        Answer. The authorities for the protection of the resources are
    contained in 16 U.S.C. 551, 559, 559b, 559c, and 559d. 16 U.S.C. 553
    allows officers from the Forest Service to ``aid the other Federal
    bureaus and departments on request from them, in the performance of the
    duties imposed on them by law.'' At the direction of the President, the
    Forest Service has provided additional law enforcement personnel on the
    southern areas of the Cleveland National Forest. These additional
    officers have been provided to increase the protection of the using
    public, employees and the resources. The role of the Forest Service is
    not the apprehension of illegal aliens. If individuals are contacted
    while law enforcement personnel are performing their core mission, they
    are detained for the United States Border Patrol.
        During fiscal year 1996, costs for the Cleveland operations that
    were above normal Law Enforcement activity costs amounted to
    $1,048,000. This amount covers the extra travel/per diem/lodging and
    overtime for the officers detailed to this special operation. Officers
    base salaries are not included.
        Costs above normal activity levels for this fiscal year through
    March 31, 1997, are estimated at approximately $556,000.
                  wildland fire management and brush disposal
        A significant budget restructuring is being proposed for the
    Wildland Fire Management program. The Administration is also proposing
    to establish a government-wide emergency contingency account to support
    operations for major national emergencies. Under the Brush Disposal
    program, the agency proposes to accomplish 33.7 thousand acres less of
    treatment.
        Question. The agency recently initiated an effort referred to as
    ``Fire 21'' to address issues of safety, planning, role of fire,
    wildland urban interface, preparedness, and accountability. What
    significant improvements have occurred in these areas as a result of
    ``Fire 21?''
        Answer. ``Fire 21'' is a long term strategy to provide a safe and
    more effective wildland fire protection program. It has provided a
    communication tool for identifying the priorities in wildland fire
    management. This has helped managers and employees focus efforts on the
    critical jobs to be done. A line officer team and a network of fire
    management officers are working together for the first time in a
    national effort to facilitate implementation of Fire 21. A Fire 21
    Cadre Implementation Plan is being developed to direct the training and
    development of the workforce in the skills required to meet future
    challenges.
        Question. What specific measures have been implemented to make fire
    suppression and preparedness more efficient and cost effective?
        Answer. Comparative analyses are made of different mixes of
    firefighting resources to determine the least cost and most effective
    combinations for a given area. National, regional, and forest reviews
    examine budget implementation and preparedness activities on a
    regularly scheduled basis to improve accountability. Opportunities
    where resources can be shared have been implemented with consolidation
    of facilities where appropriate. Contracts for support services are
    made through a competitive bid process.
        Question. What procedures are used by the Forest Service for
    projecting and allocating wildfire suppression resources among
    wildfires in order to control, and possibly reduce, wildfire
    suppression costs?
        Answer. The National Interagency Fire Center coordinates the
    efficient mobilization of resources at the national level. This
    assignment of resources is made on a priority basis for large fires in
    competition with each other. Priorities are set by a multi-agency
    coordination group based on values at risk. Costs are considered in
    terms of mobilization and transport of closest available resources.
    Similar procedures are used by Geographic Area Coordination Centers
    around the country for regional and local decisions.
        Question. How well do the cooperative agreements for allocating
    wildfire suppression resources between the Forest Service and other
    federal, state and local agencies work? Are improvements needed in how
    the allocation of suppression resources is accomplished?
        Answer. Cooperative fire protection agreements between federal and
    state agencies promote the effective use of fire resources between
    organizations. There has been a significant effort between federal,
    state and local fire agencies to establish new and update old
    cooperative fire protection agreements, particularly in areas with
    wildland/urban interface fire challenges. This process will improve the
    effective and efficient use of interagency fire suppression resources.
        Question. How does the Forest Service estimate, document and
    account for wildfire suppression costs? Is an Incident Cost Accounting
    Report (ICAR) prepared for each wildfire? If not, why not?
        Answer. The National Fire Management Analysis System allows
    projections of average annual suppression costs for national forest
    system lands. The suppression cost of each wildfire is estimated by use
    of an Escaped Fire Situation Analysis used at the local level. Incident
    Management Teams assigned to large wildfires track and monitor
    suppression costs of each incident daily and develop final fire cost
    packages for the agency. Agency Comptrollers monitor expenditures and
    provide advice for cost control measures to local line officers.
        The size and complexity of the fire determine if an Incident Cost
    Accounting Report or equivalent is prepared. There are no set factors
    for its use. Examples of some determinants for the use of an Incident
    Cost Accounting Report are multiagency jurisdiction, public concerns,
    threat to resources and property, etc.
        Question. What level of preparedness funding would be necessary in
    fiscal year 1998 to operate at 90 percent MEL?
        Answer. Preparedness funding at 90 percent MEL would mean a level
    of $351 million.
        Question. The agency budget justification states that there is a
    greater risk to public and firefighter safety with funding below 100
    percent of the MEL index (most efficient level). How is safety
    specifically affected by a lack of 100 percent funding?
        Answer. The National Fire Management Analysis System is used to
    determine the Most Efficient Level (MEL) for wildfire suppression. The
    MEL quantifies the organizations and budget needed to safely and
    effectively fight wildfire. MEL is based on historical wildfire
    occurrence, size and difficulty of control in specific locations. At
    funding levels less than MEL, there are fewer firefighters and
    equipment available. Less firefighters for initial attack often results
    in larger, more intense wildfires. To the extent that there are larger,
    more dangerous fires, firefighters and public safety become of
    paramount concern.
        Question. The agency established a goal of ``red carding'' 75
    percent of all Forest Service employees? How successful has this effort
    been so far?
        Answer. The goal is to increase support for fire suppression,
    especially during periods of severe fire activity. This also includes
    non-redcarded personnel. Several Regions have already required fire
    support requirements be placed in every person's (both redcard and non-
    redcard personnel) position description which has increased the pool of
    available personnel.
        Some units have reported a red-card success rate as high as 85
    percent.
        Question. In combination with Brush Disposal funds, what is the
    overall status of the hazardous fuels inventory? Is this inventory
    declining or increasing?
        Answer. We estimate that there are approximately 58 million acres
    having naturally occurring fuels that are predisposed to stand
    replacement fire, i.e., fire which will totally consume all the
    vegetation. This, by far, outshadows any level of fuels generated
    specifically by timber sale activities and which qualify for brush
    disposal funds. This acreage predisposed to stand replacement fire is
    constantly growing, especially as commodity production levels decrease.
        Question. The agency budget justification states that hazardous
    fuels reduction activities which were previously funded under the
    Preparedness and Fire Use budget line item have been moved to the
    Suppression Operations budget line item. A review of the President's
    budget does not indicate how actual planned expenditures for this
    function will be affected by the change. What specific expenditures are
    planned for hazardous fuels reduction as compared to the past 5 years
    of expenditures? What gains will be realized from this change?
        Answer. The new budget structure moves hazardous fuels reduction
    activities from the Preparedness and Fire Use budget line item (renamed
    Preparedness) to the Suppression Operations budget line item (renamed
    Fire Operations). This allows flexibility in funding hazardous fuels
    activities to more effectively address the health of the Nation's
    forests without detracting from the capability to prevent forest fires
    and to take prompt, effective initial attack suppression action on
    wildfires.
        The proposed budget level will allow funding for hazardous fuels
    reduction at a level of between $30-$50 million. Depending on weather
    conditions this funding level will allow treatment of between 850,000
    and 1,300,000 acres in high priority areas where the risk of wildfire
    and long-term damage to resources can be reduced through fuels
    management.
        Question. The brush disposal accomplishments for fiscal year 1996
    and fiscal year 1997 are higher than those proposed for fiscal year
    1998. Does this indicate that progress is being made in reducing the
    backlog of untreated acres?
        Answer. No. The brush disposal line item is a permanent
    appropriation for the treatment of debris resulting from a timber sale.
    National forest timber sale contracts require treatment of debris
    created by timber sale operators. This work can be performed by the
    timber purchaser, the purchaser can request the Forest Service to do
    the work by depositing funds to cover the cost of the work, or the
    Forest Service can require mandatory deposits and the agency complete
    the work. The reduction of brush disposal acres is in response to the
    decline in timber sales over the past several years. Hazardous fuels
    reduction is part of the Fire Operations line item and provides for all
    hazardous fuel reduction program activities. These activities are
    conducted in high priority areas where the risk of wildfire and long-
    term damage to resources can be reduced through fuel management. The
    President's budget would allow funding for hazardous fuels reduction at
    a level of between $30 and $50 million. Depending on suitable weather
    conditions, this funding level will allow treatment of between 850,000
    and 1,300,000 acres which is an increase of between 100,000 and 550,000
    acres from the level planned for fiscal year 1997.
        Question. What is the status of the Brush Disposal fund nationwide
    in terms of cash on hand and to be collected, versus the cost of work
    to be accomplished with brush disposal funds?
        Answer. As of September 30, 1996, the Brush Disposal fund had an
    unobligated cash balance of $39 million, and anticipated collections
    during fiscal year 1997 are estimated to be approximately $16 million
    (this is an updated anticipated collection figure subsequent to the
    President's Budget.) The planned program level for fiscal year 1997 is
    for treating 185,000 acres at a cost of $45.6 million. There are
    adequate funds available to complete planned brush disposal in fiscal
    year 1997.
        Question. Smokey Bear is an integral part of the Forest Service
    fire prevention message. Smokey is uniformly recognized by school
    children throughout the United States as an icon that can be trusted.
    Critics say Smokey Bear's use is over zealously protected by the Fire
    Prevention Establishment to be used exclusively for the prevention of
    fire. What is the agency's position on the expanded use of Smokey Bear
    in other critical national initiatives such as ``just say no to drugs''
    campaign, or a national violence prevention program?
        Answer. Congress established Smokey Bear as the National Forest
    Fire Prevention Symbol with Public Law 82-359. The law states clearly
    that Smokey is to promote ``Forest Fire Prevention''. It further takes
    him out of the public domain and places him under the direction of the
    Secretary of Agriculture in cooperation with the National Association
    of State Foresters and the Advertising Council. In 1974, Smokey's
    responsibility to Forest Fire Prevention was further reinforced by
    Public Law 93-318.
        Studies conducted through the Advertising Council show Smokey's
    high recognition level and success is due to his simplicity of message.
    Almost 70 percent of school children can recognize his message of
    ``Remember, Only You Can Prevent Forest Fires''. To confuse his message
    with drugs, violence, ecology, pollution or any other national campaign
    is to dilute his message and violate his intended use.
                        reconstruction and construction
    Facilities construction and reconstruction
        The administration proposes to decrease funds to support facilities
    by a total of $27.7 million including a reduction of $26.5 million for
    recreation facilities.
        Question. The agency proposes to change appropriation language to
    authorize the expenditure of up to $250,000 for minor construction. How
    would funds be generated to perform the assumed increase in minor
    construction? What program accomplishments would be affected by
    diverting funds from other line items for the purpose of minor
    construction? Would the performance of this minor construction be
    managed in such a manner as to assure other program accomplishment does
    not suffer? An agency briefing paper dated February 7, 1997 states that
    if the limit were increased to $250,000, a total of 85 percent of all
    Research and FA&O facility reconstruction or construction projects
    could be accomplished. If this change were enacted, what timetable
    would the agency follow to bring facilities to current standard without
    affecting program accomplishments? What percent of the recreation
    backlog would be applicable to this new $250,000 limit?
        Answer. We do not intend to increase significantly the total number
    of dollars spent for minor construction. Therefore, program
    accomplishments in funds tapped for minor construction will not be
    affected significantly.
        Raising the minor construction authority would provide another tool
    to give line officers more flexibility to meet their priority needs.
    Some program funds could be focused on a Region-wide basis for minor
    construction of replacement facilities rather than continued remodeling
    or renovations of old structures. For example, additions could be
    constructed to replace aging mobile homes used for temporary office
    space or crew quarters.
        A summary of minor construction projects completed in fiscal year
    1996, planned for fiscal year 1997, and estimated for fiscal year 1998,
    based on raising the minor construction authority, is shown in Table A.
    The total number of projects completed will be reduced with the average
    cost of individual projects expected to increase.

                                        TABLE A--FA&O MINOR CONSTRUCTION PROJECTS
    ----------------------------------------------------------------------------------------------------------------
                                                                         Number of       Total in      Average cost/
                               Fiscal year                               projects        millions         project
    ----------------------------------------------------------------------------------------------------------------
    1996 (completed)................................................              90            $3.9         $43,000
    1997 (planned)..................................................              65             3.3          51,000
    1998 (estimated):
        Less than $100,000..........................................              28             1.7          61,000
        $100,000 to $250,000........................................              11             1.6         146,000
    ----------------------------------------------------------------------------------------------------------------

        If the change is enacted and the Regions do not increase the amount
    of benefitting funds for minor construction, the construction and
    reconstruction backlog will continue to grow. The 85 percent refers to
    the number of projects that have a total individual project cost under
    $250,000. Projects under $250,000 account for 27 percent of the total
    estimated FA&O facility backlog cost. Because this proposal does not
    intend to raise capital investment funding, the backlog will continue
    to grow. Therefore, no timetable for bringing existing facilities up to
    current standards can be set.
        The recreation facility backlog, now in excess of $818 million, is
    not expected to change significantly with this increase in authority.
        Question. What portion of the reconstruction backlog is applicable
    to the current ``minor'' reconstruction limit of $100,000?
        Answer. About 50 percent of the total number of projects on the
    Fire, Administrative, and Other (FA&O) facilities reconstruction and
    construction backlog could be accomplished under the current minor
    construction authority of $100,000.
        Question. Recently the Oakridge Ranger Station, Willamette National
    Forest was destroyed by arson. What effort has been undertaken to
    reconstruct this facility? When will this task be accomplished? Why was
    this project not included in the fiscal year 1998 construction plans?
    If it were now included, what projects would be dropped from the plan
    if there were no increase in appropriation?
        Answer. The Forest Service is proceeding expeditiously in assessing
    options of reprogramming or transferring funds to provide approximately
    $3.9 million in fiscal year 1997 to reconstruct the Oakridge Ranger
    Station. Once funds are are available, it could take up to 2 years to
    complete construction since outside work cannot proceed during the
    winter months at the site.
        The Oakridge project was not included in the fiscal year 1998
    program since it was the intent of the Forest Service to submit the
    reprogramming request in fiscal year 1997. It is important to note that
    if the $3.9 million Oakridge project is included in the project list
    for the current $8.196 million total FA&O request, each Region's share
    could be reduced more than half, from $841,000 to about $379,000. The
    allocation to the Northeastern Station would be reduced from $394,000
    to $252,000.
        The projects in the FA&O Reconstruction and Construction Project
    Listing in the Forest Service's explanatory notes are listed in
    priority order by Region. The following list shows projects that
    probably would be dropped or receive substantially reduced funding
    based on the decreased allocations to Regions if Oakridge is included
    without an increase in this line item. Some adjustments in the final
    list of projects may also be needed since it is unlikely across-the-
    board reductions would result in a viable project in all cases. Some
    minor adjustments in the planning and design projects may be possible
    but large reductions would most likely result in loss of personnel and
    capability to accomplish planning and design work.

    ----------------------------------------------------------------------------------------------------------------
                                                                                                    Project  Reduced
                    State                           Forest                    Project name          dropped  funding
    ----------------------------------------------------------------------------------------------------------------
    Montana..............................  Lolo....................  Ninemile RS utilities........        X  .......
        Do...............................  Lewis & Clark...........  Hannon Gulch/Little Snowies          X  .......
                                                                      WC.
        Do...............................  Flathead................  Spotted bear fourplex, phase   .......        X
                                                                      2.
    Colorado.............................  GM/UNC/Gunn.............  Norwood Bunkhouse............        X  .......
        Do...............................  Med Bow/Routt...........  Yampa Bunkhouse..............        X  .......
        Do...............................  ...do...................  Walden Bunkhouse.............  .......        X
    Arizona..............................  Kaibab..................  Chalendar RS, phase 3........  .......        X
    Idaho................................  Boise...................  Garden Valley crew quarters..        X  .......
    Utah.................................  Fishlake................  Loa district office..........        X  .......
        Do...............................  Dixie...................  Panguitch Bunkhouse..........  .......        X
    California...........................  LTBMU...................  LTBMU Supervisor's Office,           X  .......
                                                                      phase 3.
    Oregon...............................  Fremont.................  Silver Lake Office, phase 1..  .......        X
    Kentucky.............................  Daniel Boone............  Redbird WC...................  .......        X
    Michigan.............................  Hiawatha................  St. Ignace administration      .......        X
                                                                      site.
    Alaska...............................  Chugach.................  Cordova Office, phase 3a.....        X  .......
        Do...............................  ...do...................  Seward RD Office.............        X  .......
        Do...............................  Tongas-Stik.............  Petersburg RD housing........  .......        X
    West Virginia........................  Morgantown..............  Morgantown Annes construction        X  .......
    ----------------------------------------------------------------------------------------------------------------

        Question. How has the Challenge Cost-share and other
    partnership programs specifically assisted in the
    reconstruction and construction of recreation facilities?
        Answer. The Challenge Cost-share and other partnership
    programs assist in the reconstruction and construction of a
    wide range of recreation facilities, specifically in the areas
    of: Developed sites, trails, interpretation and education,
    fishing, and heritage. The following are examples of typical
    projects:
        Region 1, Montana, Flathead River Access: Reconstruction of
    rest rooms, boat ramp, and parking lot.
        Region 2, Colorado, Maroon Valley: Reconstruction of three
    campgrounds, entrance station, three trailheads, trails,
    parking lots, signs, and shelters.
        Region 3, Arizona, Sabino Canyon Interpretive Sites:
    Reconstruction of the parking lot and the environmental
    education and interpretive facilities.
        Region 4, Utah, Great Western Trail: Construction of five
    trail segments, trailhead, signs, revegetation, and
    interpretation.
        Region 5, California, Taylor Creek Stream Profile Chamber:
    Reconstruction of the building to conform with the Americans
    With Disabilities Act, revision of the interpretive exhibits,
    and rehabilitation of the trail.
        Region 6, Washington, Johnston Ridge Observatory Exhibits:
    Construction of interpretive and educational exhibits in the
    Mount St. Helens National Volcanic Monument.
        Region 8, Texas, Cagle Sanitation: Construction of a sewer
    treatment facility for a new recreation complex.
        Region 9, West Virginia, Seneca Rocks Excavation:
    Excavation of prehistoric site and development of the
    interpretive plans for proposed construction of a Visitor
    Center.
        Region 10, Alaska, Starrigavan ATV Trail: Construction of
    two loop trails and a parking lot; rehabilitation of existing
    logging roads; and replacement of a bridge.

                      road construction and reconstruction

        The administration proposes to reduce funds for road
    construction and reconstruction by $6.7 million.
        Question. The Agency reports a road reconstruction backlog
    which is estimated to be between $4 and $5 billion. The most
    urgent roads in need of reconstruction total approximately $403
    million. Despite this backlog, the administration proposed a
    funding level of $86.3 million which is less than the lowest
    increment proposed by the agency. Concurrently the
    administration proposes a $17.6 million dollar increase in the
    timber sales management and salvage programs over the agency
    request. This appears to be inconsistent. How can the agency
    meet future timber offer goals if the volume is prepared for
    sale but the road system is not in condition to support the
    volume removal?
        Answer. Funding for roads backlog must be balanced against
    the need for funds for other Forest Service programs and the
    need to balance the budget.
        The proposed budget assumes fewer sales in roadless areas
    and the need for less timber road support funding.
        Funds for timber roads are adequate to administer road work
    on existing sales and to prepare surveys and designs for fiscal
    year 1998 green sale program of 2.505 MMBF. Engineering support
    needed for out year sales, including transportation planning,
    design, rights of way and bridge reconstruction and
    construction, will be provided to the extent possible. The sale
    program will be located to the extent possible to minimize road
    requirements. While every effort will be made to meet planned
    sale levels, some out year sales may be delayed.
        Roads support for salvage sales is funded from salvage sale
    funds so that program is not affected by the reduction of road
    funds.
        Preparation and administration of timber sale road
    maintenance is a relatively small portion of the road
    maintenance program and the actual maintenance is funded as
    part of the timber sale appraisal. The reduction in road
    maintenance funding is not expected to impact the timber
    program in fiscal year 1998.
        Question. The agency budget justification states that
    direction is to ``minimize entry into roadless areas.'' In July
    1996, the Secretary placed restriction on salvage sale
    preparation which excluded volume in inventoried roadless
    areas. Why is the Administration continuing to avoid
    development and management of roadless areas which are
    available for timber production and which are considered as
    timber lands in the Forest planning process?
        Answer. First, in regard to the Secretary's July 1996
    restriction, the restriction applied to only those sales that
    were not considered emergency. The prohibition did not apply if
    salvage sales qualified under the definition of ``imminently
    susceptible to fire.'' Trees ``imminently susceptible to fire''
    were trees located in areas with high fuel loading or where
    there was a high fire risk rating for the specific habitat
    type, and near local communities or occupied structures.
    Proposed sales in areas with high fuel loading or where there
    is a high fire risk rating for the specific habitat type, but
    that are not near local communities or occupied structures, are
    to receive priority consideration for offering under the normal
    timber program authorities according to the July, 1996
    direction.
        Regarding the budget justification statement, the Forest
    Service is placing a high priority on regaining trust by the
    public by collaborating with them as timber sales are proposed.
    We know that roadless area entry is often controversial, so the
    focus is on areas outside the roadless area for the most part
    to increase the likelihood of rebuilding trust. As noted in the
    statement however, entry into roadless areas will continue.
        Question. The agency's request for road construction funds
    was reduced $19.2 million by the Administration. How does this
    action by the Administration affect road construction plans in
    fiscal year 1998? Will access to specific roadless areas not
    occur due to this action? If so, what areas?
        Answer. Funding for the recreation and general roads
    programs is adequate to serve the immediate needs for these
    programs. However, a large backlog of road and bridge
    reconstruction needs exist in these areas. This backlog is
    expected to increase in fiscal year 1998.
        The proposed budget assumes fewer timber sales in roadless
    areas. Agency direction is to minimize entry into roadless
    areas. The impact on access to specific roadless areas has not
    yet been determined.
        Question. In response to subcommittee questions for the
    fiscal year 1997 process, the agency stated that it is no
    longer tracking the status of maintenance backlog. The fiscal
    year 1997 testimony provided data on road construction and
    reconstruction backlog for fiscal year 1994. No data was
    provided for fiscal year 1995 because the elimination of
    backlog data in favor of developing an ``infrastructure data
    base.'' However, a February 7, 1997 briefing paper states that
    this data base will be able to provide an updated shortfall
    estimate for all but the roads component. In view of this
    statement, how will the agency track backlog for the road
    component and be able to provide the appropriate level of
    backlog information for the Subcommittee?
        Answer. At present, the Infrastructure team is developing a
    Travel Routes module for the new IBM platform. The intent of
    Travel Routes is to provide an integrated information
    management environment for managing the inventory database of
    national forest system roads and trails. The Travel Routes
    module prototype is planned to be made available for testing in
    August 1997. It should be released for use in 1998. The Travel
    Routes module will include information fields to track backlog
    data for roads. Travel Routes will be the information
    management system used to provide backlog information, however
    additional time will be necessary to allow Forests to input
    field data before the system is fully operational and can
    provide meaningful reports and summaries.
        Question. The agency refers to an increasing number of
    roads being obliterated. What has been the predominant use of
    these roads (timber, fire, recreation, etc)? Will the
    recreation public be impacted by the obliteration of these
    roads?
        Answer. Predominately, the roads being obliterated are un-
    engineered roads that are causing serious environmental damage
    due to poor location, steep grades, and lack of proper
    drainage. They are mostly old skid trails, off-road vehicle
    tracks, and timber or mining roads constructed by operators to
    access and remove the resource without the benefit of current
    design standards for public safety and environmental
    protection. Many have been closed to vehicle use already. They
    are not needed for the management of NFS lands and are being
    obliterated to reduce erosion and to enhance ecosystem
    management.
        The impacts to the motoring public is generally expected to
    be minimal because most of the roads to be obliterated are
    already closed to motor vehicle use. Some obliterated roads
    will still serve non-vehicular uses such as hiking or horse
    riding.
        Question. Recent storm damage in the western states caused
    significant damage to watersheds as a result of road failures.
    How does the agency budget proposal address road system
    modification to avoid future significant damage of this kind?
    Will current design standards and costs be affected by findings
    from an assessment of this storm damage?
        Answer. The budget was developed to implement the best
    available low volume road design technology and to meet the
    standards and guidelines of the Northwest Forest Plan and
    similar regional planning efforts in the Columbia Basin. These
    strategies seek to minimize the influence of roads on hillslope
    hydrology, fisheries, and downstream values. Lessons learned
    from recent flooding will be incorporated in design standards.
        We are studying the impacts of these recent floods to see
    how we can prevent damage in the future. Region 1 is conducting
    landslide assessments which will provide tools for better road
    planning and location and will also identify roads for
    obliteration. Region 6 is cooperating with the State of Oregon
    in flood damage assessment to identify road location, design,
    and construction factors related to storm damage. A Water/Roads
    Steering Committee was formed to guide selection of technology
    development projects related to water and roads interaction.
    Environmental standards for drainage, culverts, and bridge
    construction dictate increased design lives for reduced
    environmental impact. Risk assessments and Access and Travel
    Management planning are identifying and prioritizing roads not
    needed for long term forest access so they can be obliterated.

                               trail construction

        The Administration proposes an increase in trail
    construction funds of $5.5 million.
        Question. The agency says 90 percent of all trail funds
    will be used for trail reconstruction. Assuming the President's
    budget is allocated for construction, what is the comparison of
    planned fund use between wilderness and non-wilderness trails?
    What is the cost per mile for trail reconstruction in the
    wilderness versus non-wilderness?
        Answer. Ninety percent of trail re/construction funds were
    indicated to be used for reconstruction and addressing the
    backlog of deferred maintenance. The ratio for reconstruction
    of trails inside and outside wilderness will be determined by
    the forests in each region. We estimate that wilderness trail
    miles to be reconstructed will be will be 15-25 percent of the
    total trail miles, and will receive approximately 25-40 percent
    of the trail re/construction funds. The average cost per mile
    for trail re/construction is $7,000 in the eastern U.S.,
    $20,000 in the western U.S., and $142,500 in Alaska, with costs
    varying depending on the type of soil or rock, the number and
    type of bridges, culverts, water bars, or other structures, and
    the accessibility to trail sections. Costs for operation,
    maintenance and re/construction in wilderness can be
    approximately 60 percent higher due to the remoteness of work
    sites within wilderness and requirements by the Wilderness Act
    that non-motorized, primitive tools and techniques be used in
    wilderness administration. The nature of wilderness activities
    results in increased travel and person time to operate and
    maintain.
        Question. The agency budget justification refers to a
    reconstruction backlog of $267 million. The fiscal year 1997
    agency testimony to the Subcommittee also refers to a backlog
    of $267 million. With the President's budget not being met in
    fiscal year 1997 can it be assumed there was no additional
    backlog during fiscal year 1997? Agency trail reconstruction
    backlog was listed as $267 million in Fiscal years 1996 and
    1994. Please update the backlog figure or explain why it has
    remained level.
        Answer. Backlog continues to accumulate. You are correct
    that the backlog figures have not been updated since 1994. The
    Forest Service is instead, concentrating our limited resources
    (both dollars and people) on implementing a new infrastructure
    data base which should give an accurate picture of Agency
    backlogs.
        Question. The agency justification refers to hiking and
    backpacking as the two fastest growing outdoor activities. What
    percentage of use occurs between wilderness and non-wilderness
    hiking experiences?
        Answer. In ``Outdoor Recreation in the United States''
    (Cordell and Super, April 1997), hiking increased 93.5 percent
    and backpacking increased 72.7 percent. The Forest Service does
    not maintain separate figures for wilderness versus non-
    wilderness hiking experiences.
        Question. How much of the proposed increase in trail
    construction funds are planned as a result of expected
    increases in recreation use attributable to the 2002 Olympics?
    What specific partnerships have been developed for this effort?
        Answer. The Intermountain Region, which includes Utah, has
    a fiscal year 1998 initial allocation of $2.6 million in trail
    re/construction funds--about a half million more than fiscal
    year 1997. The Region estimates approximately $400,000 of the
    fiscal year 1998 trail re/construction budget will be used for
    trail associated with the 2002 Olympics. Partners contributing
    cash, materials, or labor in kind or all three include:
    Snowbasin Ski Resort; Utah State University; Uinta Visitor
    Association; Utah Dept. of Natural Resources; ISTEA funds;
    Idaho Department of Transportation, and Blaine County
    Recreation District for the Boulder Mountain Trail, and
    potentially the Great Western Trail Association for the Upper
    Goosberry Trail.
        Question. What portion of trail construction and
    reconstruction funds are specifically targeted for persons with
    disabilities? What is the past 3-year history for this type of
    expenditure?
        Answer. Typically an average of 10 percent of trail re/
    construction funds are targeted for universal access, including
    such improvements as hardened surfaces, access to fishing,
    parking lot and toilet improvements at trailheads, and access
    to interpretive trails.

                         purchaser road credit program

        The administration proposes to eliminate the use of
    purchasesr road credits.
        Question. A letter from the National Association of
    Counties states that the Forest Service proposal to eliminate
    purchaser road credits will reduce county revenue by an
    estimated $12.5 million. Is it true that by eliminating use of
    purchaser road credits, less funds will be available for
    distribution to states and counties? If so, what steps can be
    taken to mitigate this problem?
        Answer. In fiscal year 1996 the purchaser road credits was
    $41,290,899; therefore, eliminating the purchaser road credits
    program would reduce the payment to the states (counties) by
    estimated $10,322,724 per year. However, the Administration is
    very concerned about the effects on payments to states and
    support holding the states and counties harmless from any
    reductions.

                           midewin tall grass prairie

        Question. The formal transfer of land from the military to
    the Forest Service did not occur until recently. What is the
    current status of management plans to open the Midewin to
    public use. How will such use be phased in? Is attention being
    given to those functions which will provide the most service to
    the public and which will maximize receipts?
        Answer. A comprehensive management plan for the Prairie is
    in progress that will address public access and use. In the
    meantime, a business plan to implement a Recreation Fee
    Demonstration Pilot at Midewin has been completed and submitted
    for approval by the Regional Forester. Prior to construction of
    visitor facilities, public use will be under permit for such
    activities as wildlife viewing tours and limited forms of
    hunting. As construction of appropriate facilities is
    completed, these areas will also be opened to public use under
    the fee program. Service to the public is being provided where
    possible by those functions that are not in conflict with the
    basic purposes for which the Midewin National Tall Grass
    Prairie was established.
        Question. What is the status of the Midewin's organization
    in terms of staffing which will serve the public users? Is the
    Regional Office in Milwaukee providing the full range of
    support services?
        Answer. The Midewin is currently staffed with 18 persons
    from the Forest Service, Illinois Department of Natural
    Resources, and Will County Forest Preserve District. The FS
    employment includes the Prairie Supervisor, the Prairie
    Parklands Macrosite Coordinator, Law Enforcement Officer,
    Public Affairs Officer, Recreation/Lands Officer,
    Horticulturist, Planner, Clerk, Computer Specialist, and 4 not-
    to-exceed positions (receptionist, Computer Tech, Biology Tech
    and Volunteer Coordinator). Detailers also supply Midewin with
    services in order to accomplish the program of work. Actions
    are currently underway to fill a few vacant positions.
        The Shawnee National Forest, the Eastern Regional Office,
    and the Southern Region are providing administrative services
    to the Midewin. Kent Austin, Midewin Supervisor reports
    directly to the Regional Forester and the Regional Office works
    with Midewin like other Forest units to ensure program
    accomplishment. The majority of personnel, computer, purchasing
    and procurement services are provided by the Shawnee NF with
    technical assistance from the Regional Office, when necessary.
    The Eastern Regional Office also provides technical assistance
    in the lands, engineering, and law enforcement programs, and
    the Southern Region provides some contracting services. This
    shared services approach is in line with the Eastern Region's
    plan to streamline processes and cross boundaries where
    practical to provide Midewin with administrative services that
    are both more efficient and effective.
        Question. What is the estimated percent of lands from the
    Midewin which will be allocated to non-public uses such as
    agriculture, recreation residences, and other exclusive uses?
    What are the estimated receipts for these purposes?
        Answer. There will be no recreation residences or other
    similar exclusive uses located at the Midewin. The primary
    purpose of the Midewin National Tall Grass Prairie is to manage
    the land in a manner that will conserve and enhance the native
    populations and habitats of fish, wildlife, and plants. Until
    the planning process is completed, an estimate of the percent
    of lands that will have restricted public use will not be
    known.
        Question. Assuming the Recreation Fee Demonstration project
    is retained; when Midewin unit is fully functional, can it be
    expected that operations will be able to occur solely based on
    fees paid by the using public? What are operations cost
    estimates for this unit? What are income projections? What are
    the predominant expected uses?
        Answer. When fully operational, our objective is for
    Midewin to be able to function based entirely on user fees. The
    operations costs, income projections, and predominant expected
    uses will be highly variable until the planning process is
    completed, consequently estimates at this time would not be
    prudent.

                                    kv funds

        Question. What is the status of the KV fund nationwide in
    terms of cash on hand and to be collected, versus the cost of
    work to be accomplished with brush disposal funds?
        Answer. The cash on hand in Knutson-Vandenberg (K-V) Trust
    Fund accounts as of the end of fiscal year 1996 totalled
    approximately $106 million. In fiscal year 1997, $202 million
    was repaid to the K-V Trust Fund as partial repayment for K-V
    advances for emergency firefighting purposes. Additionally, we
    anticipate about $151 million from K-V collections from timber
    harvest during fiscal year 1997 bringing the total available
    balance to about $459 million. We assume that the second half
    of your question is aimed at knowing the cost of the K-V work
    to be accomplished in fiscal year 1997, rather than brush
    disposal work. We anticipate K-V expenditures for renewable
    resource work specified on sale area improvement plans will
    total approximately $218 million in fiscal year 1997.
        Question. What is the status of money ``borrowed'' from the
    KV fund for use in fighting fires during the 1996 fire season?
        Answer. Fiscal year 1996 began with a balance of $420
    million owed to the KV trust fund for prior year fire fighting
    costs. During fiscal year 1996, an additional $225 million was
    borrowed for emergency fire suppression.
        In fiscal year 1997, Congress appropriated $550 million in
    emergency funds which could be used to help replenish the KV
    fund. The President released $300 million thus far. Of this
    amount, $202 million was transferred to the KV fund. The other
    $98 million was retained in the emergency firefighting account
    to cover fiscal year 1996 obligations. Approximately $443
    million is still owed the KV fund.

                       land acquisition and land exchange

        Question. The Forest Service and Plum Creek Timber Company
    have apparently agreed on an exchange of land near the Alpine
    Lakes Wilderness Area. Based on the need to coordinate
    extensively with local publics what indicators do you have
    regarding the potential success of implementing this exchange?
        Answer. The Forest Service and Plum Creek Timber Company
    (PCTC) have signed an Agreement To Initiate a proposed land
    exchange in the I-90 corridor near the Alpine Lakes Wilderness.
        There is significant support from the environmental
    community for this exchange proposal. Most parties agree that
    Federal acquisition of many of the PCTC inholdings are in the
    public interest to protect endangered species habitat,and water
    quality; improve ecosystem management and provide recreation
    opportunities. There is also major support from Mountains to
    Sound Greenway Trust organization. This is an organization of
    key leaders from County Government, industry, environmental
    organizations and various other organizations in the Seattle
    area.
        Kittitas County has concern about losing additional tax
    base within the County. Almost all of the PCTC lands are within
    the County. However, recent conversations between the County
    Commissioners, Forest Service and Plum Creek indicate that the
    County may not oppose this exchange if revenue losses to the
    County are minimized.
        The Exchange proposal includes lands involving fourteen
    federally recognized tribes. There may be an issue with the
    tribes in regards to Treaty rights on the federal lands
    proposed to be exchanged.
        Forest Service and Plum Creek are starting the scoping and
    public involvement process. A letter with maps of the proposed
    exchange has been mailed to over 4,000 individuals and
    organizations asking for public input to this proposal. In
    addition, four public meetings will be held over the next three
    weeks to gather public comments on the exchange proposal. The
    agency will have a better feel of how supportive or non
    supportive the public is of this exchange proposal when we have
    completed the public scoping process.

                               general questions

        Question. The General Accounting Office states (GAO/OCG-97-
    2) that significant savings are not likely to occur when the
    Forest Service, Bureau of Land Management, National Park
    Service, and Fish and Wildlife Service share resources. The
    Congressional Budget Office states that significant savings can
    only occur when operational functions are consolidated. The
    Forest Service and BLM have collocated some offices and shared
    some space. What actual consolidation of functions are being
    considered by the two agencies? Is there any active
    consideration of functional consolidation occurring involving
    the 4 land management agencies?
        Answer. The Forest Service is evaluating and searching for
    ways to consolidate functions with other land management
    agencies, where feasible. Most consolidations of functions have
    been on a local scale with the Bureau of Land Management. For
    example, the BLM and FS may jointly fund the salary and
    expenses of a wildlife biologist to conduct work on both FS and
    BLM lands.
        The Fire and Aviation Staff in the Pacific Northwest Region
    has consolidated with the BLM Fire Staff to provide regional
    leadership for both agencies. Another example is on the Fremont
    National Forest, where the FS, BLM, USF&WL, and State of Oregon
    are operating a consolidated Interagency Fire Center. The fire
    organizations in the four land management agencies also work
    together by sharing information and resources.
        There are numerous examples of current and proposed
    consolidations of functions between BLM and FS. Specific
    examples are:
        Northern Region--the Idaho Panhandle National Forest
    receives range management expertise from BLM while the Forest
    provides engineering assistance to the BLM. These agencies also
    share Geographic Information Systems information. The Nez Perce
    National Forest provides cadastral, design, construction, and
    inspection engineering support for BLM.
        Rocky Mountain Region--in the next 3 to 5 years, the White
    River National Forest is considering a proposal to consolidate
    the functions of three Districts with BLM lands and will manage
    both BLM and National Forest system lands from these offices.
    The Forest may also create an Associate Forest Supervisor
    position who will oversee BLM interests, collocate the
    headquarters offices in Glenwood Springs (FS) and Meeker (BLM),
    integrate leadership teams, co-manage range allotments, share
    road maintenance equipment, share project or watershed level
    planning, develop common communications between agencies,
    monitoring standards, interagency map and integrate GIS.
        The San Juan/Rio Grande National Forest currently share
    four line officers who are delegated the authority to do
    business for both the FS and BLM. One is both the Associate
    Forest Supervisor (FS) and the Area Manager for the San Juan
    Resource Area of the Montrose District of BLM. The other three
    line officers, located in the San Luis Valley, have the full
    authority to manage respective geographic parcels of both FS
    and BLM Lands. The Forest also has a joint campground
    concessionaire contract with BLM that is administered by one
    agency.
        The FS provides all fire suppression and prevention for the
    San Luis Resource Area of the BLM and on some isolated parcels
    near Pagosa Springs. The BLM provides the Minerals expertise
    for all the FS lands in the San Luis Valley.
        BLM and FS are cooperating to build an Integrated Resource
    Inventory of the five million acres in southwest Colorado. An
    integrated Geographic Information System is also in the early
    phases and will allow a number of agencies to make decisions
    based on broad landscape level rather than individual parcels.
        The Forest Health Management Staff provides services to all
    federal land management agencies (BLM, DOD, NPS, BIA, and state
    foresters) in regard to detection, evaluation, suppression of
    forest insect and diseases. The Gunnision Service Center is
    jointly housed with NPS and BLM.
        The Pike/San Isabel National Forest's ``Trading Post'' with
    the BLM involves the sharing of office space, professional
    expertise, administrative support, telephones, data general
    computers, copy machines, typewriters. Many functions have been
    consolidated.
        Southwest Region.--The region, BLM, and NPS are involved in
    sharing fire control resources, including integrated buying
    teams, incident command system teams, dispatch, etc. The Region
    also shares training expertise and facilities with other land
    management agencies. The Santa Fe Supervisor's Office and the
    BLM also share office space and some common services.
        Intermountain Region.--The Region has numerous shared or
    consolidated functions with BLM. Agency engineers help design
    BLM offices and a growing number of joint Visitor Centers are
    shared with BLM.
        FS and BLM employees work together on efforts such as
    shared monitoring and inventory crews with states and BLM. The
    region is also involved in sharing other resources with BLM,
    such as road maintenance (including equipment), law
    enforcement, fire suppression activities with the National
    Inter-agency Fire Center in Boise, shared Dispatch Centers in
    Utah, Nevada and Idaho, and fire suppression property. A large
    effort is also ongoing with the Geometronics Service Center to
    share mapping services.
        Data bases, primarily resource, are shared with the states
    and Interior federal agencies. This includes shared research
    surveys with other agencies including BLM.
        Pacific Southwest Region.--The region is currently involved
    in sharing radio facilities, equipment, and other expertise
    with BLM. The Modoc National Forest provides a forklift and a
    conference room to BLM.
        Pacific Northwest.--The Rogue River National Forest shares
    computer equipment, realty appraiser, and road maintenance work
    and equipment with BLM and NPS. The Forest also provides excess
    property services, office space, and stream surveys for BLM.
        The Umpqua National Forest shares geotechnical engineering,
    engineering/resource geology, engineering design reviews of
    bridges, roadway structures and road designs, some heavy
    equipment, road maintenance, with Roseburg BLM Office. The
    Forest shares a recreation position with Eugene BLM and office
    space with Roseburg BLM.
        The Malheur NF shares office/reception with BLM/NPS/APHIS
    and shares GIS services with NPS, and provides fleet
    maintenance for BLM and NPS. The Forest shares a tribal
    liaison, trails manager, range conservationist, and
    archeologist with BLM, along with many other services.
        The Central Oregon Interagency Dispatch Center includes the
    FS, BLM, and Oregon Department of Forestry employees.
        The BLM, as well as the Deschutes and Ochoco National
    Forest archaeologists are working together to manage the
    heritage resources and customer service events, such as the
    Passport in Time, for the Deschutes Province as a seamless unit
    between FS and BLM.
        The Prineville BLM District and the Ochoco and Deschutes
    National Forests have collectively hired a person who works as
    the Tribal Liaison Officer for both FS and BLM.
        The Ochoco National Forest Fire Management Officer is a BLM
    employee who manages both the FS and BLM Fire program. The
    Administrative Officer for BLM is a FS employee who also
    continues to serve as the Ochoco National Forest Administrative
    Officer.
        The Prineville BLM District has approximately 13 FS
    employees performing work for the District, and the Ochoco
    National Forest has 2 BLM employees working on FS work.
        The FS and the BLM are working on developing a single
    firewood permit for all of Central Oregon's public lands; an
    interagency cooperative approach to range management; an
    interagency cooperative effort to manage the Federal Recreation
    services in Central Oregon; and we are studying shared
    administrative services, fleets, engineering services and
    leadership.
        The Regional Ecosystem Office is a joint interagency (BLM,
    FS, NMFS, EPA, BIA, NPS) consolidated office for implementing
    the President's Northwest Forest Plan.
        Eastern Region.--The region supports the ``America's
    Outdoors: Center for Conservation, Recreation and Resources'',
    an interagency natural resource center, located at the Eastern
    Regional Office in Milwaukee, Wisconsin. The center is jointly
    funded and managed by the Forest Service, Bureau of Land
    Management, and National Park Service. The center provides
    ``one-stop shopping'' for natural resource information,
    including trip planning, environmental education, and
    conservation projects. America's Outdoors was awarded the Vice
    President's Hammer Award in 1996 in recognition of its
    accomplishment in reinventing government.
        The Minnesota Interagency Fire Center, located in Grand
    Rapids, Minnesota, is multi-funded and managed by the Forest
    Service, National Park Service, and U.S. Fish & Wildlife
    Service, as well as the Bureau of Indian Affairs and the State
    of Minnesota. The Center provides coordination of emergency
    support for fires, floods, and other disasters within Minnesota
    and nationwide, on request, including firefighting crews,
    aircraft, supplies, and other needs. The Center also operates
    the Smokey Bear National distribution center.
        Research.--The Forestry Sciences Laboratory in Athens, GA,
    is sharing survey research technology, data sets, and report
    development with BLM and NPS.
        Question. In February 1997 the Department issued a report
    on Civil Rights at the Department of Agriculture. This report
    called for development of actions to alleviate real and
    perceived discrimination. (1) What action is the Forest Service
    taking to implement findings of this report? (2)(a) What action
    is the Forest Service taking to eliminate the large backlog of
    civil rights complaints? (2)(b) Some statements at recent
    listening sessions alleged that the Agency and Department are
    paying large sums of money to ``settle'' cases before they are
    properly adjudicated. What is agency position on settlement of
    EEO cases prior to full adjudication? (3) What are statistics
    for the past 5 years on agency payments for EEO complaint
    resolution (including civil settlements) and the number of
    complaints resolved as part of those settlements? What is the
    past 5 year data on pending complaints at the end of each
    fiscal year?
        Answer. The Forest Service is taking the following actions
    to implement recommendations in the Civil Rights report:
        In the next few months there will be considerable work done
    to implement the Secretary's Civil Rights Action Plan (CRAT).
    The USDA has 31 active teams currently assigned to implement
    the recommendations in the Secretary's civil rights report.
    Forest Service employees are serving on 16 of those teams which
    will provide the framework for all USDA agencies'
    implementation responses. Tom Thompson, Deputy Regional
    Forester for Resources from the Rocky Mountain Region, has been
    appointed to lead an Incident Command Team. The concept for
    this team is to mobilize resources to implement the report
    recommendations. Several Forest Service focus work teams have
    been chartered, under the direction of Tom Thompson, to develop
    implementation plans for specific portions of the CRAT report.
    Most of the specific actions identified in the CRAT report need
    to be implemented by the Forest Service. Some actions will
    require significant work while others may need minor civil
    rights program shifts and adjustments. The Forest Service is
    moving ahead with the implementation plans by working closely
    with CRAT teams in the Department.
        The Chief has met with all Regional Foresters and Station
    Directors and directed that they become personally involved in
    resolving all complaints within their authority. The Department
    has teams looking at employee and program delivery complaints.
    The goal is to resolve all complaints by the latter part of
    June 1997. The Forest Service is actively helping the
    Department achieve this goal and has assigned several employees
    to the Department's complaint team.
        Each Region and Station has established a ``rapid
    response'' team to seek resolution of its EEO complaints. The
    work of these teams is coordinated by the Washington Office
    Civil Rights Director and they are working in cooperation with
    the Department's Office of Civil Rights.
        The agency position on settlement of claims before
    adjudication is to work diligently with the Department to
    resolve all complaints to the satisfaction of the complainant
    and for the benefit of the government, when possible. Due to
    the length of time and costs involved in adjudicating
    complaints, our policy is to resolve complaints before
    adjudication, when possible. In cases where the complaint can
    be settled with little or no money involved and where
    continuing the case would further deteriorate relationships and
    incur substantial costs, settlement may occur prior to
    adjudication.
        Formal complaints are handled at the Department level. The
    Department coordinates with Forest Service units on settlement
    agreement terms, including payments. Compensatory damage claims
    over $2500 have been adjudicated by the Department of
    Agriculture. Settlement agreements have been signed with the
    understanding that documentation of claims would occur after
    the settlement. The documentation of claims, the investigation
    of claims, and the adjudication of claims have frequently taken
    months and even years to reach closure. The Forest Service,
    therefore, does not have all of the information needed to
    respond with any degree of accuracy regarding costs of
    settlement agreements.
        The number of formal EEO complaints filed, by fiscal year,
    are as follows:

    Fiscal year:
        1992..........................................................   104
        1993..........................................................   194
        1994..........................................................   249
        1995..........................................................   250
        1996..........................................................   194

        According to Department of Agriculture reports, the Forest
    Service has resolved 307 formal EEO complaints through
    settlement agreements during the period of fiscal years 1992--
    1996. However, data is not available by fiscal year.
        Question. In your January 6, 1997, remarks to Forest
    Service employees you stated that ``our financial and
    administrative houses must be in order.'' Many comments have
    been made about the negative state of the agency's financial
    records, including some members of the Senate who say the
    agency's records are ``a mess.'' What actions are you taking to
    get your financial house in order? How has your reduction of
    employment in the Washington Office affected this problem and
    the ability to fix it?
        Answer. Specific actions being taken include a joint effort
    between the Forest Service, the USDA Office of the Chief
    Financial Officer, and the USDA Office of the Inspector
    General, working as a team to address the issues necessary to
    correct deficiencies identified in the 1995 financial audit. A
    detailed action plan was developed by the team in December
    1996, which the Forest Service began implementing in January
    1997. These actions, combined with the implementation of
    revised general ledger software by the USDA and inputting data
    into the Forest Service automated real property information
    system, will address the issues identified by the OIG.
        The reduction of staffing in the Washington Office has
    resulted in the remaining workforce simultaneously dealing with
    the ongoing, current workload while integrating necessary
    changes to bring the Forest Service financial house in order.
    At the Washington Office, field personnel from throughout the
    Agency have been called upon to assist in making necessary
    changes and improvements.
        Question. What is the status of implementation of the IBM
    computer equipment to replace the Data General? How far behind
    schedule is this effort? In light of the very fast
    transformation of information technology, will the equipment
    still have a reasonably functional life once fully implemented?
        Answer. The Forest Service requested a waiver from the USDA
    Information Technology Investment Moratorium on April 18, 1997,
    to proceed with implementation of Project 615. The waiver was
    received on May 1, 1997, and orders were submitted to IBM to
    begin implementation.
        We are now back on schedule to be fully implemented by
    fiscal year 1999. The delay caused by the USDA Moratorium can
    be regained this fiscal year by expediting orders through the
    summer. The combined orders, when added to the installed base
    of 5000 workstations, will equip about 16,000 total employees
    by the end of fiscal year 1997. In fiscal years 1998 and 1999,
    we will provide access for approximately 7,000 users per year
    to complete the implementation.
        We have continued contract updates with IBM ensuring that
    the technology is regularly refreshed and is providing a
    technology and price/performance level better than that
    originally provided in the contract. This approach ensures that
    the contract contains up-to-date technology appropriate to the
    requirements of the Forest Service. In addition, we are
    integrating personal computers into the IBM system architecture
    bringing it up to contemporary standards. By taking advantage
    of this well-integrated technology, the Forest Service will
    have the broadest range of modern technology to meet its
    business requirements.
        Question. The Forest Service has invested a great deal of
    funding in re-engineering processes. What specific reductions
    in FTE's can be attributed to specific re-engineering of
    administrative processes.
        Answer. The reengineering efforts for the Agency are aimed
    at reducing overhead costs by consolidating some Forest
    administrative offices, and at improving efficiencies by
    improving work processes and delegations to enable us to
    effectively accomplish our mission. However, FTE reductions
    have not been tied directly to reengineering efforts, but more
    so in response to the Administration's (NPR) overall direction
    to reduce the number of administrative positions. Since 1992,
    the Forest Service has reduced its administrative workforce by
    15 percent.
        Question. Despite numerous efforts to reduce field level
    personnel organizations, fully operational Personnel Management
    organizations exist on most National Forests and in every
    region. Extensive efforts to streamline the organization has
    failed to consolidate functions and reduce Personnel Office
    substantially. What is the current level of FTEs in the
    Personnel Management function by series for the past 5 years,
    and what is the number of full service personnel offices
    comparatively for the past 5 years? With general administration
    funds being reduced, why does the agency continue to maintain
    this number of offices?
        Answer. Many forests no longer have personnel offices. The
    agency is continuing to explore opportunities to reduce
    personnel offices, personnel employment, and costs. Since 1993,
    employment in the personnel disciplines has declined from 1,150
    full-time equivalents (FTEs) to 930 FTEs--an 18 percent
    reduction.
        The 5-year FTE employment for personnel disciplines
    follows:

    ------------------------------------------------------------------------
    Series         Title           1993     1994     1995     1996     1997
    ------------------------------------------------------------------------
       201Personnel                346      319      302      304      300
           management
           specialist
       203Personnel clerk/         496      444      401      383      368
           assistant
       212Staffing specialist       26       19       19       20       17
       221Position                  17       13       13       10        8
           classification
           specialist
       223Salary/wage                3        3        4        5        4
           administration
       230Employee relations        32       26       31       33       32
           specialist
       233Labor relations            6        6        5        8        6
           specialist
       235Employee                  33       35       28       24       23
           development
           specialist
       260Equal employment          70       65       64       58       57
           opportunity
          Other personnel          121      118      113      120      124
           related support,
           such as reception,
           typing, computer,
           et cetera
                              ----------------------------------------------
              Total               1150     1048      980      965      939
    ------------------------------------------------------------------------

        The number of personnel offices for the past 5 years
    follows:

    Number of personnel offices

    1993..............................................................   115
    1994..............................................................   114
    1995..............................................................   117
    1996..............................................................   126
    1997..............................................................   104

        The agency is actively reducing the number of personnel
    offices and saving money, and will take every practical
    opportunity to continue with these efforts. The cost associated
    with transfers, reduction-in-force, or retraining employees is
    often greater than the savings realized through consolidation,
    not to mention the adverse effects it would have on morale and
    productivity. In the past year, we closed 22 personnel offices.
    We expect this trend to continue at minimal expense to the
    taxpayer.
        Question. What specific action will be taken to improve
    financial management weaknesses identified by the General
    Accounting Office and the Office of the Inspector General?
        Answer. Specific actions which will, or have been taken to
    address shortcomings in financial management at the Forest
    Service occur in several broad areas. To date, we have made
    much progress, including:
        Formation of the Financial Health Task Group comprised of
    staff from the Forest Service, the Office of the Chief
    Financial Officer, the Office of the Inspector General, and
    occasionally including a representative of the General
    Accounting Office. This group provides continuing oversight to
    assure that actions occur.
        The Financial Health Task Group caused the creation of a
    financial health plan covering broad areas, and published that
    document during December 1996. That plan was supplemented by
    all of the Regions and Stations during February and March, and
    is the basis for on-going monitoring visits by the OIG
    consultants tasked by the Financial Health Task Group.
        The Financial Health Task Group also caused the creation
    and publication of a Desk Guide to be used by the Forest
    Service staff in addressing the areas of weakness. That guide
    was distributed during June, 1997, and provides in one concise
    document all of the information necessary for staff working on
    improving the quality of financial management information.
        In the area of Accounts Payable, and Accounts Receivable,
    permanent solution is not possible until the Department's
    Foundation Financial Information System (FFIS) is operational.
    This system will begin pilot testing in one-third of the Forest
    Service units on October 1, 1997. If it is successful, it will
    be expanded to the remainder of the Service on October 1, 1998.
    In the interim, the Financial Health Desk Guide provides
    detailed instructions on how to properly handle both payables
    and receivables.
        In the area of Revenue and Reimbursements there have been
    several changes. Part of Forest Service's data quality problems
    came from an automated process used in prior years at year end.
    That process has been discontinued as it created more
    difficulties than it solved. The publication of the desk guide
    referred to above provides detailed instructions as to how to
    code these types of transactions properly, and that has been
    distributed to all units. Finally, considerable attention has
    been given to making certain that the units get their records
    corrected and current.
        In the area of Property, Plant, and Equipment, there have
    been several actions taken to improve data quality and systems.
    The USDA will shortly issue revised instructions as to the
    capitalization threshold for Real Property. Forest Service is
    in the final stages of creating an automated subsidiary ledger
    (INFRA) which will capture information on all constructed
    features on a national forest. This data will include both cost
    and depreciation information. We expect that this system will
    be operational beginning in fiscal year 1998, and will have
    accurate, inventoried data by the end of that fiscal year.
        Personal Property is currently being inventoried, and we
    are expecting that by the close of fiscal year 1997, all of our
    inventories will be up-to-date. The Department has published a
    change to the capitalization threshold to $5,000, which has
    been implemented by the Forest Service.
        As stated above, the Financial Health Task Group has
    engaged the OIG as consultants to monitor and report back on
    the progress being made by the field units. The Inspector
    General reported to the Chief of the Forest Service in July
    that the results of the monitoring visits on three regions had
    shown ``significant improvement'' in the quality of
    information. These visits will continue until mid-August, at
    which time they will have visited each Region and Station in
    the Service. We have continuing discussions on the progress of
    the work, and expect the OIG to issue a final consulting report
    shortly after completion of the visits.
        Question. There are reports that payments for workplace
    disabilities (OWCP payments) cost the agency several million
    dollars per year. How much money is being paid for OWCP
    currently? What is the past 3-year history? What action is the
    agency taking to provide employment to former employees who are
    receiving OWCP payments in jobs they can perform? What specific
    savings have resulted from these actions? What action is the
    agency taking to eliminate current and former employee fraud
    relative to OWCP claims?
        Answer. We estimate that fiscal year 1997 OWCP costs for
    the agency will be $27,130,846. The costs for the 3 previous
    years were $25,665,054 (FY 1996), $26,924,938 (FY 1995), and
    $27,997,611 (FY 1994).
        The agency's OWCP program is designed to identify claimants
    who are likely to fully recover from their injury/illness,
    place them in positions they can perform while recuperating,
    and later return them to their original jobs. This program
    ensures that a position is reserved and offered when claimants
    recover. We have also established four full-time Workers'
    Compensation Program Manager positions in the field. These
    positions focus on reducing long-term claims and costs through
    rehabilitation and reemployment of claimants. We continue to
    try to place the employees in positions that they can perform.
        Our Workers' Compensation Program Managers are actively
    working with claimants and personnelists to eliminate current
    and former employee fraud by reviewing all long-term claims,
    controverting claims that are not clearly job-related, and
    ensuring, when appropriate, that third party recovery is made.
    In the past 3 years, it is estimated that these cost reduction
    efforts have saved $2.5 million.
        Question. How has the agency integrated the Government
    Performance and Results Act into it(s) performance measures for
    accomplishment in the fiscal year 1998 budget process? There
    does not appear to be a direct tie between accomplishments
    planned as part of the agency budget justification and the
    agency's draft fiscal year 1998 GPRA Performance Plan. For
    example, there is a difference in comparing fuel treatment
    acres in the budget justification, which plans accomplishment
    of 1,000 acres (total of brush disposal and hazardous fuels
    reduction), versus the GPRA action plan which proposes to treat
    1,250 acres. In the recreation management program there appears
    to be no tie between accomplishment measures in the agency
    justification vs emphasis in the GPRA action plan.
        Answer. In July 1996, the Forest Service submitted to the
    Department of Agriculture a list of performance goals and
    indicators with planned accomplishment levels consistent with
    its Agency Request (i.e., highest budget request level). These
    goals, indicators and planned accomplishment levels were
    incorporated into the agency's draft annual performance plan
    for fiscal year 1998. At the same time, planned accomplishments
    for these indicators were being adjusted to reflect the program
    funding levels in the fiscal year 1998 President's Budget.
    These adjusted planned accomplishment levels were displayed in
    the agency's Budget Explanatory Notes. This is the source of
    the discrepancy between some of the numbers in the Explanatory
    Notes and the Draft Performance Plan.
        Question. With the intent to implement GPRA in fiscal year
    1999, will the tie between GPRA and the annual budget
    justification be readily apparent?
        Answer. Yes. It is the agency's intent to integrate GPRA
    performance goals and indicators into all steps of the budget
    process including budget justification.
        Question. With full implementation of GPRA, will the agency
    realize any efficiencies by reducing work on other planning or
    accomplishment efforts?
        Answer. We feel that the strategic planning and annual
    reporting processes required by GPRA are quite compatible with
    similar requirements the agency has under the Forest and
    Rangeland Renewable Resources Planning Act (RPA). The GPRA
    requirement to develop an annual performance plan has also been
    integrated into the agency's budget process. As a result,
    existing staffs should be able to handle the GPRA workload but
    we expect no budgetary or personnel savings from this effort.
        Question. What are the anticipated effects of the
    Administration's initiative to place former welfare recipients
    in Forest Service positions? Will field level accomplishments
    be affected?
        Answer. The Forest Service estimates that we can hire at
    least 37 welfare workers per year from the welfare rolls for
    the next four (4) fiscal years. This is not expected to affect
    field level accomplishments.
                                    ------

             Questions Submitted by Senator Ben Nighthorse Campbell

        Question. It appears that the USFS is phasing out the
    Timber Salvage Sale program in favor of a new Forest Ecosystem
    Restoration and Maintenance Fund. What does this mean for the
    timber industry? Do you plan to utilize more controlled burning
    to restore forest health at the expense of using timber sales
    to remove salvageable timber?
        Answer. There is no intent to phase out the salvage sale
    program. Rather, the objective is to create a tool to better
    manage the entire land base.
        Question. How will your Wildland Fire Management program
    improve the control of wildfires that seem to be increasing in
    number and intensity in western forests.
        Answer. We have focused a major portion of the wildland
    protection program at increasing the funding and treated
    acreage of hazardous fuel reduction. The large build-up of
    fuels throughout the western forests increases the probability
    for large, catastrophic fire. Reducing fuels, through
    mechanical treatments or the use of prescribed fire will result
    in smaller, less intense fires. This emphasis will require many
    years of fuel treatments to realize the benefits of such a
    program. It is also necessary to maintain a strong preparedness
    organization to quickly and effectively suppress fires, thereby
    preventing them from becoming large.
        Question. It appears that the elimination of the
    ``Purchaser Credit Program'' will require that timber companies
    will be responsible as usual for the cost of construction of
    roads. However, the requirement that they pay these costs up-
    front may cause serious financial problems for smaller
    operators. Don't you think this will cause even more of these
    small family businesses to be unable to compete for timber?
    This will also result in lower bids on timber sales. Won't this
    also reduce the payments going back into the county governments
    in lieu of taxes?
        Answer. The administration's proposal would both retain the
    Purchaser Election Program for small purchases and hold the
    states harmless from any losses in payments as a result of the
    elimination of the Purchaser Credit Program. We urge the
    Congress to adopt these proposals.
        Question. I am concerned that the increased funding going
    to the President's Forest Plan for the Pacific Northwest is
    taking funds away from other Regions. Region 2 Regional
    Forester, Elizabeth Estill, has indicated the need for
    additional funding to rebuild the timber sale pipeline in her
    Region. I understand that you are further reducing the proposed
    timber harvest in Colorado which already is having a difficulty
    maintaining an industry. Are you diverting funds from Region 2
    to go to the Pacific Northwest?
        Answer. No. The fiscal year 1998 agency request did not
    reduce the allocations to regions and forests not covered by
    the PNW Plan in order to meet the PSQ in the PNW Plan. The
    Administration recognized this cost and chose to provide
    additional funding in the President's Budget versus not meeting
    the PNW Plan or reducing other regions and forests to pay for
    meeting the PNW Plan.
        Question. Why is USFS research in Colorado being downsized?
        Answer. During fiscal year 1996, Rocky Mountain Station
    reorganized the four ecological RWU's in Fort Collins, Colorado
    into two units. This was done for two reasons; (1) to reduce
    the number of supervisory positions (Project Leaders) needed
    from four to two, thus freeing up more funds for actual
    research; (2) to create multidisciplinary units, more suited to
    addressing the complex questions that need to be answered in
    taking an ecosystem approach to wildland management. Because
    the whole Station has only two forest entomologists and two
    forest pathologists, and because of significant insect and
    disease problems in both the Southwest and the Central Rockies,
    during the reorganization, we matched scientists to research
    needs by relocating one entomologist and one pathologist from
    Fort Collins to the Flagstaff Arizona, Forestry Sciences Lab.
    To support this move, $340,000 in funds were reassigned from
    Colorado to Arizona.
        Prior to the reorganization, one scientist and one
    technician, who were located in Arizona, had actually been
    assigned to an ecological research unit in Fort Collins, and
    thus their funding was shown in Colorado even though they
    worked out of Arizona. As part of the reorganization, we
    reassigned them and $196,000 to a unit in Flagstaff Arizona.
        Another $28,000 reduction covers Rocky Mountain Station's
    share of increased support to accelerate research in
    President's Northwest Forest Plan. The final reduction of
    $75,000 in RWU-4803 reflects reassignment of the last of the
    Southwestern Consortium funds from the Station's headquarters
    to laboratory in Albuquerque New Mexico. No personnel moves
    were associated with these funds.
        Total Reduction: $639,000.
        Question. What is the methodology utilized by the USFS to
    determine the number of recreational user days?
        Answer. The Forest Service tracks recreation use by
    Recreation Visitor Days (RVD's) and by Visits. A RVD is a
    statistical reporting unit consisting of 12 visitor hours. A
    visitor hour is the presence of a person on an area of land or
    water for the purpose of engaging in one or more recreation
    activities during the period of time aggregating 60 minutes. A
    Visit is the entry of one person upon a national forest for the
    purpose of participating in one or more recreation activities
    for an unspecified period of time.
        Both RVD's and visits estimated by Forest Service field
    units and reported through a computerized reporting system.
    Various ways exist to display the information gathered: by
    Region and by State, by activity, and by year. Field estimates
    are based on the application of sampling techniques, traffic
    counters and other observation methods.
        The Forest Service is also experimenting with methods to
    improve recreation use estimates. A prototype process is
    currently being tested. It is intended to provide improved
    statistical estimate of recreation use on the national forests.
                                    ------

                  Questions Submitted by Senator Conrad Burns

        Question. Do agencies expect to meet this target in fiscal
    year 1997 as scheduled?
        Answer. The USDA Office of Forestry and Economic Assistance
    recently provided information relevant to this question in the
    report ``The Northwest Forest Plan: A Report to the President
    and Congress'' (issued December, 1996). The 1.053 billion board
    foot level included the initial probable sale quantity (PSQ) of
    958 million board feet plus an additional 10 percent of ``other
    wood.'' As noted in the 1994 Final Supplemental Environmental
    Impact Statement, ``sustainable sale estimates will be made
    using more refined data and procedures available when Draft
    Forest and District Plans are completed or current plans are
    revised.'' (FSEIS, page 3&4-267). Some individual national
    forest and BLM district plans have been completed since
    implementation of the Pacific Northwest Forest Plan and the PSQ
    has been revised as a result. The December, 1996 Report to the
    President and Congress now sets the PSQ at 868 mmbf, and total
    projected levels at 954 mmbf if you include ``other wood''
    (page 103). It notes that further adjustments could be made as
    more plans are revised in the future. The Forest Service
    intends to fully meet its part of the current PSQ projections
    in fiscal year 1997.
        Question. What are your plans to meet the decade target?
        Answer. The report ``The Northwest Forest Plan-A Report to
    the President and Congress'' also addresses your question
    relative to the ``decadal target.'' At page 103, it states that
    ``the agencies expect to meet the average annual probable sale-
    quantity goals over the 10-year life of the Plan because the
    volume that wasn't offered during the first 3 years of the
    Plan, as the agencies were reestablishing the program, can be
    offered over the remaining 7 years.'' Please keep in mind that
    the PSQ could be further modified as forest plans in Oregon and
    Washington are revised, which would affect the total volume
    offered over the decade.

                           forest health and salvage

        Question. Are funds available in the Forest Service budget
    to aggressively prepare and offer salvage sales in fiscal year
    1997? How much salvage volume has been offered under the
    salvage law to date and how much do you project will be offered
    by the end of this fiscal year?
        Answer. Yes, there are currently sufficient funds in the
    Salvage Sale Fund to continue the program. The increase in
    salvage expenditures from the emergency salvage sale provisions
    did reduce the fund to a low level; however, the receipts from
    additional volume sold is replenishing the fund. The recent
    decline in timber prices has also reduced collections. Regions
    1, 3, 4, and 5 started fiscal year 1997 with less than
    desirable cash balances. Projections indicate that 1997
    collections will be sufficient to maintain the program in
    fiscal year 1997. Even though our policy is to limit each
    region's fiscal year expenditures to their previous fiscal
    year-ending, unobligated balance, Regions 4 and 5 have
    requested approval to use a portion of their fiscal year 1997
    collections for salvage sale preparation in fiscal year 1997.
    We are looking at these requests to see whether remaining
    collections in fiscal year 1997 will be sufficient for these
    two regions such that their ending fiscal year 1997 balances
    are sufficient to support a reasonable salvage program in
    fiscal year 1998. If there are unexpected additional
    expenditures in fiscal year 1997, and continued low stumpage
    prices, then this could cause problems in the unobligated cash
    balances for fiscal year 1998.
        A total of 4.606 billion board feet of salvage was offered
    under the salvage amendment, including 818 million board feet
    which was offered the first quarter of fiscal year 1997. The
    amendment expired on December 31, 1996.
        Though the salvage amendment has expired, an additional 600
    million board feet of salvage will be offered under current
    authorities during the rest of the fiscal year.
        Question. Do you share Secretary Babbitt's view that all we
    need to do is more prescribed burning and can we solve the
    forest health crisis on our national forests?
        Answer. Acting on the recommendations of the Federal Fire
    Policy Review in 1996 the Forest Service is expanding the fuels
    reduction programs. We agree that the use of prescribed fire is
    one of the most effective tools in restoring the health of our
    forests and rangeland. The Forest Service is working toward a
    target in the year 2005 of applying hazardous fuels reduction
    treatment on 3,500,000 acres. In fiscal year 1998, we plan to
    accomplish between 850,000 and 1,300,000 acres of fuel
    treatment. This represents a significant increase from 1996 and
    1997. Although a vast majority of these acres are expected to
    be treated with fire, some areas will need some type of
    mechanical treatment before fire can be safely utilized.
        Question. Has your agency evaluated the number of days in
    the year when forest fuel and air quality conditions are right
    to do prescribed burning and given those limitations can your
    agency accomplish Secretary Babbitt's optimistic targets?
        Answer. We anticipate that we will be able to carry out our
    fiscal year 1998 program of work for hazardous fuels reduction
    while meeting air quality standards. Local Forest Service fire
    managers and local authorities work successfully together to
    accomplish fire and land management objectives, resolve
    conflicts with smoke emissions, and comply with air quality
    standards. In addition, planning is underway to design larger
    and more efficient prescribed fire projects that take advantage
    of optimum burning conditions while significantly increasing
    acres treated.
        The Forest Service is also working with officials from the
    Environmental Protection Agency to assure compliance with air
    quality standards.
        Question. Has your agency assessed the risk of increasing
    the prescribed fire program on escaped burns, public safety,
    and financial liability?
        Answer. Every prescribed burn goes through a rigorous
    process which includes a risk assessment and prescribed burn
    plan which is approved by the local line officer. Public and
    firefighter safety are the agency's greatest concern. The risks
    and outcomes of wildfire far outweigh the risks associated with
    well planned prescribed fire. Prescribed fire will, in the long
    term, reduce the risk to public safety as well as the
    liabilities of additional prescribed fire applications.
        Question. The Administration is recommending changing the
    FS definition of salvage--the same definition that the agency
    has used for years. This, in my opinion, would have the affect
    of giving less flexibility and decision making authority to
    professionals in the field. Why do you want to do that?
        Answer. The salvage definition was changed by the Forest
    Service a couple of years ago to reflect the ecosystem
    management approach. It was tied to ecosystem improvement and
    rehabilitation by including dead, dying, damaged, and
    associated trees at high risk of spreading disease or insect
    epidemics. The new definition also clarified that salvage may
    include trees imminently susceptible to insect attack because
    of drought-related stress and trees lacking characteristics of
    a healthy and viable ecosystem. This definition is consistent
    with the National Forest Management Act. The salvage definition
    was also changed by the Recissions Act by including trees
    imminently susceptible to fire. This broadened the authority
    for using salvage during the period of the Rescissions Act.
        The Interagency Salvage Program Review team found that the
    definition of salvage was confusing to the public, and that the
    interpretation and application was not uniform across national
    forests and BLM districts. The proposed change would be to more
    clearly articulate the intent of salvage projects to the public
    and to provide consistent application.

                                forest research

        Question. The 1992 Blue Ribbon Coalition Report called for
    a 5-year inventory and analysis cycle. Since the 1992 report
    was issued the inventory cycle has gone in the opposite
    direction and has increased to an average of 10 years. What are
    the primary factors that have contributed to the lengthening
    rather than shortening of the inventory cycle?
        Answer. The current national FIA inventory cycle is now 12
    plus years. The cycle is controlled by three main factors; (1)
    a mandated accuracy requirement which determines the amount of
    data to be collected, (2) funding for personnel and equipment
    which determines the speed at which the data are collected, (3)
    funding for technology research and application which can
    increase efficiency and reduce the collection burden on
    personnel and equipment without sacrificing accuracy.
        The first controlling factor, accuracy, is required and
    necessary to provide quality information to make sound
    management decisions.
        The second controlling factor, funding, is the central
    issue. Since 1995, overall Forest Service Research program
    funding has declined 10 percent. During this same time period,
    FIA field program funding has increased by 3 percent. Clearly
    FIA is still a priority research program within the Agency but
    the modest increase in FIA funds have not been sufficient to
    offset the increased cost of getting personnel and equipment
    into the field. Continued funding at current levels will
    further erode the cycle unless new technology can bridge the
    gap.
        The third controlling factor, technology research, is
    difficult to maintain when cycles slip and demand for current
    information rises. However, scientifically sound research is
    critical to the application of any new technology or data
    collection method. With constrained budgets, FIA strives to
    maintain a balance between the potential gains in efficiency
    from development and application of new technology and the
    demand for shorter current cycles.

               interior columbia basin ecosystem management plan

        Questions. (a) How do you intend to incorporate the
    findings of the scientific assessment into management direction
    for on-the-ground activities? (b) Will the scientific
    information go through the NEPA process before being applied to
    the ground?
        Answers. (a) The Bureau of Land Management and the Forest
    Service have incorporated the findings of the scientific
    assessment into management direction in the Eastside Draft EIS
    and the Upper Columbia River Basin Draft EIS. Science underlies
    the construction of various alternatives. In addition, the
    agency field units are receiving training on the scientific
    assessment and its findings so that ongoing and planned
    activities will take the information into account during
    project-specific NEPA analysis. (b) Yes. The first place this
    occurs is in the draft EISs that were released in late May.
    Additionally, site specific NEPA review will occur when
    projects are developed for implementation by field units.
        Question. In a February 3rd letter to Regional Forester Hal
    Salwasser, the Eastside Ecosystem Coalition of Counties (EECC)
    state that due to the regulatory agencies involvement late last
    year, change to the draft EIS approved by the project's
    executive committee are ``unacceptable'' and ``the EECC cannot
    support the Project in the direction it is currently headed.''
    The Coalition stated that they would withdraw their support if
    the Project does not ``significantly redirect'' itself and have
    at least one alternative that truly directs active management
    without lengthy and burdensome processes. What changes in the
    draft EIS are being explored to address the counties' concerns?
        Answer. Several meetings which identified specific
    concerns, were held this year between Project representatives
    and Coalition members. In addition, Regional Executives met
    with the Idaho Association of Counties and listened to their
    concerns, along with numerous subsequent personal contacts with
    EECC members. In response to a February 3 letter from the EECC
    and these meetings, the Regional Executives: 1) decided to
    delay identifying a preferred alternative until concerns of
    County governments could be addressed; 2) responded to the
    counties by letter (dated February 24, 1997) with specific
    responses to the county concerns, including both clarification
    intent on some of the issues, and some changes to the draft
    EISs to address the counties' concerns.
        The Regional Executives and the EECC agreed to the
    following changes at a March 6 meeting: (1) rewrite one of the
    grazing standards; (2) differentiate between the forest
    riparian ``zones'' with respect to management objectives of
    forested riparian conservation areas and permitted activities
    therein for each zone; (3) refine definitions of the words
    ``protect'' and ``maintain'' as they apply in the draft EIS's;
    and (4) add language to the standard in the draft EIS's that
    specifies that road condition/risk inventories can be conducted
    in a manner appropriate for the scale of analysis (watershed
    scale v. larger subbasin scale) being completed. In addition,
    numerous clarifying changes were made in response to EECC
    comments.

                             real estate management

        Question. What is the current status of applications from
    inholders for access authorization to NFS lands for
    construction and/or use of roads? What has been the history of
    funding for processing of these applications in recent years?
        Answer. The Forest Service annually receives several
    thousand applications for new uses and occupancies of National
    Forest System lands. They include applications for access to
    inholdings within the National Forests. The agency has a
    significant backlog of applications from inholders for
    authorizations for the construction of access facilities (i.e.,
    primarily roads) across National Forest System lands. The
    agency has no current mechanism by which it catalogues or
    tracks the number of such applications currently on file and
    backlogged. Applicants for authorizations who have demonstrated
    a statutory right of access across National Forest System lands
    (to an inholding) have generally been provided a higher
    priority for processing and evaluation than those applications
    for uses not associated with such a right. Funding levels in
    recent years have been such that the agency has been able to
    properly administer only existing authorizations. We have been
    able to process only the highest priority applications for new
    authorizations. Generally, the agency is able to process
    applications when the applicant pays for some of the processing
    costs.

                                  forest roads

        Question. What impact will the elimination of Purchaser
    Road Credits have on the ability to meet the timber sale
    targets under the President's Northwest Forest Plan and meet
    your objectives for improving forest health?
        Answer. There will be little to no effects on our ability
    to meet timber sale targets or to meet our objectives for
    improving forest health, since the amount of road access is not
    affected.
        Question. Do you have enough funds to repair all the forest
    roads damaged by last year's record rainfall and flooding? If
    not, what impact will these unrepaired roads have on salmon
    habitat, fire prevention and suppression, recreation access,
    and timber sale access?
        Answer. Funds for emergency repair of Forest Service roads
    are made available through two sources: the Federal Highway
    Administration Emergency Relief Federally Owned (ERFO) road
    program and appropriated road funds in the Forest Service
    budget. Preliminary estimates of road damage indicates ERFO
    needs of $90 million to repair forest roads to pre-flood
    condition, needs of $12 million for road repairs that are not
    covered by ERFO, and needs of $10 million to fund additional
    road maintenance work caused by last years storms. As snow
    melts in the high country, we can access the damaged areas to
    do the field work necessary to complete the damage reports and
    provide better estimates for necessary road repairs. Additional
    damage reports are being prepared for roads damaged by more
    recent floods in South Dakota.
        Preliminary estimates of ERFO needs have been provided to
    the Federal Highway Administration and we are waiting for their
    decision on the funding. There is some question as to annual
    ERFO funding authority being sufficient to cover the total
    qualified work. Without funding approval, we will not be able
    to perform the work.
        Funding for non-ERFO repair needs were not included in the
    current year's budget. Congress recently approved a
    supplemental appropriation of $39,677,000 for the National
    Forest System (NFS) and $27,685,000 in reconstruction and
    construction funds for emergency expenses resulting from
    flooding. Without the supplemental appropriation, we would not
    have been able to complete the additional flood damage repairs
    without causing major disruptions to our regular program of
    work. Supplemental appropriations are adequate to cover 85
    percent of the highest priority needs for NFS damage identified
    as of May 1, 1997, including road maintenance, and the 71
    percent of the highest priority needs for reconstruction and
    construction identified as of May 1, 1997, including road
    repairs. The determination of road priorities in relation to
    other repair needs will be made at the regional level and may
    vary from region to region.
        Funding for our regular road maintenance program is
    provided through normal FS appropriated funds. Under the
    current funding levels we are able to maintain only forty
    percent of the forest system roads to the standards established
    for the current use. Funding the additional road maintenance
    needs caused by the floods from our regular appropriation would
    severely impact our already limited routine maintenance
    program.
        Without additional funds, repair of damaged roads will be
    delayed or left undone. Sediment derived from roads is the
    single largest source of non-point pollution in managed
    forests. Failure to properly maintain roads increases erosion
    and sediment inputs, particularly fine sands and silts which
    damage fish spawning and rearing areas for critical salmonids.
        Reduced access for fire prevention and suppression could
    require the expenditure of additional fire fighting funds to
    open roads for fire access. This will cause delays in response
    time, resulting in more acres burned by wildfires, unnecessary
    resource losses, and additional threats to life and property
    on-site and downstream.
        Roads posing significant safety or resource concerns will
    be closed until repairs can be made. This will cause lost
    recreational opportunities, continued erosion and resultant
    sediment impact on streams, lakes, riparian areas, and related
    fisheries and wildlife resources. Quantifying specific impacts
    is not possible within funding and time constraints provided.
        Question. You are recommending a $12 million cut in
    appropriated funds for roads and an elimination of the
    purchaser road credit program. This will cut the timber sale
    program by approximately 25 percent. Is this your intention?
        Answer. No, this is not our intention, and it will not cut
    the timber sale program by 25 percent. The proposed budget
    assumes fewer sales in roadless areas and the consequent need
    for less timber road support funding. Agency direction is to
    minimize entry into roadless areas, and proceed only where
    determined necessary through the NEPA process and public
    involvement.
        Funds for timber roads are adequate to administer road work
    on existing sales and to prepare surveys and designs for the
    fiscal year 1998 green sale program of 2.505 MMBF. This is the
    planned green sale volume for fiscal year 1998.
                                    ------

                  Questions Submitted by Senator Pete Domenici

        ``Attitude shift away from timber production'':
    Historically, the Forest Service has concentrated its resources
    on the production and sale of timber and pulp wood. Over the
    past decade, the number and size of timber sales has declined,
    and the Forest Service has shifted its focus to other
    activities such as recreation and wildlife management.
        Question. What steps has the Forest Service taken to
    accommodate this shift in emphasis away from its historic
    reliance on timber production and sales from National Forests?
        Answer. While timber management and timber sales are still
    important agency programs, the Forest Service has adopted an
    ecosystem management approach. Sustaining and restoring the
    health, productivity, and diversity of the ecosystem is
    essential to our ability to continue to provide multiple
    benefits from public lands.
        Question. Does the Forest Service expect recreation and
    related activities to continue to play an increasingly
    important role in forest management?
        Answer. Yes. Recreation use projections clearly show
    increasing demand for recreation opportunities on the national
    forests. Recreation use is expected to top 1.2 billion visits
    by the year 2040. Recreation is one of the key multiple uses
    provided by the national forests. Several million private
    sector jobs are associated with recreation on the national
    forests making it a key component of the National, and many
    local, economies. The growing importance of recreational
    opportunities in the national forest is being recognized in
    overall forest management.
        Question. What program and activities does the Forest
    Service expect to be available for on-the-ground management of
    renewable resources within the National Forest System?
        Answer. We anticipate continuing to provide a full
    complement of resource management activities on the ground in
    the future, as we do now, with no specific program deletions or
    additions being planned. We remain committed to the goals
    outlined in the Forest Service document ``Course to the
    Future'' which affirm the multiple-use principles of sustained-
    yield management which have guided National Forest System
    management for the last half of this century. Within that
    framework, National Forest System management today emphasizes
    maintenance of ecosystem health as well as restoration of
    deteriorated ecosystems in order to sustain the production of
    all the uses, values, products and services which derive from
    the national forests, including timber, forage, fish and
    wildlife, recreation, wilderness and water.
        Question. What kind of revenue-producing activities does
    the Forest Service anticipate will replace lost timber sales
    receipts that have historically supported forest management
    activities within the National Forest System?
        Answer. The agency does not have legislative authorities to
    use revenues generated from non-timber sale activities for
    forest management activities except deposits from timber sales
    to the salvage sale fund and the KV fund. These funds available
    in these accounts are sufficient to support the current program
    level.
        Question. What is the Forest Service currently doing to
    assist small rural communities in and near National Forests
    whose local economies have been devastated by declining timber
    production on which they have historically depended?
        Answer. The Forest Service is in its sixth year of
    implementing the ``National Forest-Dependent Rural Communities
    Economic Diversification Act'' through the Economic Recovery
    program. Since the beginning of the program in fiscal year
    1992, the Agency has gone from assisting 185 natural resource-
    dependent rural communities annually to over 800 in fiscal year
    1996 through Economic Recovery efforts alone. In recent years,
    the Economic Recovery program for dependent communities has
    received between 30 to 40 percent of the Economic Action
    Programs' appropriation. Other Economic Action Programs
    provided assistance to an additional 760 communities,
    businesses, or organizations in fiscal year 1996.
        From the Forest Service, rural communities have received
    direct financial and technical assistance to build local
    capacity to manage the challenges they face and to find
    sustainable solutions for economic, social, and environmental
    problems and opportunities. In addition to specific funded
    programs, the Agency has been able to offer much more
    assistance due to the presence of its employees and facilities
    in the communities.
        Many stories are being told of progress and change in rural
    communities around the country which have taken advantage of
    the Economic Recovery program: forming local, diverse community
    action teams, even in areas known for past conflict and
    divisiveness; creating strategic plans for increased self-
    sufficiency and other collective goals; improving relationships
    and increasing trust within communities as well as with the
    Forest Service and other communities, agencies, and interest
    groups; and taking responsibility for implementing plans and
    making their visions come true.

             fire suppression, presuppression, and fuels management

        The image of Smokey Bear has had a resounding impact on the
    attitude of the American public as it relates to National
    Forests and forest fires. The concentration of resources on
    fire containment and firefighting has resulted in something of
    a preoccupation with those activities, to the detriment of
    effective management of fuels that inevitably contribute to the
    catastrophic nature of many fires. In the President's budget
    request this year, the Forest Service proposes to consolidate
    the fuels management account and a considerable portion of the
    firefighting account.
        Question. How does the Forest Service believe this
    consolidation will improve their ability to reduce the
    catastrophic nature of wildfires when they occur?
        Answer. Changing the budget structure to allow greater
    flexibility in funding hazardous fuel reduction will allow the
    agency to take advantage of favorable weather conditions to
    significantly expand the number of acres treated. Hazardous
    fuel build-up is the single most important reason for
    catastrophic fires.
        Question. What activities does the Forest Service
    anticipate will receive increased priority with this
    consolidation?
        Answer. See Answer to No. 166. The primary focus will be to
    use prescribed fire wherever and whenever possible. However, to
    further reduce the risks and impacts of smoke associated with
    prescribed fire, mechanical pre-treatments will be necessary in
    many instances to allow follow-up treatments using prescribed
    fire.
        Question. How does this consolidation affect the ability of
    the Forest Service to plan for fire emergencies through the
    normal budget and appropriations process?
        Answer. The new budget structure provides increased
    flexibility in funding hazardous fuels reduction activities
    without detracting from the capability to prevent forest fires
    and to take prompt, effective initial attack suppression action
    on wildfire. The result is greater efficiencies, and over the
    long term, reductions in catastrophic fire and large fire
    suppression costs.
        Question. What impact will the consolidation have on the
    future need for emergency funding to supplement annual
    appropriations process?
        Answer. Funding needs for fire operations above the
    appropriated level would be accommodated from the government-
    wide emergency contingency account.
        Question. Does the Forest Service anticipate future
    emergency funding requests to support fuels management
    activities as a result of this consolidation?
        Answer. In the President's budget, hazardous fuels
    reduction is included in the Fire Operations budget line item.
    The proposed budget is estimated at $30-$50 million allowing
    greater flexibility to respond to timely and appropriate
    applications of fuel treatment prescriptions.

                           national forest foundation

        The authorization for National Forest Foundation will
    expire this year. I intend to introduce legislation in the near
    future to reauthorize the Foundation, enabling the continuation
    of the public/private partnerships for projects related to the
    management and conservation of National Forest resources.
        Question. What kinds of activities are supported by the
    National Forest Foundation?
        Answer. The National Forest Foundation (NFF) has supported
    many projects that benefit the Forest Service. Although the NFF
    was formed by Congress in 1990, its first full year of active
    work got underway in 1993 with primary emphasis on Youth Forest
    Camps. Since the initial year, the NFF's assistance to the
    Forest Service has increased significantly, ranging from the
    establishment of a firefighting fund and scholarships giving
    financial assistance to families who lost relatives fighting
    forest fires and the support of many reconstruction and
    restoration projects throughout the agency. A state summary of
    projects already completed, currently underway or planned by
    the NFF has been provided to the Subcommittee. This summary
    contains descriptions for each project funded, including the
    location, name and work accomplished or planned. Some of these
    projects were funded entirely by the NFF while many others were
    funded in partnership with other organizations that include
    individuals, corporations, not-for-profit organizations and
    state agencies.
        In addition, the NFF has developed five major program
    emphasis areas of; (1) forest conservation; (2) forest
    protection; (3) recreation; (4) wildlife and fisheries; and (5)
    environmental education. Specific projects are listed on the
    attached sheet entitled ``Preserving the Legacy'' which has
    been provided to the Subcommittee. The NFF will launch new
    initiatives this calendar year within these five program areas
    which will support additional projects in all regions of the
    Forest Service.
        Question. Over the past 5 years, what is the total amount
    of private support that has been leveraged by the activities of
    the National Forest Foundation?
        Answer. During the period 1992-1996, the National Forest
    Foundation has received $3,695,752 in cash contributions from
    private donors and $483,608 in private in-kind contributions
    for a total of $4,179,360 to support its mission and projects.
    During 1992, the first year of the 5-year period, there were no
    active solicitations of private funds. The National Forest
    Foundation's incorporation was completed in 1993 which was its
    first full year of operations.
        Question. Does the Forest Service have any recommendations
    for changes in the National Forest Foundation authorization
    that would enhance its ability to provide even greater benefit
    to the Service, its resources, and the American people?
        Answer. Yes. There are four recommended changes we would
    suggest be made to the authorization to add to the Foundation's
    overall effectiveness. Federal regulations governing
    disbursement of grants preclude advance funding for
    administrative or project expenses to the Foundation without
    regard to when the Foundation incurs these expenses. As a
    result, the Foundation must submit frequent request to the
    Forest Service for matching funds when such costs are incurred,
    causing inefficiencies and delays in funding. To streamline the
    process and provide funding on the ground in a more timely
    manner, we recommend that the Act be amended to authorize the
    transfer of Federal funds to the Foundation in a lump sum.
        Section 410(b) of the Act, which authorizes appropriations
    up to $1,000,000 annually in Federal funds to be made available
    to the Foundation to match on a one-to-one basis private
    contributions made to the Foundation for administrative or
    project expenses, is scheduled to expire in October 1997. We
    recommend that appropriations be reauthorized for a 5-year
    period beginning on October 1, 1997, in the amount of
    $5,000,000 annually.
        We also recommend adding language to allow the National
    Forest Foundation to retain any interest or other investment
    income earned to date and in the future by the Foundation and
    its subgrantees on Federal funds drawn but not immediately
    disbursed. This language change would enable the Foundation to
    use this accrued interest and investment income to support
    additional Forest Service projects.
        Finally, we would recommend adding language that would
    enable officers and employees of the National Forest
    Foundation, while travelling on official business of the
    Foundation, to travel on the same basis as Federal employees,
    including travel on common carriers at the same rates as
    Federal employees.
        We will be happy to work with you and provide any
    additional assistance on these suggested changes to the Act.
                                    ------

                Questions Submitted by Senator Robert F. Bennett

        Question. As you know, with the arrival of the 2002 Winter
    Olympics, the Forest Service is under a great deal of pressure
    to be prepared for the onslaught of visitors to the Cache-
    Wasatch National Forest. Last year, the Committee provided
    funding for some of the initial preparations. (1) Please
    provide me with an update on how those funds appropriated for
    fiscal year 1997 have been utilized thus far. (2) Is the Forest
    Service on schedule with the preparations for 2002 Olympics?
    (3) What impact will Olympic funding have on other programs
    within the region? (4) Do you anticipate the need for
    additional funding beyond the analysis provided to the
    committee last year?
        Answer. (1) What has been done to date with $300,000 in
    fiscal year 1996 and $2,533,000 in fiscal year 1997:
        The creation of the four-person Olympic Planning Team and
    the 3-person Venue Preparation Team. These teams have begun the
    process of establishing communications with the Salt Lake
    Olympic Organizing Committee, all levels of the Forest Service,
    the Department of Agriculture, and have embarked on day-to-day
    monitoring and oversight of the Snowbasin Ski Resort land
    exchange and attendant implementation of the Master Development
    Plan.
        The establishment of a long-term partnership with the Salt
    Lake Convention and Visitor Bureau. The partnership to date is
    resulting in a cooperative effort to staff, operate and provide
    exhibits at the Salt Lake Regional Visitor Center, with plans
    currently being laid to cooperate similarly at visitor contact
    points throughout the greater Salt Lake area.
        The recreation construction funding was used to reconstruct
    7 major campgrounds in the Wasatch Front area. Most of the 2002
    projects are reconstruction of existing recreation facilities
    and restoration of adjacent damaged riparian habitat/resources.
    Therefore they will be used and enjoyed by the general public
    after the Olympics.
        Trail construction funding was used to construct/
    reconstruct over 33 miles of vital trail systems for pre/post
    Olympic use. These trails will also serve as vital
    infrastructure to our recreating public.
        Seed money to initiate a statewide collaborative effort to
    streamline and improve delivery of environmental education and
    visitor services and products.
        (2) Yes, the Forest Service is well within budget and
    timeframe with the Olympics. Our early involvement with the
    entire process and public involvement has assured us as a major
    player at the table of public service participants.
        (3) There are impacts and consequences for all priority
    shifts of emphasis within the Region, and the Agency, to
    accommodate new challenges and opportunities. The Region has
    set priorities that best balance the needs for the 2002
    Olympics with other current Forest Service program needs. The
    2002 Olympics are just one of the many funding challenges
    facing the Agency. However, the Region receives its fair share
    of the national funding total. The Region has dedicated one-
    half of its facility funding on the highly visible facilities
    most likely to be impacted by the 2002 games. That leaves less
    funding than in prior years to address the facilities in the
    rest of the regions.estimated $818 million in recreation
    facility backlog.
        (4) The Olympic 2002 Planning effort continues to operate
    within the scope and philosophy of ``Option III'' of the 2/26/
    96 ``Salt Lake Olympic Budget Strategy'' as submitted by
    request to Senator Bennett (R-Ut) and Representative Hansen (R-
    Ut) last year.
        Subsequent to the 2/26/96 submittal of the budget strategy
    document, the planning team contracted for intensive research
    of costs/effects of past winter games, held de-briefings with
    Forest Service officials involved with the Atlanta Games, and
    conducted a project-by-project value analysis of the Strategy
    to validate and refine the costs for Option III. As a result of
    this effort, Option III costs are now different than the
    original 2/26/96 costs.
        The following chart compares the original Option III
    numbers with the Value Analysis-driven refinements of Option
    III, and the available fiscal year 1998 funding in the
    President's Budget:

                                                       OPTION III
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                         Feb. 26, 1996, option       Revised option III     Fiscal year 1998 funding
                                                  III           ----------------------------------------------------
                Fiscal year            -------------------------
                                         NFRM     CNRF    CNTR     NFRM     CNRF     CNTR     NFRM     CNRF    CNTR
    ----------------------------------------------------------------------------------------------------------------
    1998..............................    $981   $1,183    $248   $1,276   $1,124     $400     $726   $1,124    $400
    1999..............................     999    1,237     248    1,406    1,124      400      726    1,124     400
    2000..............................   1,754    1,458     248    1,416    1,124      400      726    1,124     400
    2001..............................   1,779    1,314     248    1,312    1,124      400      726    1,124     400
    2002..............................   1,968    1,235     248    1,293      280  .......      726      280  ......
                                       -----------------------------------------------------------------------------
        Total.........................   7,481    6,427   1,240    6,703    4,776    1,600    3,630    4,776   1,600
                                       -----------------------------------------------------------------------------
        Grand total...................
    (2)15,148
    (2)13,079
    (1)       10,006
    ----------------------------------------------------------------------------------------------------------------

        Projected estimates for State and Private Forestry Programs
    to support the 2002 Olympics are $13,522 million over 4 years,
    of which, $10,405 million would be provided by non-government
    sources. This means that $3,117 million will have to come from
    S&PF funding.
        It is important to note that under current funding levels,
    efforts are underway to use those State and Private Forestry
    (S&PF) programs that have potential to provide support through
    community based and regional strategic planning efforts. These
    efforts provide increased capacity for local governments and
    organizations to fund high priority projects and initiatives
    through collaborative planning and partnership building.
        Question. Recently, the Committee gave the go-ahead for the
    consolidation of the Intermountain and Rocky Mountain Research
    stations in Ogden and Ft. Collins, CO. This action has caused
    considerable concern among many of my constituents regarding
    the impact on research within my state, the number of dollars
    allocated to the Intermountain region and the impact on
    employees in Ogden. While I was reluctant to allow this
    consolidation to go forward, I have received a commitment from
    the good Chairman of this Committee that we will revisit this
    issue in 1 year to determine if the anticipated savings have
    been realized. Has the consolidation occurred yet? Please
    provide to me an analysis of the estimated increased travel
    costs that will be associated with the consolidation. What
    assurances can you offer that the new station will continue to
    provide solid, on the ground research assistance to the
    constituents within the Intermountain region. Have any
    employees in the Intermountain station been reassigned or have
    had a change in responsibilities?
        Answer. There are four subquestions imbedded in question
    no. 175 by Senator Bennett.
        A. The merger of the Intermountain and Rocky Mountain
    Stations occurred on May 5, 1997. The new station is known as
    the Rocky Mountain Research Station.
        B. Travel costs and savings were not used in projections of
    savings from the consolidation due to: (1) intent to utilize
    new technologies including replacing some travel with audio and
    video conferencing; (2) the difficulties of making estimates;
    and (3) odd and changing transportation costs. For example, the
    one way government rate to fly between Salt Lake City and
    Missoula is $282, while the government cost to fly from Denver
    through Salt Lake City to Missoula is $283.
        Following is an effort to categorize the costs and savings.
        Travel Savings: One Director and one Assistant Director for
    Administration instead of two of each attending required
    regional and national meetings results in an estimated annual
    savings of $12,000.
        Travel Cost Increases: Trips between Ogden and Fort Collins
    by administrative personnel for supervision and coordination.
    Number of trips needed will be minimized by use of electronic
    and phone communications but some trips will be needed. The
    government air fare between Denver and Salt Lake City is
    currently $40.00. Travel costs during the transition from two
    stations to one will temporarily rise as employees are fully
    involved in implementing the consolidation. We expect the
    transition to be implemented within 1 year. Perhaps an extra 10
    to 15 trips during the transition year will result in an
    estimated cost increase of $2,000 during fiscal year 1997.
        Travel Cost Offsets: Travel by one Director and one
    Assistant Director for Administration to field locations
    offsets the travel made by the second Director and Assistant
    Director for Administration.
        Travel by three Assistant Directors for Research as
    compared to five Assistant Directors for Research. There should
    be a long-term cost reduction but not during the transition
    year.
        C. Current support for on-the-ground research assistance to
    Intermountain constituents will continue because the research
    program underway will continue. Also, research capability
    outside of Utah can now be applied to Utah needs. To initiate
    the additional support we envision after the merger, the
    Station Director, some of his staff, and several research
    project leaders met on April 24, 1997, with the Commissioner of
    Agriculture, the Director of the Utah Agricultural Experiment
    Station and the Head of the Utah State Forestry Department. The
    meeting objectives were to describe some key research
    activities and to initiate stronger communications and
    coordination among those the attendees. A second a meeting was
    held at Utah State University to discuss the consolidation and
    opportunities for increased collaboration between Station and
    University scientists. This meeting was open to all members of
    the University community. The Station Director provided
    information on how research priorities are identified within
    the Forest Service Research process and invited the various
    groups present to become involved. Seeking involvement of the
    Utah officials in research activities occurring outside of Utah
    but applicable in Utah has already begun also. These and future
    meetings serve to determine mutual interests and examine ways
    in which the various organizations can cooperate.
        D. No employees in the Intermountain Station have been
    reassigned or have had a change in responsibilities. Employees
    will be involved as the two stations develop common procedures
    for the new station. Through this full employee involvement,
    changes in responsibilities may occur.
        Question. Please provide me with the FS position on the
    proposed transfer of the Dutch John property in Daggett County,
    Utah. Is the FS supportive of a transfer of this property? What
    reservations does the FS have with this proposed land exchange?
        Answer. Our understanding is that the proposal now being
    considered would involve the transfer of jurisdiction of
    approximately 2,450 acres of National Forest System lands
    associated with the Dutch John community to the Secretary of
    Interior, acting through the Bureau of Reclamation. In return,
    the Secretary of Interior would transfer jurisdiction to lands
    of equal value containing approximately 2,167 acres to the
    Secretary of Agriculture, which would become part of the Ashley
    and Uinta National Forests.
        Certain lands, structures, and facilities needed for
    National Forest administration will be retained.
        Also under this proposal, the Bureau of Reclamation would
    ultimately convey the lands associated with Dutch John
    community to residents and to Daggett County. The Forest
    Service would not be involved in the details of how this
    transaction would occur and we would defer to the Department of
    Interior on these matters.
        As outlined above, the Forest Service does not have any
    reservations about the proposed transfer of National Forest
    System lands.
        Question. As you know, Congress recently passed the Great
    Western Trails bill, which I introduced in the Senate. It has
    been brought to my attention that approximately $300,000 is
    needed to conduct the necessary studies to make a
    recommendations if this Trail should be included as part of the
    National Trails System. Does the Forest Service intend to
    utilize funding from within the Region? If so, how will it
    impact other programs within the region? When will this study
    be complete?
        Answer. The Forest Service has not identified specific
    funding to do the study at this time. Without additional funds
    to the Agency, doing this study will be offset with other
    project work. The study is expected to take a minimum of 2
    years to complete.
                                    ------

                  Questions Submitted by Senator Thad Cochran

                                termite research

        Question. How much of the work conducted at the Starkville,
    Mississippi, termite control research unit is conducted on new
    products seeking EPA registration as a termiticide?
        Answer. In the fiscal year 1998 President's Budget, about
    forty-percent of the effort of the termite control research
    unit is on new products seeking EPA registration as
    termiticides and/or alternatives to termite control. Sixty-
    percent of the effort is on basic biology, ecology, and
    behavior to fill the important knowledge gaps needed for more
    effective use of current and emerging technologies.
        Question. Are any of these activities funded through user
    fees paid by the registrant?
        Answer. Yes. Funds received through agreements from
    industry cooperators are used for supplies, materials,
    equipment, and associated travel. Salary and overhead expenses
    are covered by Forest Research appropriations.
        Question. Does EPA reimburse the Forest Service for any of
    the activities conducted at this unit which are not funded
    through user fees?
        Answer. No. EPA does not reimburse the Forest Service for
    any of the activities conducted at this unit that are not
    funded through user fees.
        Question. What level of funding is necessary to support
    this unit's on-going research, fund its activities associated
    with new termiticide approval, and fund new research on
    Formosan termite?
        Answer. The level of funding in the President's Budget
    ($792,000) is adequate to support this unit's on-going
    research. In the spirit of public-private partnership, we plan
    to increase the user fee charges for new products seeking EPA
    registration in order to offset all our costs for testing. This
    will allow us to better meet industry's needs for unbiased
    testing of their products for EPA while at the same time
    allowing the Forest Service to focus appropriated research
    funds on the biology and ecology of termites and related
    insects. Ongoing research on Formosan termites costs about
    $15,000/year. Many of the research results on native
    subterranean termites can be applied directly to control of
    non-native Formosan termites. Additional avenues of funding are
    being explored for cooperative research with USDA-ARS on
    behavior of termites.

                                 beaver control

        Question. What is the Forest Service's policy on beaver
    control on national forest system lands?
        Answer. On much of the National Forest System beavers are
    considered an asset. They create wetlands, provide habitat for
    waterfowl and many other wetland dependent species, and
    moderate flood events. Their populations are kept in check by
    demands for pelts or biological controls. It is in the south
    where most problems occur with beaver. Southern beaver pelts
    are not as valuable as their northern relatives. Also, the
    hydrology of many southern wetland systems has been altered to
    provide better farming conditions and flood protection, thus
    compounding the effects of beavers.
        The agency controls beaver to meet multiple use objectives
    for the National Forest. The general priorities for beaver
    control are protecting timber, roads, and infrastructure from
    damage. We cooperate with States and USDA Animal and Plant
    Health Inspection Service (APHIS) in their efforts to prevent
    flooding on adjacent private lands. On most Forests, where
    control efforts have remained consistent, beaver problems have
    been held to a minimum.
        Memorandums of Understanding between the States and the
    Forest Service generally recognize the States as the
    responsible agency for populations of resident wildlife,
    including beaver, with the Forest Service being responsible for
    habitat. The USDA APHIS--Animal Damage Control (ADC) has
    developed a successful partnership with the Forest Service and
    the States to control beaver populations.
        A Memorandum of Understanding (MOU) between the USDA Forest
    Service and the USDA APHIS--Animal Damage Control, identifies
    the responsibilities of the respective agencies and fosters a
    partnership in discharging the Federal obligation under the
    Animal Damage Control Act of March 2, 1931. This MOU clarifies
    APHIS's role in providing technical information on animal
    damage, management tools and techniques, conducting management
    programs, and complying with environmental regulations and laws
    when conducting predator control activities on National Forest
    System lands.
        Forest Service policy defines the roles of these two
    respective agencies as described in the above-mentioned MOU.
    Generally speaking, APHIS carries out animal damage management
    activities on National Forest System lands to minimize
    livestock losses from predation by coyotes, black bears and
    other predators. The Forest Service may conduct activities to
    control animal damage caused by small mammals and other animals
    to National Forest System resources, such as timber stands and
    roads. However, it is possible that APHIS may assume these
    activities. This activity can be determined through
    coordination between the Forest Supervisor, APHIS personnel,
    and responsible State agencies.
        Question. What is the Forest Service's policy on
    controlling pests, such as beavers, which affect landowners
    adjacent to a national forest?
        Answer. The States have the responsibility to manage
    beaver. They frequently work through APHIS to conduct animal
    control programs. It is the Forest Service policy to cooperate
    with those having legal responsibility to manage resident
    wildlife, as in this case the States, to do what we can to be
    good neighbors.
        Question. How much, and under what account, are funds
    included in the President's budget for beaver control on
    national forests, and specifically, how much is included for
    Mississippi?
        Answer. In fiscal year 1996 and fiscal year 1997, a
    successful partnership between the Delta National Forest (MS)
    and APHIS resulted in the trapping of beaver on the Forest and
    immediately adjacent to the Forest on private lands. Beaver
    impoundments were also breached to facilitate removal of
    standing water from private lands. The allocation within the
    USDA APHIS budget for fiscal year 1996 and fiscal year 1997 was
    $75,000 annually.
        No funding is included with the Forest Service budget
    specifically for beaver control. Any expenditures would be in
    coordination with resource work directly on National Forest
    System lands.
        Question. What funding level is necessary to control
    beavers on national forests in Mississippi?
        Answer. The estimated annual funding level for USDA APHIS
    to continue its partnership with the Delta National Forest, and
    to expand the program to other National Forests in Mississippi,
    is $100,000. This amount will allow the beaver population on
    the Delta National Forest to be held in check, and to expand
    the control program to other National Forests where the beavers
    may soon become problematic.
        Question. Does the Forest Service recognize a legal
    liability when its failure to control pests, such as beavers,
    causes damage to privately-owned land adjacent to a national
    forest? How are such damages paid?
        Answer. The Forest Service has no responsibility for
    controlling pest such as beaver.

                                  timber sales

        The President's budget proposes that the timber sale level
    for the Southern region (region 8) be reduced from 835 million
    board feet in fiscal year 1997 to 675 million board feet in
    fiscal year 1998.
        Question. How much of this decrease is attributable to the
    following factors: (1) elimination of the purchaser credit
    program for road construction and reconstruction (2) decreases
    in Southern pine beetle infestation levels (3) programmatic
    changes?
        Answer. (1) Eliminating the purchaser road credit program
    did not affect the timber volume. (2) At the time the
    President's Budget was developed, the Region estimated there
    would be about a 7 million board feet reduction in salvage
    sales due to a reduction in souther pine beetle populations.
    (3) The majority of the reduction, 153 million board feet, is
    attributable to the region's need to rebuild the timber
    pipeline. The region has managed to keep their unit cost the
    lowest in the nation for the past several years. However, this
    came at a price in that they used their sales prepared for
    future years to keep the program level volume high and their
    cost low whenever there was a disruption to the program, such
    as salvage sale emergencies and western fire crew committments.
    This caused the region to deplete their timber sale pipeline.
    In fiscal year 1998 the region is only capable of producing 602
    MMBF without further sacrificing their pipeline at the proposed
    funding level.
        Question. If timber sale levels were not dictated in
    appropriations legislation, what level of sales would be
    necessary to adequately manage the national forest system
    nationally, and specifically, in Mississippi?
        Answer. Timber sale levels are determined by available
    appropriations, management priorities of the individual
    Forests, and the results of environmental analyses. Because
    forests change over time, and management needs change in
    response, there is no one answer to this question.
                                    ------

                 Questions Submitted by Senator Robert C. Byrd

                         west virginia forest resources

        Chief, early in may Senate career, I worked with the Forest
    Service to make sure information would be available to West
    Virginians to help with management decisions related to our
    forest resources--conservation, reforestation, stand
    improvement, and other investments to allow for wise
    development and use--both for consumptive and non-consumptive
    purposes.
        I recognized that increased employment opportunities would
    occur over time, as improved forest management contributed to
    more growth. Today, the forest products industry is the third
    leading manufacturing industry in my state, up from fifth 10
    years ago. West Virginia's forest stands have also improved--
    growth now averages 6,500 board feet per acre, as compared to
    about 1,800 board feet per acre less than 40 years ago.
        The challenge is to help landowners manage the forest
    responsibly as well as to discover business opportunities that
    might contribute to job growth. The Forest Service can help in
    this regard, with technical assistance programs such as Rural
    Development Through Forestry and Wood in Transportation,
    coupled with hardwoods market analysis and economic research.
    Thus, I am interested in making sure the Forest Service budget
    maintains its emphasis in these areas. Compared to the funds
    necessary to manage the national forest system lands, these are
    relatively small investments that can leverage considerable
    contributions from other sources.
        Question. Chief, what do you see as the most critical role
    the Forest Service can play in helping West Virginians maximize
    the diverse benefits of our forest resources?
        Answer. The Forest Service provides leadership and
    expertise that supports sound management to sustain the State's
    forest resources through research, technology training and
    transfer, and financial assistance. Through State and Private
    Forestry, the knowledge of Forest Service experts works to
    ensure the efficient utilization and scientific management of
    West Virginia's forest resources.
        Question. How are the state and private forestry programs
    helping to improve our forest management as well as helping to
    develop alternative markets for lower value wood products?
        Answer. State and Private Forestry programs provide
    technical and financial assistance to communities, non-profit
    organizations, and businesses through collaborative efforts
    that address environmental, economic, and social concerns and
    opportunities. Efforts focus upon advancing manufacturing
    technologies, especially those associated with hardwoods; the
    use of wood in transportation; developing new markets
    domestically and internationally; analyzing resource
    availability for business expansion and recruitment; and
    implementing best management practices.
        Despite the types of positive improvements which have
    resulted from the rural development and wood in transportation
    programs, funding for both of these initiatives is proposed to
    be reduced in the fiscal year 1998 budget.
        Question. Do you believe these programs have fulfilled
    their objectives, or is there more that can be accomplished if
    the fiscal year 1997 funding levels are continued in both of
    these areas?
        Answer. While much more can be accomplished in both areas,
    when placed in perspective with other pressing needs for budget
    resources, these program areas are a lower priority than
    others.

                   hardwoods technology center, princeton, wv

        Through my efforts, and with the support of the Forest
    Service, a hardwoods technology center has been established at
    Princeton, WV. The purpose of this center is to assist small,
    independent operators in their efforts to establish a market
    niche in the secondary hardwoods processing industry. The
    Center provides training and access to equipment on a time-
    shared basis--critical elements when there are many
    opportunities but where capital requirements can be a hindrance
    to market entry for small businesses and entrepreneurs.
        During the last year, as a result of funds I had added to
    the fiscal year 1997 Interior bill, the Forest Service has been
    working cooperatively with the Hardwoods Center to help it
    achieve and sustain the goal of being self-sufficient in its
    operations.
        Question. Can you provide me with an update of the efforts
    taken by state and private forestry and research to strengthen
    the program at Princeton?
        Answer. State and Private Forestry assigned a liaison to
    work between the Center to better coordinate outreach
    activities; business planning; market development and
    expansion; and hardwood utilization. In addition, State and
    Private Forestry provided financial assistance to permit
    representatives of 20 State Forestry agencies and economic
    development specialists in each West Virginia county to review
    the Hardwoods Technology Center. This has encouraged
    understanding of how the Center can aid the economic
    development of their States and counties and develop new
    clients for the Center.
        Research has completed an evaluation of the Princeton
    research program. Two significant changes are currently being
    implemented that will strengthen the research program and more
    adequately address the industry's needs. First, part of the
    Forest Inventory and Analysis (FIA) program will be conducted
    at Princeton. This will help shorten the FIA cycle throughout
    the region and expand the number of analyses. Second emphasis
    will be placed on research that will help the land manager
    produce higher quality trees and logs in forests impacted by
    fire, insects, poor harvesting practices or other factors that
    have reduced the quality of forest trees.
        Both State and Private Forestry and Research joined the
    Center in signing a Memorandum of Understanding (MOU). This MOU
    provides a general framework to cooperatively implement an
    ``institute concept'' to better provide the understanding
    needed for sound management and practical utilization of the
    Appalachian hardwood forest resource.
        Question. The Forest Service proposed the concept of a
    ``hardwoods institute'', wherein the research capabilities at
    Princeton, the technical assistance and expertise of the State
    and Private Forestry program, and the Hardwoods Technology
    Center would be better coordinated and used. What progress has
    been made in developing this framework? What planning has been
    completed? Have specific project been determined?
        Answer. The fiscal year 1997 appropriation included funds
    to implement an ``institute'' concept between the Center, the
    Northeastern Area, and the Northeastern Forest Experiment
    Station to coordinate cooperative projects among the units and
    promote new business for the Center.
        Timesharing agreements with sawmills, furniture companies
    and allied business are in operation; these companies are using
    the Center facility to decide if investments in new technology
    are feasible for them.
        Question. What actions has the Forest Service taken to
    adjust the research mission at Princeton to ensure that
    information on the Appalachian hardwood resource with respect
    to growth/production and primary and secondary utilization is
    gathered? For example, can the lab assist in efforts to gather
    information about hardwood growth, pricing, grades of logs and
    lumber, and degradation due to fire and insects and disease?
    Wouldn't such information be useful to small hardwood
    businesses and to rural development and economic improvement in
    Appalachia?
        Answer. The research work units at the Princeton lab have
    historically worked to advance more efficient uses of forest
    resources, evaluate hardwood use patterns and processing
    trends, and have studied strategies that will improve the long-
    term performance and competitiveness of the hardwood products
    industry. This information has been useful to small hardwoods
    businesses and to rural development and economic improvement in
    Appalachia. We have recently completed an evaluation of our
    research program at Princeton in an effort to meet the needs of
    residents in Appalachia and throughout the region. Decisions
    have been made that the staff in Princeton will become more
    involved in the Northeastern Station's inventory and evaluation
    of the health of forest resources and in providing information
    to land managers that will help improve tree and log quality.
    Research efforts will include studies on how to manage forests
    degraded by fires, insects, or poor harvesting practices in
    order to obtain the highest quality trees and logs possible.
    The research will also address how best to convert these trees
    and logs into products with the highest possible yields. This
    information will be very useful to small hardwood businesses
    and land owners in Appalachia.
        Question. Are there any conditions which preclude the
    Princeton research lab from entering into cooperative
    agreements with the Hardwoods Center for projects that would be
    mutually beneficial?
        Answer. Forest Service Research has several different
    authorities it can use to enter into cooperative relationships
    with interested parties. The relationships include cooperative
    research agreements, cooperative research and development
    agreements, patents and licensing agreements, and special use
    permits. Each type of relationship is for a specific purpose
    and relies upon a different legislative authority. After Forest
    Service Research and the interested party have preliminary
    discussions to outline the nature of the intended relationship,
    the agency selects the most appropriate legislative authority
    to create the desired relationship. For example, entering into
    a cooperative research agreement requires substantial
    involvement by the Forest Service in planning and conducting
    the research.
        Occasionally, the nature of the relationship desired is
    sufficiently different from the usual and customary cooperative
    relationship that we seek advice from legal counsel to assure
    that we are within the scope of the relevant legal authority.
        The Hardwoods Center has been working cooperatively with
    the Forest Service to obtain use of a facility that is no
    longer required by the Princeton lab. However, the Forest
    Service has to date been unable to provide a mechanism by which
    the Hardwoods Center could use this building.
        Question. Why has there been such a delay in resolving this
    issue? What hindrance precludes the Forest Service from using a
    cooperative agreement to allow the Hardwood Center to use this
    facility? If legislative language is necessary to allow such
    use to occur, please provide language as a drafting service.
        Answer. Recently, the Hardwood Training Center sought an
    agreement whereby it could use Northeastern Station's Materials
    Testing Building at Princeton for both training and commercial
    production. The Center's desire to use the facility for
    commercial purposes is an unusual request, which appears to be
    prohibited by legislative authorities covering cooperative
    research agreements. So we explored a licensing agreement and
    sought review by the USDA Office of the General Counsel. The
    OGC responded on April 14, 1997, that the proposed licensing
    agreement would be an unauthorized disposal of government
    property. Using our conventional cooperative research agreement
    authority was also addressed by OGC. They concluded that such
    an agreement might allow Forest Service Research and the
    Hardwood Center to work cooperatively through the State
    Forester in developing new technology. However, current law
    pertaining to cooperative research agreements would not allow
    the Hardwood Center to charge others to use the Forest Service
    facility. We have now shifted our attention to special use
    permit authorities and are discussing with OGC if a special use
    permit could be issued. Because alternative ways to resolve the
    issue are still being explored, draft legislative language has
    not been developed.
        The fiscal year 1998 budget continues funding for the
    Princeton lab at the same level provided in fiscal year 1997.
    The technical assistance funding, however, is proposed in the
    budget to be reduced from $200,000 to $150,000.
        Question. What is the basis for the proposed reduction?
    Does the Forest Service believe that the objectives at
    Princeton have been substantially accomplished?
        Answer. The Mission of the Center is to improve the quality
    and efficiency of secondary wood processing industries in West
    Virginia and throughout the hardwood processing community. The
    Center has trained industry personnel on state of the art wood
    processing equipment and provided small businesses with time
    sharing opportunities. Companies through this time sharing
    agreement continue to use the facility to determine if new
    technology is feasible and worth the investment. The Center
    continues to demonstrate its value to the hardwood industry and
    the residents of West Virginia.
        The reduced level of State and Private Forestry funding for
    the Center reflects the overall reduction in funding for all
    components of the Economic Action Programs.
        Chief, I am troubled that the Forest Service might be
    abandoning its commitment to this project prematurely. This is
    not a huge amount that we are talking about, and I hope the
    Forest Service will reconsider its position and sustain the
    current level of effort. I will be working with Senator Gorton
    to ensure that the efforts to ensure the success and self-
    sufficiency of the Center are not undermined.

                          monongahela national forest

        Chief, you may not be aware of this, but prior to its
    destruction by fire in 1992, the Seneca Rocks Visitor Center
    was the busiest Forest Service visitor center in the Northeast/
    Mid-Atlantic region. Because of the high visitation--about a
    quarter of a million visitors annually--I have aggressively
    supported the need for a replacement facility at Seneca Rocks.
    To that end, this Committee has appropriated $7.1 million over
    a 5-year period to allow reconstruction to proceed.
        Question. I understand that ground has finally been broken
    and reconstruction has begun. Can you provide me with an
    update--is everything on track with respect to the budget and
    when is the facility expected to be completed and ready for
    occupancy?
        Answer. Construction began April 7, 1997. The building is
    expected to be completed on July 1, 1998. No additional
    appropriated funds are required to complete the project. The
    Monongahela National Forest is working with the USDA Design
    Center on final exhibit plans, and is looking for opportunities
    for partnerships to complete the exhibits.
        Chief, the recreation that occurs on our national forests
    is one of the benefits that is most widely recognized by the
    American public. The Forest Service has recognized the
    importance of this program by proposing an increase of $5.1
    million for recreation operations in the fiscal year 1998
    budget. At the same time, however, the agency has proposed a
    considerble reduction--minus $26.5 million, or 55 percent, for
    the recreation facilities reconstruction and construction
    program.
        Question. Given that the Forest Service already has an
    enormous backlog of maintenance requirements for recreation
    facilities--some $818 million--won't the proposed budget just
    put the agency further behind in its efforts to provide quality
    recreation opportunities for the American Public?
        Answer. The delivery of recreation opportunities and
    experiences through the developed sites program within the
    national forests is a major source of education, information,
    comfort, and enjoyment for millions of Americans. These
    developed sites include toilets and bathhouses, camping sites,
    parking areas, visitor centers, picnic shelters, and water
    systems, to name just a few. The condition of these facilities
    and systems plays a significant role in determining the quality
    of the recreation opportunity that the visitor has on the
    national forest.

                             wood in transportation

        I understand that the National Park Service is proposing
    safety improvements along the George Washington Parkway. There
    have been some concerns expressed, however, about the
    aesthetics and how the views along the Parkway may change when
    concrete ``jersey barriers'' are installed. When the suggestion
    of using traffic barriers that had more wood components was
    proposed, however, I understand that such barriers have not
    been approved for the speeds that exist along some parts of the
    George Washington Parkway.
        Question. Aren't these types of alternative applications
    the very type of uses that the wood in transportation program
    seeks to promote?
        Answer. Yes. In addition to typical highway and pedestrian
    bridges, the Wood In Transportation Program promotes additional
    transportation structures using wood. The program emphasizes
    products such as guard rails for bridge structures, portable
    bridges, railroad structures, and retaining walls. Much of this
    effort is driven by need and demand. Once a focused need has
    been identified, research efforts begin. Research is followed
    by demonstration and commercialization of promising results.
        Question. What research or demonstration is the Forest
    Service involved with that seeks to promote the use of timber
    in roadway devices, such as barriers and median dividers?
        Answer. Forest Service research to date has focused on the
    development of crashworthy bridge railings. Several designs
    have been developed and are available for use. Research on
    crashworthy wood barriers and median dividers has not yet been
    initiated, although there is a growing need for work in this
    area.
        Question. Are there particular hindrances to more
    widespread use of wood in transportation applications?
        Answer. Yes. Some of the hindrances are as follows:
        Lack of knowledge on the part of many engineers and
    transportation officials concerning the suitability,
    capability, and longevity of wood structures.
        A need to develop new designs and technologies, as well as
    in-service performance verification, to further improve the
    efficiency of wood transportation structures.
        Lack of knowledge concerning applications that include
    local resources and new materials that incorporate
    underutilized species.
        Demonstration, technology transfer, and commercialization
    efforts on recently developed technology are hampered by the
    constrained budget level.
        The Forest Service is currently addressing the hindrances
    of Wood in Transportation (WIT) through: the combined efforts
    of the Forest Products Laboratory and the National Wood in
    Transportation Information Center, located in Morgantown, West
    Virginia; technology transfer efforts that include WIT
    information available over the Internet; and by distributing
    over 41,000 pieces of WIT information per year to communities,
    business leaders, and the highway and engineering community.
        Question. How would such work be affected by the proposed
    funding level for the wood in transportation program, which
    overall is decreased $200,000 below the fiscal year 1997 level?
        Answer. A great deal of knowledge has been gained through
    the program. To fully capture the benefits of this knowledge,
    the Forest Service is focusing on commercializing specific
    technologies that have the greatest potential to benefit the
    public.
        Question. What effect would the proposed fiscal year 1998
    funding level have on the activities of the Timber Bridge
    Information Resource Center in Morgantown?
        Answer. In fiscal year 1996, the National Wood in
    Transportation Information Center (Timber Bridge Information
    Resource Center) distributed approximately 41,000 pieces of
    information. This was an increase of more than 15 percent from
    fiscal year 1995. The demand for information provided by the
    Center continues to increase. The proposed reduction would
    require the Center to reduce its current level of activity,
    lessening information available to highway engineers,
    transportation officials, and community officials.

                                 general budget

        The fiscal year 1998 request for the Forest Service is $2.4
    billion, which is relatively flat with the fiscal year 1997
    enacted level, when the emergency appropriations for fire and
    disasters are excluded. Within the budget, however, a
    considerable redirection is proposed--national forest system
    funding is proposed to increase by $50.1 million, while
    firefighting is reduced some $15.7 million and construction and
    reconstruction is decreased approximately $34 million.
        Question. What consequences would you foresee for the
    Forest Service if the Congress stayed relatively on par with
    the distributions between activities that was provided in
    fiscal year 1997 rather than concurring with your proposed
    reallocations for fiscal year 1998?
        Answer. The President's fiscal year 1998 budget request for
    the Forest Service has been carefully prioritized and balanced
    to focus on critical needs within a virtually flat budget level
    compared to fiscal year 1997. The proposed reallocation is in
    concert with key budget priorities aimed toward our strategic
    goals of ensuring healthy ecosystems and sustainable levels of
    products and services. Our judgement is that redistribution
    achieves higher priorities in meeting current demand than
    additional construction or land acquisition which would
    otherwise be desirable.
        Question. If the requested increases in the National Forest
    System account are not funded in fiscal year 1998, how will
    this affect management of the Forest Service's 191 million
    acres?
        Answer. Without the requested increases, we would have
    reduced capability to address our highest health and safety and
    resource concerns across the 191 million acre National Forest
    System. The proposed increases would allow us to accomplish
    more of this high priority work than we could working within
    our current constraints.
        For fiscal year 1998, the Forest Service has established
    Performance Indicators to measure accomplishments within each
    Expanded Budget Line Item (EBLI) within the National Forest
    System For detailed information about what the requested
    increases would allow us to accomplish over the fiscal year
    1997 level, refer to the Performance Indicator Tables within
    each (EBLI) discussion in the Forest Service fiscal year 1998
    Explanatory Notes.
        For example, taking samples from those Tables, the increase
    would allow us to make non-structural improvements in 10,000
    additional acres of rangeland; to make timber stand
    improvements (TSI) on an additional 55,400 acres; and restore
    or enhance an additional 109 miles of stream.
        Without the increases, we will continue to focus on our
    highest priorities with the funding we do receive.
        Question. Are there certain aspects of the requested
    increases that are necessary to comply with court orders or
    settlements? Please provide details.
        Answer. At this time the increases requested are not
    intended to be used to make payments necessary to comply with
    court orders or settlements. Funding for potential payments
    resulting from claims and settlements for environmental reasons
    is currently under review withinthe Administration. Claims and
    settlements involving existing timber sales in habitat for
    marbled murrelet, Mexican spotted owl and salmon, for example,
    are not included in this request.

                                  firefighting

        The droughts and pest infestations of recent years have
    contributed to extensive fire conditions. Despite annual
    appropriations of approximately $500 million annually in recent
    years, Congress has had to provide emergency appropriations for
    firefighting because of extraordinary expense. In fiscal year
    1995, an emergency appropriation of $450 million was provided,
    and in the Fy 1997 Omnibus bill, and additional emergency
    appropriation of $550 million was provided.
        Despite these extraordinary measures, the Forest Service
    has had to exercise emergency transfer authority to address the
    immediate needs for fire suppression during the summer season.
    As a result, $443 million remains to be repaid to the Knutsen-
    Vandenburg (K-V) Reforestation account from which it was
    transferred.
        Question. Of the $550 million appropriated last fall, how
    much has been released by the President and made available to
    the Forest Service? What are the Forest Service's expectations
    with respect to release of the remaining funds?
        Answer. In the fiscal year 1997 appropriations Congress
    established an emergency contingency fund in the amount of $550
    million for the purpose of covering additional fire-fighting
    needs with the proviso that these funds are also available for
    repayment for prior advances made from the KV fund for the same
    purpose. $202 million of this $550 million has been released to
    repay K-V. In addition, $98 million has been used to cover
    fiscal year 1996 suppression costs. This leaves $250 million
    remaining in the contingency.
        If suppression costs exceed available funding in fiscal
    year 1997, a request could be made to release some or all of
    the remaining emergency contingency fund.
        Question. Even if the full amount yet to be released were
    provided to repay K-V, would monies still be owed to the
    reforestation trust fund?
        Answer. Even if the full $250 million was released and
    provided to repay K-V, an additional $193 million would still
    be owed the K-V fund for prior year advances for emergency
    firefighting.
        Question. Does the Administration have a plan for repaying
    K-V, or do you anticipate carrying this burden over from 1 year
    to the next for the foreseeable future?
        Answer. The Administration is committed to providing the
    resources necessary for firefighting and for carrying out the
    KV program of work scheduled for 1998. The adequacy of
    unobligated balances in the KV fund to achieve these goals is
    continually monitored.
        As part of its fiscal year 1998 Budget, the Administration
    has proposed a $5.8 billion contingency account for
    unanticipated needs/disasters. Among the proposed uses of this
    account would be Forest Service firefighting.
        Question. If this account is not agreed to in the normal
    appropriations cycle, what impact would this have on the Forest
    Service firefighting program?
        Answer. This contingency fund was intended to be available
    to cover any additional fire suppression costs above the
    appropriated amount in fiscal year 1998. However, a budget
    amendment has recently been submitted to the Congress
    withdrawing the request for this fund. As a part of the
    President's Budget, there is however, a provision which allows
    the Forest Service to utilize other available funds in the
    event fire fighting costs exceed the appropriated level.
        Question. Since your fiscal year 1998 budget is far below
    the 10 year average for firefighting, if the contingency is not
    approved, would you anticipate further borrowing from KV?
        Answer. If firefighting needs exceed appropriated levels
    and the contingency is not approved the Forest Service will,
    first ask to allocate the $250 million contingency fund. If
    those funds are not sufficient, we will have to borrow money
    from the KV fund or other Forest Service programs to cover
    expected fire-fighting costs.

             senior citizen employment--monogahela national forest

        The Monongahela National Forest is able to partake in the
    Department of Labor's Senior Community Service Employment
    Program (SCSEP). The Monogahela, like many other forests,
    receives funding which is used in turn to provide a supplement
    to retired persons who assist in many visitor functions for the
    agency--staffing of visitor centers, campground hosts,
    providing information at ranger stations, and other such
    activities.
        Last year, there was some discussion that the Forest
    Service should be dropped from the SCSEP program as its dollar
    decreased.
        Question. What would be the effect on the Forest Service's
    ability to provide visitor services to the recreating public if
    the Department of Labor drops the Forest Service from the
    program?
        Answer. If the FS could no longer continue as a National
    Sponsor of the Senior Community Service Employment Program
    (SCSEP), it would have a severe impact on services provided to
    the recreating public. The SCSEP enrollees play a key role in
    hosting over 800 million visitors to the National Forests
    annually. It would mean a loss of over $20 million in work
    accomplished that benefits the recreation program. Some
    campground, building and trails maintenance work would not be
    accomplished. Visitor information services could be terminated
    or hours of service reduced. It could result in early closing
    of some recreation facilities and a reduced level of services
    during the popular recreating season.
        Question. What would be the additional costs to the Forest
    Service if the activities conducted by these senior enrollees
    would have to be funded out of Forest Service dollars? Would
    you reallocate funds in order to maintain the program, or would
    facilities such as campgrounds and visitor centers be closed
    due to staffing shortfalls?
        Answer. The additional costs to the FS would be equivalent
    to about $41 million of appropriated funds, if we lost
    Department of Labor funding for SCSEP. Since the value of work
    accomplished by SCSEP enrollees accounts for approximately $20
    million in benefits to the recreation program, this loss of
    funding might result in possible closures of some facilities
    such as day use areas and visitor centers. The loss of funds
    could also affect the level and quality of services provided to
    the public.
        The agency will probably not be able to reallocate funding
    to continue activities currently provided by the SCSEP.

                        forest service research program

        Chief, you are aware of my specific interest in the
    research activities conducted at the three locations in West
    Virginia. But I would also like to review with you in a more
    general way that challenges which face the research program at
    a time when dollars continue to be constrained.
        Question. What is the impact on the research program when
    increased funding is not provided to cover fixed cost
    increases, such as mandated pay and benefits, space,
    unemployment benefits and other uncontrollable costs?
        Answer. The increased costs of doing our research business,
    coupled with fixed or reduced funding, has reduced our research
    capability. The research dollars available for operating
    budgets decline when fixed costs increase and appropriations
    are constant.
        We have, and are continuing where possible, to reduce our
    administrative overhead. Also, there are many cases we are not
    filling vacant positions in order to use the funding to
    maintain the scientists we retain. Reduced operating budgets
    and fewer scientists equate to a smaller Forest Service
    Research program, as well as a reduced program for extramural
    cooperative research with universities and other partners.
        Additionally, fixed/reduced budgets have delayed facility
    maintenance and limited equipment purchases which are essential
    to stay at the cutting edge of science. In the long-term,
    fixed/reduced budgets impairs our ability to perform high
    quality research and respond to the natural resource research
    needs required by the Nation.
        Question. As the Forest Service budget has been reduced in
    recent years, what has been the impact on the number of
    scientists that are supported by the research budget?
        Answer. We have been forced to reduce the number of
    scientists. In fiscal year 1996 we had 548, down 23 percent
    from the 715 scientists we had in fiscal year 1990. The
    remaining scientists are dealing with the same problems as
    other employees who have been through downsizing due to budget
    reductions.
        Question. Has the Forest Service conducted any
    consolidations within the research program that have resulted
    in closures of locations?
        Answer. Due to budget reductions in fiscal year 1996 we had
    seven location closures: Fairbanks, AK; Bend, OR; Carbondale,
    IL; Orono, ME; Macon, Ga; Gulfport, MS; and Gainsville, FL
        Question. Has the research program gotten to a point that
    further budget reductions would result in more facility
    closures in order to maintain a core capacity in the remaining
    areas where research is conducted?
        Answer. Yes. We anticipate that every $1 million dollar
    reduction or redirection impacts 19 people. If the magnitude of
    the reduction or redirection was very severe we would certainly
    need to RIF employees and close locations.
                                    ------

                  Questions Submitted by Senator Byron Dorgan

        Question. The FS has over 230 million acres of land to
    supervise and manage. One of the mandates of current law, as
    interpreted by the courts and the agency itself, is the
    practice of developing National Environmental Policy Act
    documentation for every permit issuance, renewal and transfer.
    While in many instances this is a proper and efficient use of
    FS resources due to the substantial change in the use of some
    environmental degradation of the land, this is simply a waste
    of time and resources in a substantial number of permit
    renewals and transfers. What proposal is the FS developing,
    either administratively or in the form of recommended
    legislative changes, to help alleviate this burden?
        Answer. The Forest Service is working on several fronts to
    address the issues raised in this question.
        First, the agency is working on a proposal to expand our
    application of the categorical exclusion provisions of the
    regulations that have been promulgated pursuant to the National
    Environmental Policy Act (NEPA). Specifically, types of uses
    which qualify as being categorically excluded (from
    documentation in an environmental analysis or environmental
    impact statement) will be better defined, and will include the
    approval, modification, or continuation of a variety of minor
    uses, of small additions to larger existing uses, and for
    granting authorizations to applicants who have an existing
    right to use and occupy National Forest System lands. We intend
    to prepare a revised set of categorical exclusions for public
    notice, comment, and response later this calender year.
        Second, we are working at streamlining our application
    procedures through revisions to the regulations at 36 CFR 251,
    Subpart B. Specifically, we intend to establish a procedure
    whereby proposals for new uses must meet a series of pre-
    application criteria before they will be accepted by the agency
    and processed as an application. This procedure will allow the
    Forest Service to more readily reject unacceptable proposals,
    and to more efficiently process accepted applications.
        Last, the agency has been steadily increasing its issuance
    of authorizations having a longer tenure then in the past.
    Doing so will reduce the number of applications which are now
    regularly expiring (generally, at 5 or 10 year intervals), and
    which require reconsideration and possible NEPA evaluation when
    they do. For example, we recently started issuing
    communications use leases at most of our communications site
    with tenures of 20 or 30 years, rather than a traditional 10-
    year permit. We are also issuing long-term easements, some for
    as long as the easement is needed for the purpose which it was
    issued, others for periods of 30-50 years. Over time, this will
    significantly reduce the number of authorizations that will be
    expiring annually, and which need to be evaluated in the
    reissuance process. None of the above require legislation.
        Question. Currently, the Forest Service is engaged in
    creating a revised Forest Plan which includes the grasslands in
    North Dakota. I have received continued reassurances from the
    Forest Service that the ranchers and environmentalists from my
    state would be consulted as the plan is developed. However, up
    to this point the grazing associations, whose involvement with
    the land is so critical to the long term health and
    sustainability of the land, have not been involved.
        What is the Forest Service's plan to integrate interested
    parties into the planning process in an ongoing, meaningful and
    productive way?
        Answer. The Plan revision process for the Northern Great
    Plains encompasses three national forests and multiple national
    grasslands within Wyoming, Nebraska, and both North and South
    Dakota. The stewardship goal of the effort involves extensive
    collaboration with people and communities across the four
    States. To date, the planning team has reported multiple
    involvements with grazing associations through presentations,
    visits, and other communications by District Rangers, Forest
    staff, and the planning team. The engagement of people in this
    process is ongoing and open. As a special event, the week of
    June 9-13, the North Dakota National Grasslands will be hosting
    a series of public open houses across the State. Grazing
    associations not involved to date may contact the Planning Team
    to discuss further opportunities for meaningful and productive
    participation.
        Question. For many years, there has been substantial
    concern among permit holders on the National Grasslands in my
    state, and in many National Forests across the country, about
    the growing problem of noxious, and non-native weeds. In North
    Dakota, we have had a considerable problem with Leafy Spurge,
    costing ranchers a great deal in lost revenue. What is the
    Forest Service currently doing to help deal with this problem
    and other noxious weed problems, and what are your plans for
    the future to coordinate the protection of federal lands from
    this continuing problem?
        Answer. Aside from efforts to eradicate leafy spurge, the
    Northern Region of the Forest Service (FS) is working with the
    State of North Dakota Weed Coordinator to implement a weed-
    seed-free forage program in North Dakota. This program would
    prohibit the sale and distribution of forage products within
    North Dakota unless they were certified as weed-seed-free. The
    restriction would apply equally to imported forage and forage
    produced within North Dakota. In support of this effort the
    Custer National Forest will prohibit the use of forage not
    certified as weed-seed-free on National Grasslands in North
    Dakota once the program is fully implemented. North Dakota has
    established inspection and certification procedures for
    producers; however, few local forage producers have come
    forward to sign up for the program. The FS is cooperating with
    the State to educate publics and outreach to forest users and
    forage producers about the need for the program.
        Last year, the FS implemented a national noxious weed
    strategy which outlines the Agency's goals and actions for
    prevention and management of noxious weeds across the National
    Forests and Grasslands. Priority has been given to prevention
    and rapid response to new infestations. The primary prevention
    action is to expand the weed-seed-free forage program to
    include all National Forest System (NFS) lands. The requirement
    that all visitors and permittees on NFS lands use weed-seed-
    free forage is only instituted after working with the State to
    develop a weed-seed-free forage certification program. This
    program is run by the State with voluntary participation by
    forage producers. Forest closures are in effect in Montana,
    Idaho, Utah, Nebraska, Wyoming and Colorado.
        The FS is involved in other cooperative efforts with State
    and private partners at the national level. The Agency is a
    member of the Federal Interagency Committee for Management of
    Noxious and Exotic Weeds (FICMNEW), which has worked with State
    and private partners to develop Pulling Together: A National
    Strategy for Invasive Plant Management. The National Strategy
    was announced at a Congressional briefing April 29, 1997, with
    over 100 organizational supporters. The National Strategy is a
    unifying conceptual document in which the supporters have
    agreed to prevent,control and restore affected areas,using
    education,research and partnerships to achieve the goals.
        The new Pulling Together Partnerships initiative is the
    first step in implementing the National Strategy and the first
    round of 24 winning proposals have been selected. The program
    was jointly set up by USDA, USDI and the National Fish and
    Wildlife Foundation (NFWF), as a cost-share challenge grant
    program to use pooled Federal funds with matching local funds
    for multijurisdictional noxious weed management. The net result
    of this new program will be the leveraged use of funds; local
    decision-making based on community priorities; and the shared
    knowledge and experience among partners.
                                    ------

                Questions Submitted by Senator Patrick J. Leahy

        Question. With timber harvest on public lands declining,
    the pressure on private forest lands to provide more of the
    nation's wood supply is increasing not only in the Northern
    Forest but across the country. Would you agree that more
    attention within the Forest Service should be focused on State
    and Private Forestry Programs? What can we expect not only in
    new funding, but also in expanded programs? Over the past 10
    years, how has funding for State and Private Forestry changed
    as a percentage of the overall Forest Service budget? How has
    it changed if you do not include the federal lands forest
    health management programs?
        Answer. The stewardship of the nation's nonindustrial
    private forest lands and the well-being of urban and natural
    resource dependent rural communities is a high priority for the
    Administration. Considering the many program priorities facing
    the Forest Service in fiscal year 1998, the President's budget
    proposal is formulated to balance different areas of necessary
    work, and is based on the priority of the State and Private
    Forestry programs among all discretionary programs. The
    President's budget for State and Private Forestry provides
    increased funding, compared to fiscal year 1997, for the
    following programs within the Forest Health Management Budget
    Line Item (BLI): Federal Lands Forest Health Management and
    Cooperative Lands Forest Health Management. Increases in these
    programs will allow resources to be focused on the protection
    of the health of the nation's forests through increased forest
    health monitoring and pest prevention and suppression. There
    will be increased technical assistance to federal land
    managers, Tribal governments, and State and private land
    managers in planning and implementing on-the-ground forest
    health management projects designed to improve the health of
    the Nation's forests. Forest Health monitoring will provide
    full coverage of 60 percent of forestlands in the contiguous
    United States, compared to a projection of 53 percent in fiscal
    year 1997.
        The President's budget also includes increases in the
    Cooperative Forestry BLI for the Stewardship Incentives Program
    and the Forest Legacy programs. These programs emphasize forest
    stewardship through landowner assistance programs to enable the
    9.9 million nonindustrial private forest landowners to better
    manage, protect and use their natural resources through forest
    stewardship programs. The increase in funding for the
    Stewardship Incentives Program will allow the Forest Service to
    fulfill part of the large demand for cost-sharing assistance to
    implement multi-resource practices on nonindustrial private
    forest lands. The increase in Forest Legacy nearly doubles the
    level of funding available to conserve environmentally
    important forests threatened by fragmentation and development.
        In the fiscal year 1998 President's budget, the S&PF budget
    share represents 6.6 percent of the total Forest Service
    discretionary funds. From 1987-1990 the S&PF budget averaged
    4.25 percent of the Forest Service budget and from 1991-1997
    the S&PF budget averaged 7 percent of the total Forest Service
    budget. The S&PF budget from 1960-1997 represents an average of
    6 percent of the total Forest Service budget. In fiscal year
    1997 the S&PF share of the Forest Service budget, without the
    Federal Health Management dollars was 5 percent.
        Question. At the proposed level, what level of funding will
    the Rural Development Through Forestry Initiative receive?
        Answer. Currently, the President's budget includes $9.0
    million for the Economic Action Programs. Of this amount $6.0
    million will be provided to the Northeastern Area to continue
    their Rural Development through Forestry Initiative.
        Question. What was the allocation of the fiscal year 1997
    funding per State?
        Answer. In fiscal year 1997 the Northeastern Area was
    allocated $3.01 million to continue the Rural Development
    through Forestry (RDTF) Initiative. Of this amount about $2.47
    million is allocated for use by the 20 states in the Northeast
    and Midwest. Of the $2.47 million, $2.058 million is already
    allocated to states for specific projects. Table 1 displays
    this allocation. The remaining $408,000 is to be allocated to
    multi-state projects in June of 1997.

                                  TABLE 1.--RDTF ALLOCATION TO STATES, FISCAL YEAR 1997
    ----------------------------------------------------------------------------------------------------------------
                                                                                        State level
                                  State                                  Technical        special       State total
                                                                        assistance       projects
    ----------------------------------------------------------------------------------------------------------------
    Connecticut.....................................................         $20,000         $15,000         $35,000
    Delaware........................................................          20,000          15,000          35,000
    Illinois........................................................          20,000          50,000          70,000
    Indiana.........................................................          20,000          50,000          70,000
    Iowa............................................................          20,000         280,000         300,000
    Maine...........................................................          20,000          96,000         116,000
    Maryland........................................................          20,000          30,000          50,000
    Massachusetts...................................................          20,000          30,000          50,000
    Michigan........................................................          20,000          88,000         108,000
    Missouri........................................................          20,000          70,000          90,000
    Minnesota.......................................................          20,000          72,000          92,000
    New Hampshire...................................................          20,000          50,000          70,000
    New Jersey......................................................          20,000          20,000          40,000
    New York........................................................          20,000          80,000         100,000
    Ohio............................................................          20,000          40,000          60,000
    Pennsylvania....................................................          20,000         250,000         270,000
    Rhode Island....................................................          20,000          15,000          35,000
    Vermont.........................................................          20,000         100,000         120,000
    Wisconsin.......................................................          20,000          77,000          97,000
    West Virginia...................................................          20,000         230,000         250,000
                                                                     -----------------------------------------------
          Total.....................................................         400,000       1,658,000       2,058,000
    ----------------------------------------------------------------------------------------------------------------

        Question. How many Forest Legacy parcels are currently
    being negotiated; how much federal funding would be necessary
    to complete these projects; how many acres are involved; and
    where are they located?
        Answer. There are 41 parcels in various stages of
    negotiation which are not funded with fiscal year 1997 or prior
    federal funds. A summary by State shows the acres and the
    estimated federal funds needed:

                                      FOREST LEGACY PROJECTS (NOT CURRENTLY FUNDED)
    ----------------------------------------------------------------------------------------------------------------
                                                                                                         Estimate
                                  State                                  Number of         Acres      Federal  funds
                                                                          parcels                         needed
    ----------------------------------------------------------------------------------------------------------------
    Connecticut.....................................................               3             367        $380,000
    Massachusetts...................................................              10           1,148       1,734,000
    Maryland........................................................               7           1,358       3,430,000
    Maine...........................................................               3          20,381       3,000,000
    New Hampshire...................................................               4          14,369       5,450,000
    New Jersey......................................................               1             145         412,000
    New York........................................................               5           2,048         768,000
    Rhode Island....................................................               4             555       1,098,000
    Vermont.........................................................               1           6,000       1,500,000
    Washington......................................................               3             460       2,050,000
                                                                     -----------------------------------------------
          Total.....................................................              41          46,832      19,822,000
    ----------------------------------------------------------------------------------------------------------------

        In addition, other projects are currently under way using
    fiscal year 1997 and prior year funds. It is also anticipated
    that Utah, which recently joined the program, will be
    identifying parcels for acquisition in the near future.
        Question. In 1996 and 1997, how many fires started or
    crossed into the urban-wildland interface? How was funding from
    the Cooperative Lands Fire Management program used to fight
    these fires?
        Answer. Our current fire statistical data base does not
    specifically identify wildland-urban fires unless there was
    structural loss. In 1996, interface fires burned a total of 774
    structures. The 1997 statistics are not yet available.
        Cooperative Lands Fire Management funds leverage state and
    local fire agency funds to increase and insure compatability in
    training, organization, and equipment. Increased state and
    local capability, in cooperation with all other wildland
    firefighting agencies, increase the nation's ability to take
    fast effective initial attack on all fires, including those in
    the wildland urban area.
        Question. What is the status of the Timber Bridge
    Initiative? How many demonstration timber bridges have been
    constructed? What are the estimates for rural development
    impacts of this program?
        Answer. To date, 279 demonstration projects have been
    completed. Rural development improvements are seen by improved
    access to rural areas and increased employment. For example, in
    Kenai Borough, Alaska, a demonstration project assisted in the
    development of an innovative preservative treatment facility
    for local timber species. The facility, which created six jobs
    in a Native American village of 143 people, treats timber
    products that will be used for transportation structures. The
    Federal share of this project was $50,000, while cooperators
    provided $465,000.
        Question. Last year, the Forest Service pooled
    approximately $8.9 million from various accounts to support
    AmeriCorps program if Congressional approval was granted. How
    much of that funding remains? What has that funding been used
    for and does the Forest Service have plans to use some of the
    funds to support youth conservation corps programs?
        Answer. In accordance with congressional direction the
    Forest Service did not operate an AmeriCorps program in fiscal
    year 1997. The AmeriCorps funds have been redirected primarily
    back to the respective program areas and allocated as follows:

                                                                      Amount
    Recreation funds for recreation fee demo pilot project..      $4,684,000
    Fish and Wildlife funds for collaboration with the
        National Fish & Wildlife Foundation and the National
        Forest Foundation...................................       2,078,000
    Timber/Road Reconstruction funds for timber replacement
        volume in the Pacific Northwest as agreed to in
        Court settlement....................................       1,424,000
    Soil/Water funds for soil/water restoration,
        stabilization, and monitoring in Southern California
        due to impacts of illegal immigrants................         135,000
    Soil/Water funds for determination of source pollution
        of water in the Upper Animas Watershed in southern
        Colorado............................................         100,000
    Reprogramming of additional Grazing, Soil/Water, Land
        Line, and Road Maintenance funds to fund replacement
        timber volume in the Pacific Northwest..............         330,000
    Permanent and trust funds remain in field units.........         149,000

        Question. Has the Forest Service estimated the savings to
    be gained from the timber purchaser credits road program
    initiative?
        Answer. There will not be any direct savings to the agency.
        Question. In 1995 and 1996, how much funding has been used
    for trail construction within the national forests from ISTEA
    enhancement program funds?
        Answer. The Forest Service does not maintain a national
    list of trails work completed through the ISTEA Enhancement or
    National Recreation Trails Fund (NRTF) programs. National
    figures can be obtained from the Federal Highway Administration
    which is the agency which maintains the programs. Responses
    from Regional Offices show an estimate of $200,000 per Region
    from NRTF on NFS lands.
        Question. Has State and Private Forestry considered
    establishing a training center for federal, state, and private
    foresters on conservation stewardship practices? Is there
    currently a similar training program within the Forest Service
    or operated by a non-profit foundation of a private enterprise?
        Answer. State and Private Forestry, working closely with
    the Cooperative States Research, Education and Extension
    Service, State Foresters, and other public and private
    partners, engages regularly in training state service foresters
    and consulting foresters in forestry and related conservation
    stewardship practices. In addition, we and NRCS operate a
    National Agroforestry Center in Lincoln, NE that provides
    training to field foresters on agroforestry conservation
    practices such as establishing and protecting riparian areas,
    windbreaks, and field shelterbelts. The Society of American
    Foresters and the Association of Consulting Foresters also
    engage regularly in continuing education in forestry and
    conservation stewardship practices for their members.
        Question. Within the NFS, which national forests have the
    greatest backlog of willing sellers of forest inholdings? Which
    forests have the largest number of acres left to acquire within
    their authorized boundaries? Which forests have the largest
    number of acres remaining within their acquisition targets?
    What is the existing backlog at the Green Mountain NF and how
    much funding is necessary to eliminate the backlog?
        Answer. Most NFs do not keep a record of the willing
    sellers of private land inholdings. These records would be
    difficult to keep current and would serve little purpose
    considering the limited level of land acquisition funding.
        There are over 40 million acres of non-NFS land
    (inholdings) within our boundaries. Several forests contain
    over one million acres of inholdings. The Chugach and Mark
    Twain NFs, each with over 1.5 million acres of inholdings, have
    the largest number of acres of inholdings. The Green Mountain
    NF has approximately 450,000 acres of inholdings. It is not our
    goal to acquire all inholdings. Land acquisition targets are
    not based on the acreage of inholdings. Targets are set each
    year after funds are appropriated.
        Another consideration is the percentage of inholdings
    within the forest boundary. As a general rule, the forests in
    our eastern regions have the highest percentage of inholdings.
    The Wayne NF has the highest percentage of inholdings with the
    percentage exceeding 70 percent. On the Green Mountain NF, over
    50 percent of the land within the boundary consists of
    inholdings.
        The existing backlog of land available for acquisition on
    the Green Mountain NF is valued at near $25,000,000,comprised
    of approximately 100 cases and 48,000 acres. Included in this
    total is the entire 18,000 acre New England Power Company tract
    with an estimated value of $10,000,000. To complete these
    acquisitions, we would need an additional 10 percent of the
    land value to pay for associated costs.
        Question. If a large parcel of land within a NF goes on the
    market unexpectantly, what authority or funding sources, other
    than Land and Water Conservation Fund, are available to acquire
    significant land under emergency circumstances?
        Answer. There is no other authority or funding sources to
    acquire lands.
        Question. How many national forests, and in which regions,
    will initiate their forest plan revision in the next 2 years?
        Answer. A total of 81 national forests will initiate land
    and resource management plan revisions in the next 2 years.
    This includes: 13 in R-1; 7 in R-2; 10 in R-3; 13 in R-4; 7 in
    R-5; 1 in R-6; 13 in R-8; 16 in R-9; and 1 in R-10.
        Question. Do all the forests face similar challenges and
    outreach strategies for revising their plans?
        Answer. Land and resource management plan revisions have
    the same requirements as the development and approval of the
    initial plans, including appropriate public participation
    activities and coordination with other public planning efforts.
    Individual national forests may address any number of public
    issues and management concerns in the revision effort,
    depending on the unique situation for that national forest.
    While some plan revision efforts may address similar issues or
    concerns, the level of intensity or controversy involved with
    these may be different.
        Question. What are some of the major differences?
        Answer. One example of a similar issue that all revision
    efforts will be addressing, but for which different levels of
    intensity or controversy may exist is in the evaluation of
    roadless areas. National forests with a great number of
    inventoried roadless areas may face a more complex analysis
    than those with very few roadless areas. Grazing may be a very
    important issue to address for national forests in the west,
    but not an issue at all for some eastern national forests. The
    same may be said for other potential issues such as the
    allowable sale quantity, critical habitat for threatened and
    endangered species, insect and disease outbreaks that pose a
    forest health issue, weather related resource condition
    problems associated with hurricanes or major landslides caused
    by excessive snowmelt or other precipitation events, the demand
    and supply potential for providing an integrated mix of goods
    and services, etc. Each land and resource management plan
    revision effort will be unique.
        Question. What are the estimated budget needs to revise
    these plans?
        Answer. Based upon the experiences of recently completed
    land and resource management plan revision efforts, estimated
    costs for these revisions are $500,000 per year for four years,
    or an average total cost of $2,000,000 per plan revision.
        Question. The forest inventory program is targeted to
    survey different regions of the country on a 10-year cycle.
    This cycle was designed to provide the various regions of the
    country with essential information on growth, harvest and
    condition of our forest resources. What factors have delayed
    the Forest Service in meeting this target in different Regions?
    What is the status of the forest inventory in the Northeast? Is
    the Forest Service required to use federal employees to do the
    data collection for these surveys? Has the Forest Service used
    contractors to do data collection in any region? If so, what
    kind of arrangement was made and was there associated cost
    savings? Would the Forest Service need additional authority to
    contract with state or private foresters to conduct the forest
    inventory?
        Answer. Factors causing delay:
        The current national Forest Inventory Analysis (FIA)
    inventory cycle is now 12+ years. The cycle is controlled by
    three main factors; (1) a mandated accuracy requirement which
    determines the amount of data to be collected, (2) funding for
    personnel and equipment which determines the speed at which the
    data are collected, (3) funding for technology research and
    application which can increase efficiency and reduce the
    collection burden on personnel and equipment without
    sacrificing accuracy.
        The first controlling factor, accuracy, is required and
    necessary to provide quality information to make sound
    management decisions. The second controlling factor, funding,
    is the central issue. Since 1995, overall Forest Service
    Research program funding has declined 10 percent. During this
    same time period, FIA field program funding has increased by 3
    percent. Clearly FIA is still a priority research program
    within the Agency but the modest increase in FIA funds have not
    been sufficient to offset the increased cost of getting
    personnel and equipment into the field. Continued funding at
    current levels will further erode the cycle unless new
    technology can bridge the gap.
        The third controlling factor, technology research, is
    difficult to maintain when cycles slip and demand for current
    information rises. However, scientifically sound research is
    critical to the application of any new technology or data
    collection method. With constrained budgets, FIA strives to
    maintain a balance between the potential gains in efficiency
    from development and application of new technology and the
    demand for shorter current cycles.
        Why did we fail to shorten the cycle? In the face of deep
    cuts in the Forest Service research budget the Agency did
    maintain FIA as a high priority (no overall reduction) but was
    unable to downgrade other critical research priorities to
    provide significant additional funding.

                                northeast status

        The FIA cycle in the Northeast is currently about 13 years.
    Contractors/Non-Federal employees
        The FIA program has traditionally relied upon considerable
    direct and in-kind support from cooperators as we conduct
    Statewide inventories. In 1996, 13 percent of the FIA program
    came from State, private, and other federal cooperators. While
    we do not believe additional authorities would be needed to
    contract outside personnel, we do have concerns about quality
    assurance. Under any contractual arrangement, the FIA program
    must have complete control of the quality assurance process to
    insure that sampling design specifications and quality
    standards are met and are consistent across all ownerships and
    State lines. Additionally, FIA costs include training, data
    compilation, editing, processing, analysis, and reporting.
    These costs would be retained by FIA whether contractors were
    used or not. Our limited experience where contractors have been
    used indicate little difference between our cost for data
    collection only and contractor cost for data collection
    (including contract administration costs). We continue to be
    open to discussion on this issue and new annualized inventory
    designs like Annual Forest Inventory System (AFIS) and Southern
    Annual Forest Inventory System (SAFIS) will rely heavily on
    cooperator field support.
        Question. The Green Mountain National Forest is currently
    leasing its headquarters facility in Rutland, VT. If the Forest
    Service was to move to smaller space that it would purchase,
    what cost saving could be expected?
        Answer. The Green Mountain National Forest headquarters is
    currently located in Rutland, Vermont, in a leased facility.
    This leased facility is comprised of 17,056 square feet of
    office space and a 2,700 square foot garage. The present annual
    least cost, which includes building and grounds maintenance, is
    $205,000.
        As the result of streamlining of the Forest organization,
    which has included a substantial reduction in the headquarters
    staffing level, the Forest headquarters has reduced its office
    space needs to approximately 13,000 square feet.
        The Forest is beginning the process of exploring
    alternatives to their current lease. These alternatives
    include: a possible renegotiation of the current lease, taking
    into consideration the reduced space needs; the purchase of an
    existing or new facility; and the construction of a new
    facility. Each alternative for office space would be based on
    the projected need of approximately 13,000 square feet.
        Part of the process of exploring alternatives to the
    current lease will be the completion of a comprehensive cost
    analysis. This analysis will be completed utilizing the OMB
    Circular A-94 life cycle cost methodology. Because this cost
    analysis has not yet been completed, we do not yet know what
    cost saving could be expected if the Forest would move to
    smaller space that it would purchase or construct. In order to
    accurately determine the benefit/cost of relocating the Green
    Mountain SO, a pre-construction analysis of alternatives needs
    to be completed. The estimated cost of this analysis is
    $35,000.
        Question. Which national forests are estimated to have the
    highest visitor use? Which forests have the highest recreation
    use per acre?
        Answer. We do not currently have information on recreation
    use per acre by national forest. Due to the multiple use nature
    of the activities, goods and services provided by national
    forest system lands, we are unsure the conclusions would be
    accurate based on the data. For example, a forest that has
    large acreage, but relatively few developed recreation use
    areas may still receive very high recreation use. However, the
    high impact on the recreational areas would be masked by the
    total forest acreage.
        We do, however, have information on which forests have the
    highest recreation use. In fiscal year 1992 and fiscal year
    1995 the Regions were asked to submit their top 5 forests. The
    top 12 in fiscal year 1995 and the top 10 in fiscal year 1992
    follow:

                         NATIONAL FORESTS RANKED BY AMOUNT OF RECREATION USE IN FISCAL YEAR 1995
                                                       [Thousands]
    ----------------------------------------------------------------------------------------------------------------
                                                                                        Recreation
                        Forest name and State                        Rank   Regions    visitor days     Visits \2\
                                                                                           \1\
    ----------------------------------------------------------------------------------------------------------------
    Wasatch-Cache/Uinta--UT-WY...................................    \3\ 1        4         10,518.2        32,520.1
    Tonto--AZ....................................................        2        3         10,507.3        38,184.5
    Coronado--AZ.................................................        3        3          9,903.9        11,305.0
    Inyo--CA.....................................................        4        5          9,839.2        29,985.2
    Angeles--CA..................................................        5        5          9,815.9        29,579.2
    White River--CO..............................................        6        2          8,045.0        10,136.7
    Gifford Pinchot--WA..........................................        7        6          7,690.1        34,780.1
    Pike/San Isabel--CO..........................................    \3\ 8        2          7,325.0        15,311.0
    National forests in North Carolina--NC.......................    \3\ 9        8          6,756.3        19,905.8
    Coconino--AZ.................................................       10        3          6,628.7         8,500.0
    Mount Baker-Snoqualmie--WA...................................   \3\ 11        6          6,551.8        23,070.8
    San Bernardino--CA...........................................       12        5          6,353.4         1,852.0
    ----------------------------------------------------------------------------------------------------------------
    \1\ A recreation visitor day (RVD) is a statistical reporting unit consisting of 12 visitor hours. A visitor
      hour is the presence of a person on an area of land or water for the purpose of engaging in one or more
      recreation activities during a period of time aggregating 60 minutes.
    \2\ Visits an entry of one person upon a National Forest for the purpose of participating in one or more
      recreation activities for an unspecified period of time. Only the ``primary'' activity of the recreation
      visitor is recorded.
    \3\ Multiple forests.

                         NATIONAL FORESTS RANKED BY AMOUNT OF RECREATION USE IN FISCAL YEAR 1992
                                                       [Thousands]
    ----------------------------------------------------------------------------------------------------------------
                                                                                                        Recreation
                         Forest name and State                            Rank           Region        visitor days
    ----------------------------------------------------------------------------------------------------------------
    Tonto--AZ......................................................               1               3          9,247.4
    Angeles--CA....................................................               2               5          9,158.0
    Inyo--CA.......................................................               3               5          8,376.3
    White River--CO................................................               4               2          8,232.3
    Dixie--UT......................................................               5               4          6,175.6
    Coconino--AZ...................................................               6               3          5,788.4
    National forests in North Carolina--NC.........................           \1\ 7               8          5,767.3
    Pike San Isabel--CO............................................               8               2          5,590.3
    San Bernardino--CA.............................................               9               5          5,501.1
    Mount Baker-Snoqualmie--OR.....................................          \1\ 10               6          5,498.3
    ----------------------------------------------------------------------------------------------------------------
    \1\ Multiple forests.

        Question. What were the criteria used and how were they
    weighted under the new budget allocation process for fiscal
    year 1997 operating funds? Was there regional flexibility in
    applying or weighting these criteria? How much flexibility does
    an individual forest have in reprogramming funds between budget
    lines once the allocation has been made? Within Region 9 and
    for the Green Mountain National Forest, which budget line items
    saw the largest increase and decrease in funding levels from
    the previous year? Has the Forest Service compared these
    funding levels to the activity priorities in individual Forest
    Plans? Is the Forest Service going to revisit these criteria
    during the fiscal year 1998 allocation?
        Answer. The Forest Service has been using a criteria-based
    approach for allocating funds in the agency's budget process
    for several years. The development and refinement of criteria
    has been an on-going effort involving Washington Office and
    Regional resource and budget staffs. NFS and Construction
    staffs have particularly focused on refining and using
    allocation criteria.
        For fiscal year 1997, the criteria were used as a starting
    point for the initial and final allocations to field units in
    the Program Budget Advice. The criteria used for the NFS and
    Construction appropriations differed from program to program,
    but they basically measured the resource base, workload or
    accomplishments and complexity. For most programs, Regional and
    Washington Office staffs developed options and reached
    consensus on allocation criteria and their weights.
        For any given region, three factors would have led to
    increases or decreases in funding for a line item in fiscal
    year 1997: total funding appropriated, the amount of funds
    needed to operate the National headquarters, and the criteria
    used. Since moving to a criteria-based approach could result in
    significant shifs in program funding among units, an adjustment
    or ``bridge'' was applied to all regions to limit an increase
    or decrease of no more than 10 percent in a region's percent
    share of the available funding from 1 year to the next. For
    fiscal year 1997 Region 9 implemented a similar allocation
    process for distributing funds to its National Forests. Region
    9 provided each forest with a base level of funding to support
    basic management needs and then allocated the remaining funding
    using criteria.
        Allocation criteria will continue to be used in fiscal year
    1998. For some programs, the criteria used for fiscal year 1997
    were or will be revised for fiscal year 1998. Given the
    complexity of managing natural resources, no set of criteria
    will yield a perfect allocation. Review and possible
    adjustments to the results of criteria application will
    continue to be necessary to address emerging issues and changed
    conditions.
        Question. In 1990, the National Research Council made a
    number of recommendations for the Forest Service program. Has
    the Forest Service implemented any of the recommendations?
        Answer. Yes. USDA Forest Service Research (FSR) has
    included the NRC's ``Forestry Research: A Mandate for Change''
    to strategically plan its program of research since it was
    issued in 1990. We believe we have implemented in various
    degrees a number of the recommendations.
        In their executive summary, the National Research Council
    (NRC) identified recommendations under (1) the Status of
    Forestry Research, (2) Support for Forestry Research, (3)
    Maximizing the Benefits from Forestry Research. Some of
    recommendations pertained to Forest Service Research, others to
    forestry research conducted by universities, industry, or
    others. Specific recommendations implemented by Forest Service
    Research (FSR) are:
        1. The Status of Forestry Research:
        Provide vastly expanded competitive funding.--FSR use of
    competitive funding mechanisms increased after 1990. However,
    the ``vastly expanded'' competition envisioned in the report
    has not materialized. For example, the global change research
    program provided several competitive opportunities in fiscal
    year 1992-1995. Since then, global change funds have been
    allocated to extend and complete projects initiated
    competitively. An 8 percent FSR budget reduction in fiscal year
    1996 coupled with lack of funding increases to cover inflation,
    have made it difficult to expand competitive funding.
        Create centers of scientific emphasis supported by public
    and private research organizations.--FSR is involved in several
    centers of excellence, working closely with universities, state
    governments, industries, and private forestry groups. These
    centers broadened FSR's research capabilities through
    establishing strong partnerships. Research addressed under the
    auspices of these centers are tied to regional and national
    research issues. For example, the Alabama Consortium (SRS-4107,
    Alabama A&M University, and Auburn University) entered into a
    collaborative endeavor incorporating the expertise of
    scientists, forest managers, and forest owners. The Consortium
    seeks to create new information through research, to utilize
    existing knowledge, and to expand education and technology
    transfer for the benefit of land managers. Another example, the
    FSR is exploring, with the Bureau of Land Management, National
    Park Service, and others, creation of ``Cooperative Ecosystem
    Study Units'' in several regions. The intent of these units is
    to create interagency and multi-university centers of emphasis
    in natural resources research and education. As budgets decline
    and downsizing progresses FSR continues to merge units into
    larger integrated units of research. FSR has research
    facilities located on or adjacent to 42 university campuses
    which enhance our ability to collaborate with university
    centers of excellence.
        Increase the quality of forestry research by opening it up
    to the broader scientific community.--We have taken advantage
    of opportunities to engage in scientific exchange and
    collaboration with other research organizations. For example,
    we have strengthened ties with the Ecological Society of
    America and the Society for Conservation Biology to expand the
    range of expertises available to work in complex issues. In
    addition, many of our researchers are members or officers of
    related scientific and professional societies, such as the
    American Economics Association and the Soil Science Society.
    Society activities have brought new thinking and skills to
    forestry research.
        Establish research-management collaborations at large
    spatial scales.--FSR has worked with the National Forest System
    to create ``Adaptive Management Areas.'' Successful studies are
    underway in North Carolina, Georgia, and Arkansas in addition
    to Oregon and Washington. In fiscal year 1994 FSR initiated 20
    large-scale ecosystem management projects across the entire
    United States and Puerto Rico. Many of these long term studies
    are in progress and involve collaborative efforts with
    universities, industry and the NFS.
        Develop a cadre of forest and related scientists that
    reflect the national, and global population composition and
    that are equipped to solve domestic, international, and global
    problems.--FSR has the same distribution of ethnicities (within
    0.5 percent in each category) among its total employee pool in
    1997 as it did in 1990.
        Establish a National Forestry Research Council.--In
    response to this recommendation, USDA proposed the
    establishment of a subcommittee to coordinate forestry
    research, through the Office of Science and Technology Policy
    (OSTP) and the Federal Coordinating Council for Science,
    Engineering and Technology (FCCSET). A forestry subcommittee
    was near charter and constitution stages at about the time the
    Executive Branch changed administrations. The subcommittee was
    not formed and the new administration has been directing
    science planning through a new structure, the National Science
    and Technology Council (NSTC) and the Office of Science and
    Technology Policy. FSR has been involved in this planning
    effort. In April, 1993, USDA chartered the Forestry Research
    Advisory Council (FRAC). FRAC replaces the Cooperative Forestry
    Research Advisory Council, which existed to serve the
    Cooperative Forestry Research Program (McIntire-Stennis) only.
    FRAC's charge is broadened to include all forestry research
    supported through USDA and addresses a broader range of
    national forestry research issues.
        Other recommendations.--To support basic forestry teaching
    and research through NFRC, to strengthen teaching, to establish
    long-term forestry research grants, and to establish
    competitive graduate fellowships--have not been implemented.
    Most of these require action by groups other than FSR or
    additional funding beyond that made available since 1994.
        2. Support for Forestry Research:
        Increase FSR budget by 10 percent per year, for the next 5
    years.--Between fiscal year 1990, when the NRC report was
    issued, and fiscal year 1995, appropriations rose from $150.9
    million to a peak of $193.5 million (nominal dollars). Since
    1995, FSR appropriations have declined to $179.8 million today.
    Complete fulfillment of the NRC recommendation would have
    resulted in an FSR budget of $243 million in 1995. The nominal
    funding increase from fiscal year 1990 to 1995 amounted to
    slightly more than a 5 percent annual increase. When the
    effects of inflation are factored in using 1995 dollars, the
    fiscal year 1990 budget was $172.5 million (1995 constant
    dollars) leading to a 2.3 percent annual increase from fiscal
    year 1990 to fiscal year 1995. Compared to the fiscal year 1990
    constant dollar level, the fiscal year 1997 level of $172.6
    million (1995 constant dollars) shows no change.
        Conduct a national assessment of current status of forestry
    facilities and equipment.--As part of the 1995 Farm bill, a
    national assessment of agricultural research facilities is in
    progress (USDA Facilities Review Team). Federal and university
    forestry laboratories are part of this assessment. No national
    assessment of forestry research equipment has been conducted.
        Other recommendations.--Increase competitive grant funding
    for forestry research in the USDA in the National Research
    Initiative to $100 million annually and increase McIntire-
    Stennis funds to 50 percent of the FSR budget--have not been
    implemented. The current funding level in the NRI for forestry
    research is less than $20 million and the McIntire-Stennis
    funding level is less than 15 percent of FSR funding. On
    average, 12.3 percent of the FSR is committed to extramural
    research, most of this to grants and agreements with our
    university partners. Decreasing budgets and downsizing have
    limited and resulted in a decrease over the past 2 years.
        3. Maximizing the Benefits from Forestry Research:
        Encourage scientists to assume a leadership role in
    communicating their knowledge to policy makers.--``Forest
    Service Ethics and Course to the Future'' emphasizes that one
    of the keys to our effectiveness as a conservation leader is
    expanding collaboration between scientists and practitioners
    and better integrating science into policy issues. Researchers
    have played important roles in major regional assessments, such
    as FEMAT, the Southern Appalachian Assessment, the Sierra-
    Nevada Ecosystem Project, and the Columbia River Basin study,
    communicating their knowledge to policymakers. FSR also co-
    hosted two high-level workshops to explore why we have been
    successful in certain efforts and less successful in others in
    bringing science to policy making (``Navigating Into the
    Future, Rensselaerville Roundtable: Investigating Science and
    Policymaking''). Guidelines from these workshops (currently in
    draft form) will be disseminated agencywide.
        Establish a professional reward system for scientist that
    acknowledges the validity of efforts involved in outreach.--In
    1996, FSR completed the first major revision since the mid-
    1980s in its policies and guidelines for evaluating research
    scientists. Much greater emphasis was placed on outreach
    activities in the revised guidelines so scientists who engage
    in outreach and coaching users on implementing research
    findings will get promoted faster.
        Communicate research results to a broader range of
    clients.--In the revised scientist evaluation guidelines,
    discussed above, increased emphasis has been placed on
    communicating research results to a broader range of clients
    and coaching users on efficient implementation of research
    findings. FSR has also been taking advantage of computer
    technology, such as the Internet and CD-Roms, for disseminating
    research results. These media often reach people faster and
    easier than journal articles or publications.
        Question. Describe the Forest Service research budget in
    constant dollars since 1990. How does this compare to overall
    trends in the Forest Service budget?
        Answer. In 1990 constant dollars:

                         FOREST SERVICE RESEARCH BUDGET
                              [Dollars in millions]
    ------------------------------------------------------------------------
                                      Forest Service
               Fiscal year                  \1\         Research    Percent
    ------------------------------------------------------------------------
    1990............................          $2,544         $151          6
    1991............................           2,225          160          7
    1992............................           2,293          168          7
    1993............................           2,254          166          7
    1994............................           2,391          172          7
    1995............................           2,063          169          8
    1996............................           2,127          153          7
    ------------------------------------------------------------------------
    \1\ Total discretionary appropriations.

        Question. What are the trends for number of scientists
    employed directly and in cooperative research units?
        Answer. The trend for number of scientists employed
    directly by the Forest Service is down from 715 in fiscal year
    1990 to 548 in fiscal year 1996. We are not familiar with the
    term ``cooperative research units.''
        Question. What percentage of the Forest Service budget is
    used for cooperative research?
        Answer. When we speak about cooperative research we
    generally mean extramural research. The percentage of
    extramural research is determined by two factors, the work
    needed to accomplish our mission and the level of funds
    available for that year. Extramural research averaged 24
    million dollars the past 5 years, approximately 13 percent of
    annual appropriations.
        Question. What percentage of forest Service research is
    focused on timber production vs. other management activities of
    the Forest Service?
        Answer. We estimate that 28 percent of the Forest Service
    research budget is focused on timber production. In addition,
    the research accomplished by our Forest Products Lab and other
    forest products, utilization and wood processing research, an
    additional 9 percent of the budget, contributes to improved and
    expanded ways to use wood fiber including material that needs
    to be removed to improve forest health through utilization of
    small diameter trees.
        Question. Has the Forest Service ever conducted a study
    looking at the impact on estate taxes on private forestland,
    specifically looking at the number of large parcels sold due to
    estate taxes?
        Answer. No. The Forest Service shares this concern and the
    Cooperative Forestry Staff has a study of this issue proposed
    for fiscal year 1998. However, we believe the issue is broader
    than just forestland and there should be a USDA effort to look
    at the effects of estate, gift, and capital gains on farmers,
    ranchers, and forest landowners and the conversion/
    fragmentation of their land holdings attributable to estate
    taxes.

                              subcommittee recess

        Senator Gorton. The subcommittee will stand in recess until
    9:30 a.m., Thursday, April 24, when we will receive testimony
    from the National Endowments for the Arts and the Humanities.
        [Whereupon, at 11:42 a.m., Thursday, April 17, the
    subcommittee was recessed, to reconvene at 9:30 a.m., Thursday,
    April 24.]

      DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 1998

                                  ----------

                            THURSDAY, APRIL 24, 1997

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 9:30 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Slade Gorton (chairman) presiding.
        Present: Senators Gorton, Stevens, Cochran, Burns, Bennett,
    Gregg, Campbell, Bumpers, Dorgan, and Boxer.

                        NATIONAL ENDOWMENT FOR THE ARTS

    STATEMENT OF JANE ALEXANDER, CHAIRMAN

                                 budget request

        Senator Gorton. This subcommittee hearing will come to
    order. We are going to hear this morning from the Chairmen of
    both the National Endowment for the Arts and the National
    Endowment for the Humanities and review with them their
    proposed budgets for the coming fiscal year.
        Ms. Alexander and Dr. Hackney began their tenures at the
    two Endowments almost 4 years ago. Since that time, each has
    been in the unenviable position of having to execute
    substantial budget cuts for their agencies enacted by Congress
    in an effort to address the budget deficit.
        As chairman of this subcommittee, I have a keen
    appreciation of their situation. The amount of budget authority
    available to fund the many agencies within the jurisdiction of
    the Interior bill has declined by about $1 billion since 1995,
    when I assumed the chairmanship.
        For the current year, the National Endowment for the Arts
    is funded at $99.5 million, the National Endowment for the
    Humanities at $110 million. Both agency budgets include
    proposed increases in their fiscal year 1998 programs that
    would provide a funding level of $136 million for each, thereby
    partially restoring the cuts that were made in 1996 and
    sustained in the current fiscal year.
        I believe I can say with great certainty, though I do have
    the chairman of the overall committee here, that I do not
    anticipate that there will be an increase of similar magnitude
    in this subcommittee's budget allocation. Instead, my
    expectation is that we may face a further decline in available
    dollars. As a result, that will mean that for each increase
    provided for one agency budget a corresponding decrease will
    have to be taken in another.
        At the same time, I think it is appropriate to say that the
    debate over the continuation of the two Endowments which has
    been so prominent in the House of Representatives is much less
    prominent here in the Senate. There has been in each of the
    past 2 years, and I am sure will continue to be, substantial
    support for the Endowments and for their continuation.
        That does not make finding money for them any easier, and
    whether or not there will be even the slightest increase in
    allocation for this subcommittee will depend largely on budget
    negotiations which now seem to me to be reaching a climax.
        Ms. Alexander, and for all of the audience here, I will
    explain the chart or the display that we have there
    [indicating].
        [The information follows:]

    Interior programs fiscal year 1997 enacted

    Land management programs:
        Forest Service......................................  $2,361,000,000
        National Park Service...............................   1,414,000,000
        Bureau of Land Management...........................   1,090,000,000
        Fish and Wildlife Service...........................     653,000,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total.............................................   5,517,000,000
                        ========================================================
                        ____________________________________________________
    Indian programs:
        Indian Health Service...............................   2,054,000,000
        Bureau of Indian Affairs............................   1,606,000,000
        Navajo-Hopi/IAIA/special trustee/Indian gaming/
          Indian education..................................     119,000,000
                        --------------------------------------------------------
                        ____________________________________________________
            Total...........................................   3,779,000,000
                        ========================================================
                        ____________________________________________________
    Science and minerals management programs:
        Geological Survey...................................     739,000,000
        Office of Surface Mining [OSM]......................     272,000,000
        Minerals Management Service [MMS]...................     163,000,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total.............................................   1,174,000,000
                        ========================================================
                        ____________________________________________________
    Energy programs:
        Energy conservation R&D.............................     570,000,000
        Fossil energy R&D...................................     365,000,000
        Naval petroleum NPR/reserves........................     144,000,000
        Energy information administration/economic
          regulation........................................      69,000,000
        Alternative fuels production........................      -4,000,000
        Clean coal technology...............................    -123,000,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total.............................................   1,020,000,000
                        ========================================================
                        ____________________________________________________
    Cultural programs:
        Smithsonian Institution.............................     370,000,000
        National Endowment for the Humanities...............     110,000,000
        National Endowment for the Arts.....................      99,000,000
        National Gallery of Art.............................      60,000,000
        Holocaust Memorial..................................      31,000,000
        Institute of Museum Services........................      22,000,000
        Memorials...........................................      41,000,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total.............................................     733,000,000
                        ========================================================
                        ____________________________________________________
    Interior departmental offices:
        Interior affairs....................................      88,000,000
        Departmental management.............................      58,000,000
        Solicitor...........................................      35,000,000
        Inspector general...................................      25,000,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total.............................................     207,000,000
                        ========================================================
                        ____________________________________________________
          Total bill........................................  12,430,000,000

            distribution of funds appropriated through subcommittee

        Senator Gorton. That display indicates the distribution of
    the funds in the current year that are appropriated through
    this subcommittee. The green on the left are land management
    agencies; the blue are the Indian programs; and the much
    smaller additional ones have to do with minerals management,
    energy programs, and the like.
        Cultural programs and the Endowments are the next to the
    last, next to the right, and as you can see even within the
    context of this bill, they represent a relatively modest amount
    of our appropriation. Within those cultural institutions,
    however, are the Smithsonian Institution, the National Gallery
    of Art, and a number of other institutions for which we are
    almost solely responsible as opposed to the arts of the country
    taken as a whole.

                     support for continuation of endowment

        I do want to emphasize that wherever we come out on funding
    in fiscal year 1998, the subcommittee clearly supports the
    continuation of the two Endowments. This hearing today is
    intended primarily to provide subcommittee members with the
    opportunity once again to demonstrate that support and to ask
    questions rather than to debate the future existence of either
    the Endowment that you head or the National Endowment for the
    Humanities.
        It has been 1 year since you appeared before this
    subcommittee. In the intervening months the most significant
    issues that you faced have not changed a great deal, but you
    have represented a very strong and eloquent voice for the
    National Endowment for the Arts.
        Ms. Alexander, we will start with you today.
        Senator Campbell. Mr. Chairman, are we going to be allowed
    to make opening statements?
        Senator Gorton. You certainly are. We are going to give
    each member of the subcommittee an opportunity to speak.
    Senator Stevens is the chairman of the overall committee as
    well. He said he did not have an opening statement earlier, but
    I am going to ask him again whether he does want to say
    anything.
        Senator Stevens. No; thank you.
        Senator Gorton. OK. We will pass. Senator Boxer.

                    opening remarks of senator barbara boxer

        Senator Boxer. Thank you very much, Mr. Chairman.
        I want to start off with an apology, because I am on the
    Budget Committee and there is a briefing at the White House,
    and without a budget it is very hard for your subcommittee and
    all the subcommittees and for Chairman Stevens to do his work,
    so I am going to have to run out, but my heart is here with the
    people who believe that it is crucial for our Nation to
    dedicate some of its treasure to the arts.
        I think it is absolutely extraordinary that there would
    even be an argument, and I think our chairman has pointed out
    that the argument over the existence of the NEA is more of an
    argument in the House, in which I served for many years,
    although it came rather late in the game when the leadership
    changed hands.
        But I have to say that we spend 38 cents per person on the
    arts in this country. If anyone thinks that is too much, I
    would say to them they ought to think about what it all means.
    I think the modest increase put forth by the President is just
    that. I would like to even do more than that, because I have
    seen the effect of the arts on children. I know that when you
    make these small investments they are leveraged mightily. I
    know that they are leveraged in such a way that they help bring
    economic development to communities and it is a tremendous
    community experience to see a small amount of money at work.
        Now, the funding that the President requested--$272 million
    for the arts and humanities--is a mere one one-hundredth of 1
    percent of the entire Federal budget. It does get leveraged in
    the community. That is important. But it is one one-hundredth
    of 1 percent of the total budget, and millions of Americans
    across the country have an opportunity to view history in arts
    that otherwise would be inaccessible.

                          president's request for neh

        The President's request of $136 million for fiscal year
    1998 for the NEH will enable the Endowment to continue to
    support many activities, including the cataloging of
    Presidential papers and the preservation of newspapers of the
    Nation's early history. No country can survive if they cannot
    learn from history. This is very important.
        In the last 5 years, institutions and individuals in my
    home State of California have received $63 million from the NEH
    and the California Council of Humanities for projects that help
    preserve the Nation's cultural heritage, foster lifelong
    learning, and encourage civic involvement.
        Of note, the Fowler Museum of Cultural History at UCLA
    received $450,000 for the Royal Tomes of Saipan, an exhibit of
    artifacts from ancient Peru that drew 100,000 visitors from
    California and more than 1.2 million visitors nationwide. All
    of those visitors come and they stay there and they walk down
    the street, they go to the restaurants, and they bring
    business. They go to the stores.

                        importance of nea to california

        Now, on the NEA, for 32 years the NEA has led the way in
    making art accessible to Americans throughout the country. Arts
    education, theater projects, dance troupes, opera companies
    that nurture young artists and strengthen communities. Those
    are funded by the NEA, by NEA grants.
        Now, I just want to say straight out not every single grant
    is perfect. I do not agree with every single grant. It is very
    subjective, and a couple of them get people upset. Now, I think
    we have to realize that we are all human beings. Mistakes will
    be made and judgments may be flawed when looking at it from
    one's perspective and one's own values and culture, but what
    has always interested me is that those who yell the loudest are
    the ones who look the longest at the very projects that they
    say are so terrible.
        I say we are born with a neck. You can turn your head away,
    and you can criticize, and I encourage that criticism. I think
    it is healthy to criticize. If you think that a grant is wrong,
    say it. I think some are as well, and I say it, too, but it
    does not mean that you just say, well, therefore, we cannot
    have this program. It means that we work with you, and Jane
    Alexander you have been extraordinary, I think, to work with,
    and you make sure that mistakes are the fewest that they can
    be.
        Recently in my State the Endowment granted $150,000 to the
    Los Angeles County Music and Performing Arts Commission for a
    cultural tourism development program. This is one of several
    regional cultural tourism forums funded throughout the country.
    The NEA has awarded $30,000 to the Balboa Art Conservation
    Center in San Diego for improving the collections storage needs
    of midsize and small museums throughout California.
        Mr. Chairman, I am at the end of my statement. I feel very,
    very strongly that the President's proposal for NEA funding
    will broaden public access to the arts for all Americans to
    participate in and enjoy, in order to improve the quality of
    life for our children and our families. And again, I am so
    sorry that I cannot stay for this entire hearing, but, Mr.
    Chairman, I hope that we can work together so that we have a
    good bipartisan agreement at the end of the debate.
        Senator Gorton. If you have any questions, we will be happy
    to submit them.
        Senator Boxer. Thank you, Mr. Chairman.
        Senator Gorton. Senator Burns.

                      prepared statement of senator burns

        Senator Burns. I just have a statement that I would like to
    submit for the record, sir.
        [The statement follows:]

                   Prepared Statement of Senator Conrad Burns

        Thank you, Chairman Gorton, for holding this hearing today.
        I'd like to welcome Ms. Alexander and Mr. Hackney here
    today. We appreciate your coming in to talk about your
    agencies. I had the pleasure of discussing old movies from my
    wrangler days with Ms. Alexander yesterday afternoon. I worked
    on The Rare Breed, but unfortunately not Calamity Jane.
        Both of you have done well running your agencies under
    tough circumstances. The battles certainly aren't over, but at
    the same time we may be approaching the signing of a truce.
    From what I see and hear, support for the arts and humanities
    remains strong in Montana and around the country.
        I look forward to hearing how efficiently your agencies are
    running and what each of you is doing to raise funds from
    private sources, and if those efforts are having success.
        Thank you again for being here this morning.

                      opening remarks of senator campbell

        Senator Gorton. OK. Senator Campbell.
        Senator Campbell. Thank you, Mr. Chairman.
        I am prompted to make an opening statement really based on
    a letter that I saw from a colleague who happens to be a
    terrific friend of mine from the House side, which I will
    explain a bit later.

                       preservation of cultural treasures

        I would like to direct the attention of the committee and
    people who are here to those wonderful baskets over there in
    those glass cases, or this one that was provided by one of my
    staffers on the Indian Affairs Committee, that were made so
    tight they will actually hold water with no glue or anything.
    It is just wonderful creative work of Indian culture.
        I would like to certainly identify myself with the comments
    that Senator Boxer made. I think the arts serve an extremely
    important role. You can look at it from a lot of different
    viewpoints, certainly in Santa Fe, Jackson, places like that,
    it becomes part of the basis for their economy, but the point I
    would like to make, I guess, is that I think there is a place
    where we need to define the real importance of preserving
    cultural treasures that are in the art world, not only visual
    ones like this but song, dance, storytelling, and a lot of
    other things, too.
        I lived in Japan for a number of years, as you know, and I
    went to a Japanese university. In Japan, the Federal Government
    actually gives a title to people who have spent their whole
    life in a certain art form, perhaps bonsai--you know, the
    little miniature trees--things of that nature.
        As they reach a certain degree of skill the Federal
    Government gives them a title of living cultural treasure, and
    in fact gives them a stipend, gives these wonderful people a
    stipend to keep that skill alive. That is why in Japan you have
    things that were practiced as far back as the 15th century that
    may not have any, you know, visual economic use, but they are
    still practiced today because the Government has recognized the
    importance of preserving cultural treasures.
        I would certainly like to see that in this country, too,
    and that probably will never happen, but at least I think we
    have an obligation to define the things that are fast
    disappearing.
        These baskets are just an example. They came out of the
    Southwest, but if any of you are ever in the State of
    California, Senator Boxer's State, and have the opportunity to
    go to the State Indian Museum, which is located right behind
    Sutter's Fort in Sacramento, CA, there are examples of baskets,
    believe it or not, that were woven so small they are on
    pinheads. They are in a glass case like that one over there.
        They have a big magnifying glass. You have to look through
    the glass to be able to see the finest of those baskets. Some
    of them were woven out of the feathers from humming bird's
    chests. Some of them they cannot even weave any more because it
    is a dying art. There are very few people who know how to do
    it, the Pomos, the Washos, some of the California tribes.
        Some weavers have given up because under the Endangered
    Species Act there are certain things they cannot collect,
    certain grasses, certain leaves, certain feathers, certain
    pieces of fur and so on, so they cannot do it, but they
    actually have baskets in that museum that were woven from the
    hair of a fern, a fern's hair, if you can imagine how fine that
    is.

              nea and the preservation of native american culture

        I wanted to point that out today because I know in some
    places there is a problem with some of the funding that goes
    through the NEA. We have all heard about Mapplethorpe over and
    over, ad nauseam, I guess.
        I have a lady who came to one of my town meetings a couple
    of years ago in Colorado suggest that we disband the NEA and
    NEH both because of some of the money that has filtered down
    through the National Endowments.
        I pointed out to her--that was during the debate of the
    $1,000 coffee pots and $800 hammers that the Air Force was
    buying, and I suggested to her that maybe we ought to just
    delete all the money for military defense because somebody made
    a dumb mistake, and in that context I think she understood why
    we should not use a sort of all-or-nothing phrase when talking
    about the National Endowment for the Arts because there were a
    few grants that went out that most Americans would disagree
    with.
        But my friend and colleague on the House side, who I have
    known for many years and who I think is a very fine man,
    Congressman Wally Herger from Senator Boxer's State--I have
    great respect for him and I do not mean to single him out, but
    he did recently send out a Dear Colleague letter saying--the
    title was, ``NEA Funds Basket Weavers,'' as if to imply that
    basket-weaving is, you know, just kind of a pastime and not
    important, and one of those things most Americans would think
    was frivolous and we ought to get rid of the funding for that.
        It was a $60,000 grant, in fact, that the NEA gave to
    California basket weavers for a statewide gathering of basket-
    weavers, and western regional Indian basket weavers, to try to
    preserve that art form.
        I want to also bring a couple of pictures of some of them
    that are blown up, if you can see them--I hope you can. These
    are traditions--you know, if you paid a person to weave this
    they would probably get 20 cents an hour or something. There is
    no money in this, very little.
        Only a few of the very famous potters and weavers of rugs
    and so on can actually make money, but these things are not
    from the standpoint of making a living for people. You just do
    not.
        And how many children, how many babies in Indian country
    are still carried in these baby bassinets? Very few. Some of
    the traditional people do, but a lot of women keep that skill
    alive simply to preserve it as a cultural heritage, important
    to them. This is something that is handed down from mother to
    daughter, grandmother to granddaughter, and it just seems to me
    that it comes under the same category as perhaps wood carvings
    in Appalachia, or some of the other things that we often think
    of that have come down, that has made our country have a fabric
    that binds us all together.
        These happen to be made by American Indians, but certainly
    the richness of the skills belong to all of us as Americans,
    and I think we have an obligation to try to keep them alive,
    and I just wanted to bring them in and let my colleagues see
    how easily we can get sidetracked when we are talking in these
    deficit times, when we have to watch every buck, that we might
    end up doing something that we would really regret centuries
    from now, if we inadvertently, through our inability or
    inaction in trying to help the arts, kill the tradition that
    belongs to all of us.

                               prepared statement

        I thank you, Mr. Chairman. I might also recommend to
    anybody who would like to look into some of those very, very
    fine baskets that I mentioned that are done on pinheads and
    with very fine materials, this wonderful book on California
    Indian basketmaking that I am sure Senator Boxer already has.
        Thank you for your time, Mr. Chairman. Please include my
    prepared statement in the record.
        Senator Gorton. Thank you, Senator Campbell.
        [The statement follows:]

             Prepared Statement of Senator Ben Nighthorse Campbell

        Mr. Chairman, members of the committee, I would like to
    take this opportunity to offer a few brief comments on the
    National Endowment for the Arts and the National Endowment for
    the Humanities.
        Let me begin by saying that I'm glad the anti-arts folks
    haven't dampened the committee's spirit regarding the arts.
        Among the many important functions of both Endowments, I
    want to highlight the critical role they play in sustaining our
    national treasures. The argument that the arts should be
    privately funded, not federally funded, essentially translates
    into the argument that the Federal Government has no business
    in sustaining our national treasures. I wholeheartedly
    disagree.
        As we do with everything in Congress, I feel obliged to
    define ``national treasure.'' Quite simply, a national treasure
    is something that, if allowed to die out, be forgotten, or even
    ignored, will make us guilty of robbing our children of a piece
    of their heritage. National treasures include languages and
    paintings, sun dances and sculpture, cultural gatherings and
    functional art.
        As you may know, I lived for several years in Japan and was
    able to experience their high regard for the arts. The Japanese
    government actually has a national living treasure designation
    for masters of various cultural arts. They have seen fit to
    maintain, as an honor, artistic traditions and treasures dating
    back to the 15th Century.
        It is true that there is not widespread agreement on the
    definition of ``national treasure,'' or art or the humanities.
    It is also true that there may have been projects funded with
    federal dollars which, in retrospect, may not have been
    appropriate to fund.
        During a recent town meeting I posed this question to a
    Coloradan who shouted that I should disband the NEA and NEH,
    ``Are you suggesting, then, that we eliminate the Department of
    Defense because they spent $800 on a hammer and $1,000 on a
    coffee pot?''
        Although federal funding of the arts comprises only a small
    fraction of its overall funding, many states, including my own,
    would suffer a serious blow from the elimination of federal
    funding. It is a little publicized fact that four states and
    the District of Columbia receive over half of the privately
    funded foundation grants for the arts. That doesn't leave much
    for the other forty-six states.
        In closing, I would like to call the Subcommittee's
    attention to a Dear Colleague letter that was recently
    circulated on the House side by Congressman Wally Herger. I
    have known and respected Wally Herger for many years, so I am
    not singling him out with any malice. Rather, I would like to
    use his letter as an example of the misinformation and
    misunderstanding surrounding the arts.
        The Dear Colleague is titled, ``NEA Funds Basketweavers,''
    lists the amount and recipient of the grant, and closes with,
    ``It's Time to Eliminate the NEA.'' The California Indian
    Basketweavers Association's receipt of a $60,000 grant to
    support the seventh and eighth statewide gathering of Indian
    Basketweavers, and the first Western Regional Basketweavers
    Gathering, is presented in the letter as an obvious reason for
    the elimination of the NEA.
        Indian Basketweavers in California, as well as all other
    basketweavers across the country, are artists in the purest
    sense of the word. The value of the intricately woven,
    detailed, and often functional baskets Indians weave is
    tremendous, in both the cultural and monetary sense. Indian
    basketweaving is not a hobby or frivolity to be demeaned or
    insulted. It is an important part of Indian history and
    culture, and as such should be treated with the respect it
    deserves. Without the grants provided by the NEA, the
    protection and promotion of an art form such as this is at
    risk. As a country, we run the risk of losing a national
    treasure if we target these programs as frivolous.
        I recommend that my Senate colleagues visit the California
    State Indian Museum in Sacramento. They have baskets there that
    fit on the head of a pin, woven with feathers from the chests
    of hummingbirds.
        On a personal note, I should tell you that my Staff
    Director of the Indian Affairs Committee has a Pima basket
    hanging on an eighth floor wall of the Hart Senate Office
    Building. It was woven by his grandmother with willow reeds and
    devil's claw, and won a First Premium Prize at the Arizona
    State Fair in 1968. In her eyes and in mine, it is the
    embodiment of heritage, family and artistic achievement, and a
    tangible treasure to be handed down from mother to daughter.
        In the way of proof, I have several baskets here for you to
    view. I thank Sally McClendon for bringing them in.
        Thank you, Mr. Chairman.

                    opening remarks of senator dale bumpers

        Senator Bumpers. Mr. Chairman, unlike you I intend--and you
    are chairman, so you will probably have your way, but I
    certainly intend to do everything--I would like to double or
    triple what the President asked for for NEA and NEH both.
        I have done a lot of work on the F-22 fighter--that is,
    trying to kill it--over the last 4 months, and I just made a
    quick calculation. If we gave NEA the entire $136 million the
    President requested, that would be roughly two-thirds of the
    cost of one F-22 fighter, and I invite everybody to use your
    imaginations as to where I would go if I had the time on that
    one.
        I can tell you that this society of ours--Justice Holmes
    said it one time. You pay taxes. Taxes are what you pay in
    order to live in a civilized society. That is a very profound
    statement, and the other day on tax day when everybody was
    saying we ought to abolish the IRS and all taxes, I pointed out
    that I do not enjoy paying taxes. I coughed up a big chunk last
    week, for me--not for some people, but it was a lot for me, and
    I did not enjoy it, but I do not begrudge it.

                          society's need for the arts

        While I do not enjoy paying taxes I do enjoy living in a
    reasonably civilized society, in what we all profess to believe
    is the greatest Nation on Earth, but I can tell you, one of the
    things that will cause this Nation to deteriorate and
    degenerate faster than anything I can think of is to literally
    turn your back on the arts and the humanities. They go right to
    the heart of the kind of country we are.
        You can tie the crime rate to this. The U.S. Government
    pays approximately $24,000 per inmate a year to house 106,000
    people in Federal prisons, and many times that amount in State
    prisons.
        Now, Jane, you have heard me make this speech before, but
    when I was Governor and would go to the penitentiary and have
    lunch with the inmates--it took me a long time just to get up
    my nerve to even go down there, because killings were fairly
    prevalent, and I thought I might be the next one.
        But I visited with the inmates in the dining room, had
    lunch with them, and in all the 4 years I was Governor and all
    the inmates I interviewed, I never ran across one that played
    in the high school band. I never ran across one that had a role
    in the senior class play. I never ran across one that had a
    college degree, though there were a few of them--not many--and
    so I could go on and on with those kinds of illustrations.
        What does that tell you? That is as graphic and as
    compelling an argument as I can think of for this program. It
    is about one-half what it was 4 or 5 years ago.
        We do not benefit greatly. I have some trouble with the
    funding formula, because a poor State like Arkansas--but we
    have a great repertory theater. We have got an amazing
    orchestra for a city the size of Little Rock, the concerts are
    all full. People enjoy it immensely. So you know, it is not all
    lost.
        My administrative assistant and I were driving to work this
    morning and she had been intending to go to New York last week
    to the opera. The only ticket left was $200, and that cooled
    her zeal for going to the opera, but she said that her brother
    had tried to get tickets and the entire Metropolitan season is
    sold out. There is not a seat left.
        Now, that speaks well for New York, and it speaks well for
    the country in a way, but I firmly believe that the National
    Endowment for the Arts is as essential to this Nation almost as
    our defense system, and I can tell you, if we were spending 10
    times more than we are spending you would see a much more
    civilized society.
        Those are my sentiments, Mr. Chairman.
        Senator Gorton. Thank you, Senator Bumpers.
        Senator Cochran.

                       opening remarks of senator cochran

        Senator Cochran. Mr. Chairman, let me join you in welcoming
    Ms. Alexander to our hearing and to thank her for her continued
    cooperation and good efforts in the job she has, which is one
    of the most difficult, I think, given the high visibility and a
    lot of the controversies that have swirled around the decisions
    made by the Endowment in the past.
        I think she has brought a keen understanding and a
    dedication to this job and its importance in our society; she
    has instituted a lot of changes, some welcome, some criticized.
    But the fact is there are new policies in place that have
    helped avoid some of the embarrassments of past grantmaking by
    the agency, but at the same time nurtured and encouraged
    creative talents throughout our country, particularly in small
    towns and rural areas of my State and others, which I think is
    something that is often overlooked by those who want to
    criticize or actually destroy the Endowment.
        I suppose I have been on this subcommittee longer than
    anybody has been on this subcommittee now, except maybe Senator
    Stevens or somebody on the other side of the aisle. One of the
    controversies I recall in my first Congress serving on this
    subcommittee is whether we would continue to make grants to
    individual artists, and we had a rollcall vote in this
    committee to overturn a recommendation by the new chairman of
    the subcommittee on that subject.
        So controversy is not new to this subcommittee. We have
    made a lot of decisions and tried to improve the operation of
    the Endowment and make it sensitive to the values that many
    people have about the appropriateness of certain kinds of
    projects that are federally funded or federally supported. But
    my conclusion is that Ms. Alexander has done a tremendous job,
    and we ought to commend her and thank her for her perseverance
    and her continued grace and dedication to doing the great job
    that is required of the chairman of the National Endowment for
    the Arts.
        Thank you.
        Senator Gorton. Ms. Alexander, perhaps the best compliment
    you have been given here is that there has already been a
    quorum of this subcommittee present. None of my previous
    hearings of this subcommittee have had more than three members,
    and in most of those cases, except for perhaps 5 minutes, I was
    there alone.
        I should also tell you there is another subcommittee of the
    Appropriations Committee meeting now. I know that both Senator
    Stevens and Senator Burns have felt that they have to be there,
    and each of the two of us also is missing a hearing of the
    Commerce Committee. So we are happy to have you here, and this
    attendance is an indication of the interest in your subject.
        At this point we have talked a lot. We will be happy to
    listen to your opening statement.

                      summary statement of jane alexander

        Ms. Alexander. Thank you, Mr. Chairman and members of the
    subcommittee. I am pleased to come before you today to speak in
    behalf of an agency that I think has had a remarkably
    successful 32-year history, and an agency to which I owe my own
    career as an actress, and to which I am eternally grateful for
    its existence.
        I would like to respond if I may to some of the Senators'
    fine remarks with regard to the agency and submit my testimony
    for the record.
        Senator Gorton. It will be included in the record.
        Ms. Alexander. Thank you.

                            federal role in the arts

        The investment that the Endowment has made over 32 years in
    the creative and imaginative life of our communities and our
    citizens everywhere and the quality of life in the communities
    and the economic development and vitality of some of those
    communities has been significant, specifically in its ability
    to leverage other public and private moneys and to provide
    opportunity and access for all. That has been the agenda for
    the Endowment for the Arts for all of its citizens.
        That commitment, that investment, is in jeopardy right now.
    We have had, as you know, almost a 40-percent budget cut in the
    past 2 years, and this has resulted in fully 1,000
    organizations nationwide that in the past received NEA grants
    not being given one this year.
        The fallout from that is significant. They are not able to
    leverage the money in the private sector. The States are not
    able to make up the difference, nor are the local arts
    organizations, and on and on. There is a real domino effect
    that happens here.
        A lot of people say, well, the Endowment's investment
    monetarily is a very small portion of what happens with regard
    to the nonprofit arts and how they are funded in the United
    States. That is true. Most of the nonprofit arts in the United
    States are funded by individual citizens, but there comes a
    point when we must say, how much more can we ask of these
    citizens?

                         nea makes the arts accessible

        You brought up the Metropolitan Opera and the ticket prices
    of the opera are indeed very high. What the Endowment helps do
    is make that Metropolitan Opera accessible through broadcast--
    and some of you may have seen on public television last night
    Andre Chernier was broadcast. The Endowment helped make that
    program possible so that people all across America could see
    that opera.
        Indeed, we continue to help support NPR in its broadcast of
    the Met on Saturday afternoons, which has been going on for
    ever and ever, and my own immigrant mother-in-law from Russia
    would never miss a Saturday broadcast of the opera, and there
    are many people who are unable to afford that $200 ticket who
    are able to have access to the Metropolitan Opera through the
    National Endowment for the Arts and other funders. The
    Endowment, again, plays that critical role of leveraging
    private funds.

                       private sector funding of the arts

        Let me talk for a minute about other than individual
    giving, which as I say makes up the bulk of giving to the
    nonprofit arts in the United States. Corporations have actually
    been declining in their giving to the arts. We think that we
    can encourage them to give more to the arts. Although they have
    increased nonprofit giving in general to the arts, it has
    remained fairly static. The same is true of the foundations,
    which say they cannot make up the difference.
        NEA continues to be the single largest donor to the
    nonprofit arts in the United States. We have been concerned
    with the fall-out in funding from the Federal Government, so we
    began an initiative last year called American Canvas, which
    seeks to encourage communities to build an arts infrastructure.
    We will feed them information with regard to models elsewhere
    that may be replicated in their community, and try to identify
    dedicated sources of revenue for the arts that may not have
    been tapped to date.
        Some people have said: ``Why doesn't the commercial
    entertainment industry come in and pay the cost of the
    nonprofit arts in America?'' First of all, I feel that that is
    a particular elitist view in that this is really an agency that
    belongs to all the people in America, and if you ask only the
    few very wealthy individuals some of our critics have been
    saying should fund it, you are actually becoming more elitist,
    I feel.
        Perhaps the corporate commercial popular entertainment
    sector could chip in more on that. We are working on that. It
    has not happened today, but I would like to point out that many
    individual celebrities do already give a great deal of money to
    the Federal Government in taxes. They also are supporting
    independently, through volunteering and philanthropy, arts
    organizations.

                          value of the arts to society

        But the NEA remains the agency that works well for all
    citizens. It is very difficult to quantify the value of arts to
    our society, but some of you may know, and have been hearing
    about, what the arts mean to early childhood development.
        There are evaluative studies that are going on now, and we
    will be seeing that the arts play more and more of a role in
    increasing brain power for not only our earliest, youngest
    citizens in society, but also for those who are elderly.
        New studies on Alzheimer's show we need to keep them
    thinking, keep them creative. The arts play a role there, and
    the NEA plays a role as well.
        Business knows the value of the arts. Business knows that
    they want the most creative thinkers right now going into
    business because things are changing so fast in the new
    technologies and in the world of communications in particular.
        As the wealthiest Nation on Earth, I have to say I continue
    to be mystified that the Federal Government of the United
    States does not invest more in the arts, in the future of its
    citizens. It is to my mind a win-win situation for everybody
    for the quality of life, for education of our young people and
    continuing education for our elderly, for economic development
    of communities, for creative thinking, for creative and
    critical thinking for all of our citizens, and for that
    amorphous thing we call the soul, which really cannot be
    quantified--inspiration.

                   need for government investment in the arts

        The United States is wealthy in many, many ways, and
    certainly financially. It is wealthy in the variety and the
    beauty of its land. It is probably most wealthy in its human
    resources, in the variety and diverse peoples that make up the
    United States of America.
        Although we are very proud to be Americans, it is the mix
    of our backgrounds, our coming together, our very differences
    that keep us vital, that keep us alive, that make America
    great. It is the celebration of the different heritages of our
    cultural identities that keeps us thinking, that keeps life
    interesting and meaningful, and it is the arts that celebrate
    that part of ourselves.
        It is in fact embarrassing to me that our Government does
    not invest more in the arts, that it in fact seems to be
    retreating from the recognition of the value of the arts to our
    Nation and the enhancement of the arts which so define and
    express who we are.
        At this time in particular, which is the close of one
    century, the beginning of another--in fact, the beginning of a
    millennium, certainly a marker for us in the Western World--I
    feel we should be expanding our commitment to the arts and
    humanities as our fellow nations worldwide, the major nations,
    are.

                               prepared statement

        Not long ago one of your colleagues was visited by two pig
    farmers who were sitting in the reception area waiting to see
    the Senator and picked up some information about the National
    Endowment for the Arts, and when they went to see the Senator,
    the first thing they said was, ``We only give 38 cents per
    person to the arts in America at the Federal level?'' The
    Senator said: ``Yes, we do,'' and the pig farmers said: ``When
    we invest so little, how can we be the best?''
        Now, I think it takes a farmer to understand what an
    investment means, but if we do not invest today in this Federal
    commitment to the arts we are really robbing our children's
    future.
        Thank you very much. I will entertain any questions.
        [The statement follows:]

                      Prepared Statement of Jane Alexander

        Thank you Mr. Chairman and Members of the Interior
    Subcommittee. I appreciate the opportunity to testify today
    about the importance of the National Endowment for the Arts.
        Today, Mr. Chairman, our longstanding Federal commitment to
    supporting arts and culture for the American people stands at a
    crossroads. For thirty-two years, the National Endowment for
    the Arts has led the way in making art accessible to average
    Americans in every city, small town and rural area of the
    United States. Now the issue before you is clear--will the
    Federal government continue to be a partner in preserving the
    cultural heritage of this nation--will it continue to invest in
    the creative potential of its citizens, and future generations?
        Or will we be the only major nation on earth to deny a
    Federal role in our country's artistic endeavors?
        The $99.5 million contributed to the arts and culture each
    year by the Federal government through the National Endowment
    for the Arts is a relative pittance--less than one-one
    hundredth of one percent of the Federal budget--less than 38
    cents from each American. Yet its impact is felt throughout the
    land, and an overwhelming majority of Americans have repeatedly
    said they want it continued.
        Mr. Chairman, I understand that this committee and a
    healthy majority of the United States Senate supports Federal
    funding for the arts. As you know, however, there are a few who
    are extraordinarily adamant in their desire to eliminate the
    National Endowment. They have undertaken a relentless campaign
    against the agency. They are rehashing old arguments and they
    are dredging up even older controversies. Two weeks ago they
    used a $750 grant that had been awarded in 1968, almost thirty
    years ago, as the centerpiece of their attack on the NEA.
        They criticized us for a grant the agency awarded a few
    months ago to the California Indian Basket Weavers Association,
    as if this world-renowned form of traditional art mastered by
    Native Americans was somehow not worthy of support.
        You will hear many arguments in the coming months about
    whether funding for the arts should continue. As Chairman, I
    have made the agency more accountable in accomplishing its
    fundamental mission of connecting Americans everywhere to the
    best art. Last year, in response to a 39 percent cut in our
    budget, I reorganized the agency in order to operate more
    efficiently with a drastically reduced staff. I restructured
    the entire grant review process from top to bottom, limiting
    most organizations to only one grant and consolidating our
    support for state arts agencies and regional organizations into
    streamlined Partnership grants.
        Despite this hardship, we have awarded 1,029 grants in
    1997. Two weeks ago, we announced new grants totaling almost
    $67 million, drawing to a completion the agency's first funding
    cycle under the new structure. We made 494 grants to
    organizations totaling almost $23.5 million in the area of
    Creation & Presentation for a wide range of projects that
    include music and theater festivals, design workshops,
    composition and choreography commissions, nationwide dance
    tours, major museum exhibitions, and hundreds of other
    projects. They ranged from a $50,000 grant for the Anchorage
    Concert Association to support a series of dance residencies
    with the world-famous Paul Taylor Dance Company in Alaska to a
    grant for Monadnock Music in Peterborough, New Hampshire, to
    support eighteen free concerts in New Hampshire's rural towns
    and villages.
        In the area of Planning & Stabilization, 125 grants
    totaling almost $10.5 million will help many of America's arts
    organizations achieve greater financial stability. These
    projects address many needs, from raising earned income and
    endowments to conducting feasibility studies, or adapting
    technology to develop new audiences. For example, the
    Cumberland County Playhouse in Crossville, Tennessee, which
    already serves more than 100,000 rural citizens and visitors,
    will reach out even further with a new cultural tourism
    campaign. The Artist Trust of Seattle will receive $100,000 to
    support the establishment of a self-sustaining endowment.
    Thirty thousand dollars awarded to the Balboa Art Conservation
    Center in San Diego will go to improving the collections
    storage needs of small to mid-sized museums throughout
    California, Arizona, Washington and Oregon. Seventy-five
    thousand dollars will help the Santa Fe Chamber Music Festival
    establish a cash reserve.
        By statute, 35 percent of the Endowment's program dollars
    are awarded each year through Partnership grants to the state
    and regional arts organizations creating a strong interrelated
    Federal, state and local system of support for the arts in
    communities throughout the United States. Sixty-two Partnership
    grants totaling $30 million were awarded two weeks ago, as were
    forty Creative Writing Fellowships, one of the few types of
    support to individuals still offered by the Endowment.
        We supported fifteen Leadership collaborations with other
    public and private organizations. These are projects of
    national importance that would not happen without the Federal
    government's commitment of resources and leadership, and they
    include such initiatives as Creative Partnerships for
    Prevention, a youth program run with the Department of
    Education offering the arts and humanities as an alternative to
    drugs and violence. Another award will support the Fund for
    U.S. Artists at International Festivals and Exhibitions.
        One of our most successful Leadership Initiatives is the
    ongoing Mayors' Institute on City Design which is dedicated to
    improving the design and livability of America's cities. Each
    year, the Institute holds a series of two-and-one-half day
    symposiums organized around presentations and round-table
    discussions. At each meeting, mayors and designers discuss
    specific problems facing cities and examine a broad range of
    ideas, precedents, and improvement strategies. Each mayor
    presents a case study of a critical issue from his or her city,
    and members of the resource team--nationally known architects,
    planners, and urban development experts--identify issues, offer
    suggestions, and discuss solutions. The interchange between
    mayors and designers sparks lively debate, opens new
    perspectives, and generates creative ideas. Since its inception
    in 1986, more than 300 mayors have participated in the
    meetings.
        A few months ago, in December, we announced the first
    grants made under our other two funding categories, Heritage &
    Preservation and Education & Access. In the area of Heritage &
    Preservation we approved 121 grants totalling $6.1 million for
    projects to preserve America's significant and unique artistic
    accomplishments for the benefit of our future generations--
    projects like the one sponsored by Cornerstones Community
    Foundation in Santa Fe, New Mexico, to help preserve the
    historic buildings native to the area, particularly the
    region's historic adobe churches.
        We supported important folk arts projects like the one
    sponsored by the Alabama Folklife Association to publish and
    document primitive Baptist hymns, and the one by the Cedarburg
    Corporation to help celebrate Wisconsin's sesquicentennial
    through a traveling exhibition of Wisconsin folk art. We
    supported statewide apprenticeship and support programs in West
    Virginia, Alaska, North Dakota, Hawaii and other states. We
    gave a grant to an organization in Falls Church, Virginia, that
    is using innovative technologies to safeguard and preserve our
    dance heritage. Finally, Mr. Chairman, we will continue to
    sponsor, as we have for many years, the annual Fourth of July
    concert and radio broadcast held on the grounds of the
    Washington Monument.
        Indeed, in December, we also awarded our first grants in
    the area of Education & Access, where priority is assigned
    specifically to arts education, and other projects that broaden
    the arts experience of millions of Americans. Many of the
    people who benefit from these grants have not always had the
    opportunity to participate in the enterprise of creating art or
    simply experiencing art as it is created by others, be it a
    night at the symphony, a children's festival, a concert in the
    park or a creative writing program.
        We awarded almost half of our Education & Access grants to
    performing arts organizations that are reaching out into their
    communities. The Chicago Theatre Group received $125,000 to
    support the Goodman Theater's student subscription series,
    giving many thousands of high school students the opportunity
    to attend free matinee performances. Similarly, the Houston
    Grand Opera will undertake a major audience development project
    with the help of a $200,000 NEA Education & Access grant, which
    they will match with one million additional dollars of their
    own. They are planning free performances of Carmen and Madame
    Butterfly, and will place young opera singers in the public
    school classrooms as artists-in-residence. They will reduce
    ticket prices and perform in over one hundred public schools in
    the region. Mr. Chairman and members of the Subcommittee, young
    Texans will have the opportunity to appreciate opera as they
    never have before.
        Through our Education & Access grants we are also
    continuing to support projects in many small towns like the
    Bloomsburg Theatre Ensemble's traveling educational project in
    Pennsylvania's elementary and middle schools, and West Liberty,
    Ohio's, Mad River Theater Works' development of a new play
    based on the local history of Champaign County. We are
    continuing to support Pittsburgh's Manchester Craftsmen's
    Guild, an exemplary inner-city community development center
    that uses the arts to provide young people with a safe haven
    and important job training skills. The corporate offices and
    laboratories of western Pennsylvania are filled with young,
    productive Americans who found their way in life with the help
    of strong mentors at the Manchester Craftsmen's Guild. If you
    are ever in Pittsburgh, you must visit the Guild. As a matter
    of fact, they are now the proud recipient of a Grammy Award for
    their first CD for Jazz at the Manchester Craftsmen's Guild.
        While I am confident that the Endowment has funded the best
    projects, I am disappointed that many excellent and extremely
    worthy projects were necessarily rejected due to the lack of
    adequate funding. Many applications submitted by some of
    America's finest arts institutions--large and small, in little
    towns and big cities--were necessarily rejected. That is the
    sad situation we face in our reduced funding state.
        And so, I am deeply concerned, Mr. Chairman, about the
    financial state of the nonprofit arts industry in the United
    States today. Grants from the Federal government are only part
    of a complex system of funding that includes ticket sales,
    program advertisements, corporate and foundation giving, gift
    shops, membership fees and other creative fundraising
    techniques. While earned income is a substantial part of any
    organization's budget, the cost of producing art for public
    consumption exceeds income for all but the most popular
    ventures. According to a study published last year by the
    President's Committee on the Arts and Humanities in conjunction
    with the Rockefeller Foundation, private and corporate
    foundations already give over $1 billion to the arts each year.
    They say they will not and they can not give more. In any case,
    corporate and foundation dollars are given locally,
    concentrating on the largest, most prestigious institutions,
    often in response to capital campaigns that include government
    support. Those dollars most often do not reach into small
    cities and rural areas. It is the Federal dollars that reach
    into those areas, and the Federal imprimatur which the NEA
    represents in the arts which attracts other monies.
        By government standards, the National Endowment for the
    Arts is a tiny agency. But it is also the largest single source
    of funding for the non-commercial arts in the country. It is
    the engine that drives other public and private investment in
    the arts, and it is not a drain on the economy by any standard
    of measurement.
        I agree with many Members of Congress and others who say
    that the commercial entertainment industry could do more to
    support the nonprofit arts. We are, after all, the incubator of
    artistic skills. Each year hundreds of directors, actors, set
    and costume designers, writers, producers, musicians and others
    who get their training and experience in the nonprofit sector
    make the jump to the big commercial entertainment companies. I
    have had some conversations with entertainment executives on
    this subject, but have not been particularly successful in
    persuading them to support the arts on a corporate level.
        In this respect, it is important to make a distinction
    between what the large entertainment companies do, and what
    individuals like Robert Redford, Steven Spielberg, and many,
    many others have contributed over the years. These individuals
    certainly have done their part in terms of contributing time
    and resources toward the furtherance of young artists and
    important art forms. And in this respect, I do not believe it
    is fair to criticize them or other influential individuals who
    come to Washington to advocate in behalf of Federal funding for
    the arts. They pay a considerable share of taxes like other
    citizens, and surely they have the right to advocate for the
    programs they care about.
        Mr. Chairman, as part of my effort to create a more
    holistic synergy between the arts and the communities in which
    they flourish, the Endowment in 1996 launched American Canvas,
    a year-long effort to bring together people from all walks of
    society to gain a better understanding of how the arts
    transform communities, and how they may be supported better.
    Funded almost entirely from private contributions, the
    Endowment convened forums in seven cities across the United
    States. Through these meetings, artists together with
    educators, businesspeople, clergy, elected officials, and many
    others worked together to develop new strategies for supporting
    the cultural infrastructure that every healthy community needs
    to have.
        The major objective of American Canvas, and the report we
    are working on now, is to give communities tools for
    understanding the value of their cultural attractions, and
    tools for preserving and enhancing those attractions. Mayors
    and other local leaders know culture has more to it than
    aesthetics. Culture makes cities livable and attractive.
    Cultural institutions can be the difference between winning or
    losing the competition for economic development.
        Mr. Chairman, I could go on about the many things we are
    working to accomplish, but I want to take a moment to consider
    some of the things that we are not able to do. Prior to 1996,
    the National Endowment for the Arts was averaging approximately
    4,000 grants each year. In fiscal 1996, a transition year in
    which we were cut by 39 percent, we made approximately 2,000
    grants under both the old and the new systems. In 1997, the
    first year in which new system was in place for the entire
    grant-making cycle, we expect to make about 1,100 grants. Many
    arts institutions that received grants in the past no longer
    do. And as you know, we are not permitted to make grants to
    individual artists at all, except in a few limited
    circumstances.
        Prior to 1996, the application-to-grant success ratio for
    organizations averaged about 60 percent. Today that ratio
    stands at about 35 percent, and there are many disappointed
    people as a result of it. In fact, they are quite skilled in
    making their displeasure known. They write to their elected
    representatives who write to me wanting to know why their
    constituents were rejected for funding. In many cases, I can
    only respond that we lack sufficient funds, and it is difficult
    to draw the line between projects that are all exemplary. We
    try to be as fair as we can.
        Finally, Mr. Chairman, I wish to assure you that President
    Clinton strongly supports the National Endowment for the Arts.
    The President's powerful and eloquent remarks about the arts
    and culture were unmistakable when he appeared before Congress
    in his State of the Union Address a few months ago. I would
    like to repeat his words today:
        The enduring worth of our nation lies in our shared values
    and our soaring spirit. So instead of cutting back on our
    modest efforts to support the arts and humanities, I believe we
    should stand by them and challenge our artists, musicians and
    writers--challenge our museums, libraries and theaters. We
    should challenge all Americans in the arts and humanities to
    join with their fellow citizens to make the year 2000 a
    national celebration of the American spirit in every community,
    a celebration of our common culture in the century that is past
    and in the new one to come in a new millennium so that we can
    remain the world's beacon not only of liberty but of creativity
    long after the fireworks have faded.
        Today, I am here to support the President's request of $136
    million for the programs of the National Endowment for the Arts
    in fiscal year 1998. We believe the increase in funding will
    permit us a modest increase in the work we are doing to support
    arts education projects, access and outreach to underserved
    communities, new technologies, the coming millennium
    celebration, and finally, the help we give to arts
    organizations in every part of the United States to preserve
    our heritage and invest in our future. The National Endowment
    for the Arts remains committed to bringing the most excellent
    art to the most Americans. Mr. Chairman and members of the
    subcommittee, I hope I can count on your support.
        Again, I am pleased to have this opportunity to speak with
    you.
                                    ------

                     Biographical Sketch of Jane Alexander

        Jane Alexander was nominated by President Clinton to become
    the sixth Chairman of the National Endowment for the Arts in
    the summer of 1993. After unanimous confirmation by the U.S.
    Senate, she was sworn into office by Supreme Court Justice
    Sandra Day O'Connor on October 8, 1993.
        Since becoming Chairman, Ms. Alexander has visited more
    than 200 communities in all 50 states and Puerto Rico. In over
    300 public speeches, she has outlined her vision for the agency
    with thousands of people. She has met personally with Members
    of Congress, governors, mayors, state legislators, artists,
    administrators, and corporate, education and community leaders
    throughout the nation. Taking up the challenge of President
    Clinton to ``renew America,'' Chairman Alexander has spoken out
    about how the arts can contribute to better schools, more
    vibrant local economy, and stronger communities.
        As part of the Clinton Administration's efforts, she has
    strengthened some 30 partnerships with other Federal agencies.
    Under Chairman Alexander's leadership, the Arts Endowment began
    a partnership with the Department of Justice serving at-risk
    youth through the arts. The Endowment has also formed
    partnerships with the Department of Education for improved arts
    education research and development.
        Six months after taking office, Chairman Alexander convened
    the first national arts conference organized by the Federal
    government, ``Art 21: Art Reaches into the 21st Century.'' From
    this foundation, she has developed her priorities for investing
    in communities, education, new technology, preservation of our
    heritage, and partnerships for the arts. In 1996, the Endowment
    launched ``The American Canvas,'' a series of community forums
    to find systemic ways of supporting the arts. As part of the
    agency's efforts, Chairman Alexander established the Office of
    Enterprise Development to seek new ways to support the arts.
        In the face of Congressional budget cutbacks, she has
    successfully completed a total reorganization of the Arts
    Endowment, emphasizing partnerships and cross-disciplinary
    initiatives, including a category for Millennium Projects to
    celebrate American art at the turn of the century. Chairman
    Alexander has created new tools for public access to the
    agency, including the Arts Endowment's World Wide Web site, and
    she has initiated a $1 million leadership initiative with the
    Benton Foundation to increase opportunities for artists and
    small arts organizations to improve communications through the
    Internet.
        For her leadership, Ms. Alexander has received a number of
    honors, including the 1995 Montblanc de Culture North American
    Award, the Common Wealth Award, the Crystal Award and the Sara
    Lee Frontrunner Award for her bringing the arts to the American
    people. She is a much sought-after public speaker and has given
    commencement addresses at The Juilliard School, the UCLA School
    of the Arts, North Carolina School for the Arts, the University
    of Pennsylvania, Princeton University, Washington University of
    St. Louis, the New York High School for the Performing Arts,
    the College of Santa Fe, and Duke University.
        Ms. Alexander, a native of Brookline, Massachusetts, has
    been active in the arts for all of her adult life as an award-
    winning actress, producer, and author. In addition to
    appearances in 40 films and television programs, she has
    performed in over 100 plays on stages across the country. Ms.
    Alexander received six Tony Award nominations, four Academy
    Award nominations, and five Emmy Award nominations, and she
    received a Tony Award for The Great White Hope and an Emmy
    Award for Playing for Time. She also received the Television
    Critics' Circle Award for her portrayal of Eleanor Roosevelt in
    Eleanor and Franklin: The White House Years.
        Ms. Alexander has produced three films, including the
    acclaimed A Marriage: Georgia O'Keeffe and Alfred Stieglitz for
    PBS's ``American Playhouse.'' She has narrated documentaries,
    short stories and books, and is co-author of an adaptation of
    Henrik Ibsen's The Master Builder and co-author of The Bluefish
    Cookbook.
        Prior to becoming Chairman, Ms. Alexander served as an
    effective and articulate advocate for a number of worthwhile
    causes, including Women's Action for New Directions, the
    Wildlife Conservation Society, and the National Stroke
    Association. In recognition of her leadership, she received the
    Living Legacy: Jehan Sadat Peace Award in 1988.
        Ms. Alexander attended Sarah Lawrence College and the
    University of Edinburgh. She was born on October 28, 1939 in
    Boston, the daughter of surgeon Thomas B. Quigley, one of the
    pioneers in the field of sports medicine and Ruth Pearson, a
    nurse in neurosurgery. Her grandfather Daniel Quigley was
    Buffalo Bill's personal physician in North Platte, Nebraska.
    Ms. Alexander is married to director Ed Sherin. Her son, Jace
    Alexander, is a stage and film director.

                                romanov exhibit

        Senator Gorton. Ms. Alexander, I would like to ask you a
    question about an incident related to the arts and/or the
    humanities that has been on the front pages of our newspapers
    here for the last 2 or 3 days. Through the Arts and Artifacts
    Indemnity Act, do you have anything to do with the large van
    that has been sitting out on the street here and is now at the
    Russian Embassy?
        Ms. Alexander. No; that is one controversy we will not take
    credit for. [Laughter.]
        We did not indemnify the Romanov exhibit.
        Senator Gorton. Well, I am sorry to hear that. I was
    looking forward to your comments on that one. [Laughter.]
        In spite of my opening remarks, there still is a debate
    continuing on the existence of the National Endowment for the
    Arts itself, as I said, primarily in the House of
    Representatives. Could you, for our information, and in
    reaching our decisions here in this Appropriations Committee,
    give us a status report on your discussions with Members of the
    House on this subject? Do you have any reason to believe that
    our counterpart in the House will include an appropriation for
    the National Endowment?

                    status of nea appropriation in the house

        Ms. Alexander. We do not know the answer to that, although
    we are speaking with Chairman Regula fairly often. We do not
    know what he intends to do, or what the subcommittee intends to
    do with regard to appropriations. What we fear is a zero
    appropriation, and then that does not leave a lot of
    negotiating room for the Senate and for the administration.
        At $99.5 million, Mr. Chairman, we really cannot go lower,
    and in fact we are losing ground even if we were level-funded,
    because of cost-of-living increases and administrative costs.
    We have to make up the difference.
        Senator Gorton. When you are faced with arguments about
    elimination, do they stem in your view primarily because of
    criticism of particular grants, or primarily from the argument
    that this is not an appropriate role for the Federal Government
    whatever the grants are?
        Ms. Alexander. A little of both. I think that there are
    some of our critics who just feel that we have been funding a
    lot of controversial works, which, by the way, is not true, and
    others who simply do not think that it is an appropriate
    Federal role. I disagree with that, of course. I think it is
    the most appropriate Federal role.
        Senator Gorton. So you have to deal constantly with both of
    those arguments?
        Ms. Alexander. Yes, indeed.
        Senator Gorton. Now, it looks as though the sympathy you
    have in the Senate may very well result in at least the report
    of a reauthorization bill from the Senate Labor and Human
    Resources Committee. Can you comment on that? Are you looking
    for any significant changes in your authorization here?

                         status of nea reauthorization

        Ms. Alexander. I do have a hearing before the Senate Labor
    and Human Resources Committee next week with regard to
    reauthorization. We do not know exactly what that means yet. We
    will be looking for a 5-year reauthorization of the agency,
    which has not been reauthorized since 1993.
        Senator Gorton. Would you be relatively content just to
    have a 5-year reauthorization based on the present statute?
        Ms. Alexander. That is correct.

                      possible consolidation of endowments

        Senator Gorton. On another subject that you have discussed
    before, I would like your current remarks. It is the proposal
    to consolidate the two Endowments. Would you share with us your
    views on it? Are there any pluses that it might have from an
    administrative standpoint, or obstacles that might be
    encountered due to inconsistency with different goals?
        Ms. Alexander. Yes; I would be glad to. We did explore a
    merging of the two agencies at Congress' request 2 years ago,
    and we continue to look at how we might merge the
    administrative functions, but right now we are pretty bottom
    line, both of us, and there would be no cost savings in merging
    the two agencies.
        We share as much as we can already, and we share library
    space and some of the staff and so on, but we do not see any
    savings to the Federal Government emerging at this time.

                             reorganization of nea

        Senator Gorton. One more subject and then I am going to
    defer to my colleagues. During last year's hearing you had just
    reorganized the agency from 17 different disciplines into four
    broad categories. Can you tell us now how this is working, and
    whether or not you are satisfied with the change?
        Ms. Alexander. Yes; our four categories seem to be working
    very well. It was a hard learning curve for our arts
    organizations this year because they were restricted
    legislatively from applying for seasonal support and had to
    apply for project support only, and they had a very short time
    line in which to accomplish this.
        We feel that this coming year will be easier for everybody,
    that they know the process somewhat. Our staff, which as you
    know I had to reduce by about 45 percent, is now understanding
    the process better as well, and they are spending more time
    than ever on the phone with the constituents across the
    country.

                        application and grant statistics

        Senator Gorton. Is it going to mean, or has it meant an
    increase or a decrease in the number of applications and the
    number of applicants?
        Ms. Alexander. Yes; we sought a decrease in the number of
    applications, asking organizations only to apply for one
    category, one grant.
        Senator Gorton. Decrease in the number of applications? Is
    there a decrease in the number of applicants?
        Ms. Alexander. Applicants? Yes, indeed. Well, the bulk of
    them came when there was a prohibition against funding
    individual artists, with the exception of literature. We
    reduced our applicants by about 9,000 right there, and we now
    have applications from about 3,000, and we funded 1,000.

                          nea partnerships with states

        Senator Gorton. As part of that new program structure State
    grants were consolidated into State partnerships. Has that
    created a favorable response from State arts agencies?
        Ms. Alexander. Yes; I think so. We are very pleased with
    our partnership meetings with the States. We already had a real
    partnership with the States, but what we wanted to do was look
    at the States State-by-State, if you will. So now every 2 years
    we bring in a State in a small colloquy of about five to six
    other States and we discuss our mutual problems with regards to
    serving the arts constituency in that State. It seems to be
    working very well.
        Senator Gorton. Good. At this point, while I have more
    questions, I think I will defer to my colleagues, who may or
    may not have as much time as I have.
        Senator Bumpers, have you any questions?
        Senator Bumpers. Mr. Chairman, I do not have any questions.
        Ms. Alexander, I would like to echo Senator Cochran's
    words. I think you have done an excellent job under very
    difficult circumstances, Ms. Alexander.
        Ms. Alexander. Thank you.
        Senator Bumpers. You have my undying gratitude, and I am
    sure I do not just speak for myself but many others.
        Ms. Alexander. Thank you, Senator.
        Senator Gorton. Thank you, Senator.
        Senator Campbell.
        Senator Campbell. I was just musing about the arts here
    while listening to Ms. Alexander, Mr. Chairman. I used to teach
    art. I was involved in it pretty deeply for years and years, as
    you probably know, and I have a friend in Washington here, a
    lady, who is awful. She paints, and she showed me a picture the
    other day, a portrait of the late Rock Hudson that looked
    suspiciously like Quasimodo. [Laughter.]
        But you know, I do not have to like the result to support
    the effort, and I am convinced that with enough training and
    effort, that her future portraits of Rock Hudson will look at
    least like John Wayne. She is getting better. [Laughter.]
        I want also to associate myself with the comments of
    Senator Bumpers when he talked about prisons. I think you
    mentioned $26,000 a year.
        Senator Bumpers. No; $24,000.

                    importance of the arts in penal systems

        Senator Campbell. $24,000 a year is spent to house convicts
    in prison. I understand also it is about $1 million a cell to
    build them, and they are going up at about twice the rate of
    our college population. If you were to graph it, not in total
    numbers, but if you were to graph the last 10 years there are
    one-half million more new convicts, and I am very well aware of
    what you are talking about, since I was once a counselor, a
    volunteer counselor in Folsom Penitentiary in California,
    Senator Boxer's State.
        But I just wanted to mention that prisons have seen a great
    number of people who have gotten involved in the arts when they
    were in prison. Almost every Federal penitentiary that I know
    of now has a prison art show every year. They have a store, a
    craft store where prisoners can sell their arts and crafts, and
    it gives them an opportunity to raise a little bit of extra
    money from doing laundry, making license plates, or whatever
    else they do in prisons.
        When I was at Folsom, a couple of times I judged the Folsom
    Prison art show. I was amazed at some of the talent that they
    have, and obviously they have some talents that went the wrong
    way or I guess obviously they would not be in there, but I was
    amazed at that.
        And when I was a counselor I was also working in a half-way
    house that helps get convicts back into the mainstream, get
    them jobs to stay out of trouble, and a number of them that got
    out of prison those years I was doing that ended up making a
    living in arts, being painters or jewelers or something, so I
    know there is a connection there.
        Senator Bumpers. Senator Campbell, would you yield for just
    a little personal vignette?
        Senator Campbell. Yes, sir.
        Senator Bumpers. I was Governor of Arkansas in 1972, and
    Betty Bumpers, who was an art major, got a $50,000 grant from
    Nancy Hanks, who was then head of the National Endowment for
    the Arts, and the $50,000 was to do some pilot programs of
    teaching art in the first grade of the elementary schools. I do
    not know, it was maybe 20 schools, or 30 or more, and she had a
    little money left over. She took it down to Cummings Prison and
    did a little art program down there, and those inmates flocked
    in to participate in that. Betty said it was absolutely
    remarkable how talented some of those people were.
        The point of the story being, if there had been early
    intervention in the form of finding that talent among those
    children, they would have been challenged in the first grade
    and had a chance to demonstrate their art. They would not have
    been there.
        Senator Campbell. The reason I made that comment is because
    I know that every questionable grant the NEA gives gets a
    heated debate started, as you might imagine. I do not know if
    you are giving any for prisoners or not, but if you give any
    for prisoners we are going to start getting mail on that.
        I think as Senator Bumpers said there is some real value in
    arts for people who are incarcerated. It has been proven many
    times. People in hospitals who have psychotic problems, even,
    the arts help, so it is a much broader issue than we normally
    view here.

                  economic consequences of agency elimination

        I just wanted to ask you maybe a couple of questions. You
    mentioned the economics of the arts, but I was trying to put a
    dollar figure on that. Do you have any guesstimates about if
    the funding of the NEA were cut off what would the economic
    consequences be, because you mentioned corporate money is
    drying up, State money, they are reluctant to give any money if
    we do not help out with grants and things of that nature, but
    do you have a dollar figure?
        Ms. Alexander. It is hard to quantify because there are
    always so many partners that go into funding the nonprofit
    arts. Some of the studies that have been done independently in
    places like New York and New Jersey, show that the impact on
    the metropolitan area from the arts at large, including the
    commercial sector, is absolutely enormous--billions of dollars.
        It is very hard to be able to say what it would mean. All I
    can tell you is that we reach people through the public sector
    that are not covered by the private sector, such as your
    eloquent testimony with regard to the basket-makers. What
    corporate sponsor is going to pick up the California Indian
    Basket-Makers Association?
        So I think it would amount to billions of dollars, but I
    have no way of actually knowing.

                      geographic distribution of nea money

        Senator Campbell. Another thing I am interested in is, we
    hear there is something like 50 percent of all of the grants go
    to just a couple of States. New York is an example, a lot to
    the District of Columbia also, and the further away it gets
    from the east coast, particularly in the rural areas and poorer
    areas, the less they get. How does the National Endowment for
    the Arts respond to the needs of those rural, kind of out-of-
    the-way places? I know that they have in this case, but let us
    say, Appalachia or somewhere else.
        Ms. Alexander. Well, I am very glad that you brought that
    up, because in fact although we do give a lot of money to New
    York, of course we get the bulk of our applications from New
    York and California, the two main talent pools, if you will,
    for almost all the arts, everything from design to music, and
    so on.
        But as I pointed out with the Metropolitan Opera and the
    broadcasts, what we try to do is facilitate through our New
    York grantees national impact, and there are many, from
    broadcasts on NPR and PBS to the Paul Taylor Dance Co., which
    tours the country, to Alliance for Young Artists and Writers
    that tours the country, and so on.
        So our New York grantees, we must keep in mind, are not
    just going to stay in New York for the most part. They are
    going to tour. Their impact also serves the tourists that come
    from out of town to New York.
        We reach rural areas to the very best of our ability, and
    we were very pleased in our latest grant round that fully 25
    percent of our grants went to organizations with budgets under
    $250,000, so that means we are reaching the small arts
    organizations, the ones that may be in Telluride or small
    communities everywhere.

                         nea programs for at-risk youth

        I would like to bring your attention, since you were
    talking about prevention and what the arts can do for those who
    are incarcerated or have other problems. This is one of our
    newest publications, called Art Works--you may have it in front
    of you--Prevention Programs for Youth and Communities.
        One of the most outstanding organizations in New Orleans,
    called Young Artists, Young Aspirations, began as a visual arts
    program for kids after school at a visual arts gallery called
    Ya-Ya in New Orleans.
        To make a long story short, last year they received a very
    fine commission to create the fabric for the United Nations,
    and this is a copy of some of the slipcover fabric that they
    created for the chairs in the United Nations. These young
    people all have careers now in the arts, and they began with
    after-school programs for kids who were kind of hanging around.
        Senator Campbell. And they got part of their initial
    funding through the National Endowment for the Arts?
        Ms. Alexander. Through the National Endowment for the Arts,
    correct.
        Senator Campbell. That is a good graphic illustration.
        Thank you, Mr. Chairman.
        Senator Gorton. Thank you. Senator Cochran.
        Senator Cochran. Mr. Chairman, I noticed in Ms. Alexander's
    statement the reference to the Creative Partnerships for
    Prevention Program, a youth program run with the Department of
    Education offering the arts and the humanities as an
    alternative to drugs and violence.
        I wonder, this collaboration with other organizations like
    this, is this something that you have had an opportunity to
    judge in terms of whether there are success stories, or has it
    just been started? Do you know any of the results that you
    could pass on to the committee?
        Ms. Alexander. The evaluative studies about the importance
    of arts in helping our young people in particular are ongoing
    currently, and one of the partnerships that we have with the
    Department of Justice is just that.
        It is an evaluative study to understand quantifiably what
    the arts do for young people, and to follow them after these
    programs. I think that is very important for us to begin to
    know whether they are going to sustain the arts in their life,
    whether it impacts their thinking about how they relate to
    society, and so on.
        So that is one of the partnerships we have going with the
    Department of Justice in this regard.

                                american canvas

        Senator Cochran. Another new initiative that I noticed in
    your statement was the American Canvas, where you are working
    with local communities to identify cultural assets and how they
    can be used to enrich the lives of the citizens there and be
    contributors to the economic progress of those communities.
        Tell us how that is working. Are there any anecdotal items
    of evidence that you can pass along for our hearing record?
        Ms. Alexander. Senator, we went into six cities. We went
    into Charlotte, NC, and Rock Hill, SC, which was one visit.
    Rock Hill, SC, is a very small area that has revitalized itself
    through the arts, and Charlotte, NC, of course, is a pretty
    large city now, and it has totally transformed itself with a
    great deal of money going into the arts in their community.
        We visited Salt Lake City, we visited Los Angeles, we
    visited San Antonio, TX, we visited Columbus, OH, and we
    visited Miami as well, and we held day-long or 2-day forums
    about the value of the arts to their communities and how they
    intended to sustain them for the future. We are concerned that
    there is not a solid infrastructure for the arts in the United
    States, as there is, and growing, for our natural resources.
        We do fund our parks and almost every city funds parks and
    recreation, but there is not a dedicated source of revenue in a
    community--in all communities for our cultural resources--so
    that is what we were trying to build and to discuss and to
    explore. We will have a report out, our American Canvas report,
    and also an action plan for communities everywhere, sometime in
    June.
        Senator Cochran. Thank you very much. Thank you, Mr.
    Chairman.
        Senator Gorton. Thank you. Senator Bennett.
        Senator Bennett. Thank you, Mr. Chairman. I recognize the
    special session or executive session is convening and,
    therefore, I need to be brief but I did want to welcome Ms.
    Alexander to the committee and to thank her publicly for coming
    to Salt Lake City. She made a big hit there, as she always does
    wherever she goes, and I want to thank her for her general
    leadership in this area as a whole.
        I do also want to wish Sheldon Hackney well in his new
    activities as he moves on, and have the unfortunate
    responsibility of commenting that the director of the
    Humanities Council in the State of Utah, Delmond Oswald,
    unexpectedly and tragically died recently, which leaves for us
    in Utah a fairly significant hole in our leadership.
        But we are trying to do what we can to see to it that we
    continue the tradition that goes all the way back to Brigham
    Young and the founders of the State of appropriate public
    support for the arts and humanities. I will do what I can at
    the Federal level to see that the appropriate support is
    continued.
        With that, Mr. Chairman, I suppose we all want to be off to
    find out more about chemical weapons. Maybe we already know
    enough, but that is where I am going to have to go.
        Senator Gorton. Thank you. Senator Gregg.
        Senator Gregg. I will associate myself with the comments of
    the Senator from Utah, which I think are very appropriate, and
    allow us to adjourn.
        Senator Gorton. Oh, we are not going to adjourn. You can
    leave if you wish, but we do have quite a bit more to go.
        Senator Gregg. Well, in that case I could take the next
    hour and give you my thoughts on this subject. [Laughter.]
        Let me just say that I do believe that Government funding
    for the arts and humanities makes sense. As Governor, I
    actually increased funding for those programs during a time of
    serious recession, because I felt it had a positive effect on
    the culture of the State, and I believe it has a positive
    effect on the culture of the country.
        We all recognize that the NEA funding has been
    controversial. Art is by nature controversial. I do think the
    leadership of the NEA has tried to be sensitive to the fact
    that these are tax dollars and should be managed effectively,
    and should be managed with some sensitivity to the fact that
    you are dealing with tax dollars and not with private money.
    Thus, aggressiveness which can be used in funding has to be
    muted to some degree, but I think on balance these
    organizations have done a good job, and I believe they deserve
    our support.
        I will pass on questions.
        Senator Gorton. One more comment, Ms. Alexander. I
    commented on the attendance here today. It has now increased.
    My roster indicates that 10 of the 17 members of the
    subcommittee have attended.
        I have a note here from Senator Domenici asking me to
    apologize for his absence. He is chairing the other
    subcommittee on appropriations that is meeting right now that
    so many of us, myself included, are members of, and of course I
    cannot avoid that. Many of the Democrats, as Senator Boxer
    said, are at the White House to discuss the budget.

                           states support of the arts

        But you have had a very impressive turnout here, and I have
    quite a number more questions, but most of them will be
    submitted to you in writing. I would like you for the record to
    indicate the overall level of public support for the arts in
    the United States. Do you know approximately how much State
    appropriations are for the purpose, and how much local
    government contributes to the arts, so that we have an overall
    long-term picture?
        Ms. Alexander. I do have those figures, but they are not
    right at my fingertips.
        Senator Gorton. Well, let me read my notes to see if they
    are accurate. My notes are just over $265 million through State
    art agencies in 1995, and an estimate of around $650 million
    from local government allocations. Does that comport with your
    figures?
        Ms. Alexander. Yes; that is correct.
        Senator Gorton. Have these been constant, or have they been
    going up?
        Ms. Alexander. It is State by State. The State
    appropriations actually have gone up in the last few years, but
    they are still not where they were in 1990. As for locals, I do
    not know the answer to that.
        Senator Gorton. Now, is it your view that much of the State
    and local support is engendered by the fact that there is an
    NEA, that there is an overall national leader? What role do you
    play in this process?
        Ms. Alexander. Senator, I do not think that State
    appropriations are specifically tied to the National Endowment
    for the Arts, but what I want to stress is that this is a
    partnership that works, that really, really works. We are able
    together to leverage even more resources than we could do
    separately. We are proud of our partnership with the States. We
    feel it is important to continue, and that we play a very
    important role for them.

                            chairman's action grants

        Senator Gorton. Under the law, the authorization, 10
    percent of funds can be awarded by the Chairman without any
    prior review, just simply on your own. Do you do any of that?
        Ms. Alexander. Very, very rarely. Very rarely, and as a
    matter of fact this year maybe I have made two or three
    independent grants.
        Senator Gorton. What would be the circumstances for that
    decision?
        Ms. Alexander. Where somebody was in real danger of having
    some real problems with a project, not controversial problems,
    but that just needed a little boost for something that was
    very, very important, for an organization that we really
    believed in, that somehow missed the deadline or something like
    that.
        It is so rare, and this year because of our decline in our
    program funds, I am not going to do it at all.

                     nea support of american artists abroad

        Senator Gorton. On another subject, has NEA played any role
    in supporting an American artistic presence abroad?
        Ms. Alexander. We do play a role. To my chagrin it is
    paltry compared to the other nations, who import a lot of our
    artists. When I meet with fellow ministers of culture or
    Ambassadors it is clear that we are not doing enough in this
    regard.
        As the Greek Cultural Minister said to me only a few weeks
    ago, he said, ``Thessalonike is the cultural capital of Europe
    this year, and they are having a long summer arts festival, and
    the United States is severely underrepresented,'' and asked
    what could I do about it, and I had to reply that there was
    really very little I could do about it.
        But we do maintain some of our international programs. Our
    international program is an $800,000 program, and it is hardly
    enough to send our major artists abroad.

                             income recovery policy

        Senator Gorton. Finally, the National Endowment for the
    Humanities has an income recovery policy from particularly
    successful projects. Does NEA have anything comparable?
        Ms. Alexander. We have the ability to recover some funds,
    but I would like to point out that the individual artists that
    we funded in the past, which is where one might garner money
    for the future when they become successful, most of them remain
    in the nonprofit art world and they do not make a lot of money.
        I mean, a Pulitzer Prize winner does not necessarily
    translate into a big marketplace book that is going to be a
    windfall for that individual writer for the rest of his or her
    life, although the NEA has funded a great many fellowships that
    then go on to be Pulitzer Prize winners, book or prize winners
    and so on.
        With regard to organizations, for example, an organization
    like the Public Theater in New York, which has a current hit in
    ``Bring in Da Noise, Bring in Da Funk'' on Broadway, a very
    successful musical, or in the past had a megahit in ``Chorus
    Line,'' that money is plowed back right into the nonprofit
    organization, and just creates more opportunity for people to
    have theater for everybody, so we do not think it would be
    particularly an effective mechanism.
        Senator Gorton. Ms. Alexander, as always you have spoken
    eloquently on behalf of your Endowment. We appreciate it, and
    we will certainly be calling on you as we attempt to determine
    what we can come up with and how it ought to be divided up.
        Ms. Alexander. Thank you very much, Mr. Chairman and
    members of the committee.

                         Additional Committee Questions

        Senator Gorton. Thank you very much. There will be some
    additional questions which will be submitted for your response
    in the record.
        [The following questions were not asked at the hearing, but
    were submitted to the Endowment for response subsequent to the
    hearing:]

                         Additional Committee Questions

                                 agency mission
        Question. Since its founding, NEA has played a major role in the
    decentralization of the arts. State arts agencies and local arts
    councils have been established in all fifty states and the arts have
    been made available to a much broader constituency throughout the
    country.
        Has NEA's success in making the arts more accessible to all
    Americans resulted in redefining the role of the federal endowment vis-
    a-vis the states? Does an established state network of arts agencies
    bring with it a different set of requirements that are sought from the
    national endowment than were needed as the network was being created?
        Answer. The Arts Endowment and state arts agencies have long played
    critical and often complementary roles in making the arts more
    accessible. For example: state arts agencies often assist in the
    development of emerging local groups that later receive Endowment
    support for projects of regional, national or major field significance;
    state arts agencies often assist community groups that present touring
    events created with Endowment assistance; and state arts agencies
    provide the link between the Endowment's arts education initiatives and
    the classrooms or community venues in which they come to fruition.
    Progress in making the arts more accessible has not--in itself--changed
    the role of the Arts Endowment in relation to the states. However, a
    partnership between state arts agencies and a strong national arts
    agency continues to be essential to the goal of making the best art
    available to the greatest number of people.
        It has been many years since the network of state arts agencies
    required the kind of ``hands on'' technical assistance that was needed
    as these agencies were being created in the late 1960's and early
    1970's. However, in other respects there has not been much change with
    regard to what these agencies require of their federal partner. Even
    though aggregate state arts appropriations have grown, the federal
    dollars are still critical. For seven agencies, the Endowment's support
    still exceeds the amount of the state appropriation, and for thirteen,
    the federal support amounts to more than a third of their budget. Even
    for states with large appropriations, the federal funding provides much
    needed flexibility. While state arts agencies look to the Endowment for
    national leadership in arts education and other areas, the two now
    operate as true partners. Many state arts agency directors and
    commissioners have stated that without the example and incentive
    provided by the Arts Endowment, some agencies would lose their state
    support, and the working network of state arts agencies would be
    greatly weakened or cease to exist.
        Question. Has the agency's mission, or the execution of it, changed
    over the years? If you had the opportunity to redefine the NEA's
    mission, are there ways in which you would change it? Or do you believe
    that mandate under which you've operated over the years remains
    relevant?
        Answer. The mission of the National Endowment for the Arts is to
    foster the excellence, diversity, and vitality of the arts in the
    United States, and to help broaden public access to the arts.
    Throughout our 32-year history, beneficiaries of our mission have been
    the participants, audiences, and communities who are provided access to
    the best contemporary and traditional American art and opportunities
    for lifelong learning in and through the arts. Our service, while
    focused primarily on grantmaking, also includes leadership activities
    such as technical assistance, research and dissemination of information
    on the arts of national importance, and providing a forum for
    addressing national and regional issues in the arts.
        The National Endowment for the Arts is unique in that it is the
    only federal agency established expressly to nurture and support arts
    and artists of the highest quality. Further, in establishing the
    Endowment, Congress declared that ``the arts and the humanities belong
    to all the people of the United States,'' and the Arts Endowment was
    founded to help ensure that all Americans indeed had access to artistic
    activity of excellence and merit. In meeting this charge, not only have
    Endowment grants reached into all 50 states, but the agency supports
    projects having the potential to serve the entire nation. Through its
    programs, the Endowment has helped support the arts and cultural
    activities of the more than 170 different ethnic groups that live in
    every corner of the United States.
        The Endowment serves as a catalyst, the national identifier of
    artistic excellence and merit, and the leader in helping arts
    organizations and regional, state, and local arts agencies obtain
    access to potential governmental partners. For example, without the
    Endowment, federal programming in literature with national
    organizations such as the YMCA and the American Library Association
    would cease. Identifying and funding programs which help assure
    accessibility to arts activities for disabled people across the country
    would suffer. Leadership in convening over 100 representatives in the
    arts, education, business, and other sectors toward achieving a
    national strategy to implement locally arts education standards as a
    part of Goals 2000 would be missing.
        The Endowment also helps leverage private funding for the arts.
    Grants from the Arts Endowment require recipient organizations to match
    their awards 1:1 or 3:1, depending upon the program. The credibility of
    the Endowment as the national identifier of artistic excellence and
    merit has proven to be an important tool for grantees.
        Public arts funding at the state and local levels does not bring
    the national leadership and leveraging capability that results in
    partnerships and collaborations with the Endowment. Further, a 1994
    survey revealed the central role of the Endowment in building a
    national infrastructure of support for American folk and traditional
    arts, and in leveraging an increasing annual level of private and local
    support for traditional American art.
        The Endowment provides national coordination to the Federal/state/
    local partnership. Prior to the inception of the Endowment, only five
    state arts councils existed. The Endowment helped create arts agencies
    in all 50 states and the six special jurisdictions, and subsequently
    nurtured the federal/state/local infrastructure in support of the arts.
    Fully one-third of the Endowment's budget goes to these state arts
    councils, but only after careful review by a national level panel of
    their annual plans for programs supporting the arts in their
    communities. This enhances the effectiveness of inter-and intra-state
    programs.
        Additionally, it is the leadership provided by the Endowment that
    helps sustain the country's artistic and cultural heritage by
    supporting traditional and contemporary art forms often not funded or
    underfunded at the state or local level or by the private sector. For
    instance, only six of the 56 state and jurisdictional arts councils
    have dedicated programs and staff in literature. Independent literary
    publishers exist in a specific community, but their audience is
    national. And certain art forms, such as design, are not funded by most
    states (in the case of design, 75 percent of state agencies have no
    such funding category). Touring across state lines in art forms such as
    dance occurs because of the Endowment's leadership, and its involvement
    further assures that the touring reaches small and rural communities.
    Because its perspective is national, the Endowment is positioned to
    identify and serve traditionally underserved (geographically isolated
    rural, inner-city poor, and certain ethnic) populations as well as
    senior citizens, disabled people, and people living in institutions.
    Its leadership in such areas has instilled awareness and responsiveness
    to these populations at the state and local levels and in the private
    sector.
        As demonstrated through the examples given above, the mission under
    which the agency has operated continues to be relevant because the
    country continues to change--demographically, economically, culturally,
    socially, aesthetically--and, using its national vantage point and
    federal authority, the Endowment is able to respond to the changes to
    ensure that American art flourishes and benefits the American public. A
    review of the mission in 1994 reaffirmed the dynamic application of its
    principles. The Endowment's mission is never finished; rather, it is
    woven into the fabric of American life.
                       fiscal year 1998 budget priorities
        Question. $136 million has been requested by the President for NEA
    activities in fiscal year 1998. However, it is doubtful that the
    Subcommittee will be able to provide the agency with an increase over
    their fiscal year 1997 budget. If this is the case, would you advocate
    that the appropriation of funds remain the same for the various budget
    lines of direct grants, state partnerships, and administration? Or do
    you see a need to allocate the resources differently and, if so, how
    and for what reasons?
        Answer. If the Senate Subcommittee is unable to provide the Arts
    Endowment with any increase for fiscal year 1998 over its fiscal year
    1997 budget, minor adjustments would be needed in the allocation of
    funds among direct grants, state partnerships, and administration.
        We would ask that the funds for the Policy, Research, and
    Technology office (OPRT), currently counted against the administrative
    account, be returned to the direct grants account. Funds expended by
    OPRT are solely for grants and/or cooperative agreements, primarily for
    the Endowment's research activities, not for its staff or other
    administrative costs. These research activities are authorized against
    the Endowment's programmatic budget, not its administrative budget, and
    until about 12 years ago were not counted as administration. However,
    in the mid-to-late 70's and 80's, the Endowment supported 6-12
    ``Regional Representatives,'' in different parts of the country, whose
    role was to serve as two-way communications links between their regions
    and the Endowment. The funds for these ``Reps'' were carried as part of
    the-then called Policy, Planning, and Research Office (now OPRT).
    Feeling that Regional Representative costs were closer to
    administrative (``quasi-staff'') than programmatic, the Congress in
    fiscal year 1985 moved that account to administration. But the Regional
    Representatives program ended in fiscal year 1992. Thus, the reason for
    OPRT's being counted against administration ceased to be, and its
    current activities are covered by a program, not administrative,
    portion of our legislation [Section 954(c)(10)]. We would ask,
    therefore, that these activities once again be considered part of our
    direct grants account.
        In addition, we would need a very modest amount to cover increases
    in uncontrollable costs (e.g., Congressionally-mandated pay increases,
    GSA-decided rent increases, GPO-decided printing increases). If there
    were no increase in the Endowment's total budget, there would need to
    be small decreases in its other accounts as necessary to balance the
    required increase in the administrative account.
                        arts and artifacts indemnity act
        Question. NEA administers the Arts and Artifacts Indemnity Act for
    the purpose of minimizing the costs of insuring international
    exhibitions. Eligibility under the program includes loans from abroad
    on exhibit in the U.S. and U.S. exhibitions travelling abroad.
    Eligibility was expanded recently to include domestic loans on exhibit
    here in the U.S. when they are part of an exhibition from abroad.
        Over the last few years, there has been some discussion of
    expanding the Arts and Artifacts Indemnity Act to include general
    coverage of domestic exhibitions. The Federal Council on the Arts and
    Humanities has been unanimously opposed to this suggestion. However,
    the President's Committee for the Arts and Humanities urges the
    exploration of legislation to adopt this expanded language. Can you
    provide the subcommittee with some insight as to the difference in
    viewpoints between the two groups?
        Answer. The authors of ``Creative America,'' the President's
    Committee on the Arts and Humanities report, did not solicit our view
    or discuss with the members of the Federal Council their recommendation
    to explore legislation for a domestic version of the Arts and Artifacts
    Indemnity Act prior to printing the report. First, we would have
    corrected the error in the report which states that a new domestic
    version of the legislation ``could also indemnify works of art and
    other artifacts from American museums for exhibition abroad.'' In fact,
    the current indemnity law permits this coverage.
        More importantly, we would have cited our previous study of this
    issue and our day-to-day experience with the Indemnity Program, which
    reveals that a domestic version of the Act is neither desirable nor
    necessary. One of the principal reasons that the Federal Council
    members are opposed to domestic indemnity is that the risks to the U.S.
    Treasury would increase dramatically if exhibitions consisting solely
    of U.S. loans were eligible for coverage. The number of eligible
    exhibitions would greatly increase, thus exposing the Treasury to
    significantly higher dollar amounts. And, the more exhibitions in
    circulation, the greater the chance for claims for loss or damage. When
    the Association of Art Museum Directors membership was polled on this
    matter in 1989, they reported more than 50 claims per year from an
    average of 579 domestic exhibitions insured privately. In the history
    of the U.S. Government's Indemnity Program, which is limited to
    coverage of international exhibitions, there have been only two (2)
    claims paid in 22 years. The total number of exhibitions indemnified
    since 1975 is 533.
        Implementation of a domestic indemnity program would require a much
    higher authorized ceiling than the present level of $3 billion. We
    estimate at least $6 billion would be necessary to accommodate domestic
    exhibitions. It would also be necessary to appropriate monies from
    which to pay claims. Currently, there is a set aside of $275,000 from
    which to pay certified claims if they do not exceed $100,000. To pay
    the increased numbers of claims for loss and damage which would occur
    if domestic exhibitions were indemnified, an appropriation of perhaps
    as much as $1,000,000 annually would be necessary. And, the
    administrative costs of staff and panel review would be considerably
    higher than the current annual expenditure of approximately $75,000. A
    possible benefit to the American public might be the opportunity to see
    more exhibitions of arts from American collections. However, the AAMD
    study showed that the costs of insuring such exhibitions privately is
    not prohibitive and is therefore not a deterrent to organizing
    exhibitions.
        While the Federal Council members believe that the adverse impact
    on the budget alone is sufficient cause to reject a domestic indemnity
    program, we would further question whether it is the proper role of the
    federal government to displace the private insurance companies which
    provide this coverage now to American museums.
        The Federal Council was pleased to amend the Indemnity Program
    Regulations in September 1995 to expand coverage to include U.S.-owned
    loans when they are part of international exhibitions. Applications
    have been received under three deadlines, and at the last, 5 out of 16
    applicants requested coverage for both foreign and U.S.-owned loans.
    The Council believes that this new provision is an acceptable increase
    in risk to the Treasury which provides additional assistance to
    American museums and thereby benefits the museum-going American public.
        Question. Last year, NEA provided an estimate to the subcommittee
    that it would require as many as 10 additional staff to operate an
    expanded indemnity program, where anticipated applications would be
    expected to number between 500 and 600. Currently one staff member has
    responsibility for processing 40-50 applications annually. Would it be
    correct to assume that even if you were given authority to operate a
    broader program, current budget restrictions on staffing would not make
    it feasible in practice?
        Answer. Yes, the estimate for the need of 10 additional staff to
    properly conduct an expanded indemnity program still holds. This
    additional staff would greatly add to the cost of the program.
                    the arts and rural communities agreement
        Question. The Art and Rural Communities Assistance Agreement is an
    interagency partnership between NEA and the Forest Service to support
    arts-based community development projects. What role does the Forest
    Service play in this partnership? What, if any, is their financial
    contribution? Does NEA operate the program or does the Forest Service?
    What have been the results of this program to date?
        Answer. The Endowment transferred $300,000 to the Forest Service
    for two rounds of awards under the Art in Rural Communities Assistance
    Initiative. The Forest Service provided an additional $300,000 in funds
    and administered the application and grant process. Both the Forest
    Service and the Arts Endowment publicized the Initiative, but
    applications were submitted to and the grants awarded by the Forest
    Service.
        In the first round, there were 19 grants awarded for projects in
    small, rural communities in 14 states; in the second round, there were
    17 grants awarded for projects in 15 states. The 36 grants in a total
    of 23 states went to local arts agencies, state arts agencies, heritage
    centers, tribes, performing arts organizations, museums, a school
    district, development organizations, and colleges.
        The grants were for a wide variety of projects including, for
    example:
      --Cooperative marketing of arts and crafts in New Mexico and Puerto
            Rico.
      --Apprenticeships in traditional arts in Puerto Rico, Arizona, and
            New Mexico. Heritage tour development in Washington and
            Tennessee; regional heritage area development in Ohio; African-
            American heritage tourism development in North Carolina;
            marketing the performing arts in Virginia's Shenandoah Valley.
      --Documentation of folk and traditional arts in Colorado, Nevada, and
            Montana.
      --Exhibitions relating the arts and natural resources in California,
            Hawaii, New Hampshire and West Virginia.
      --Festivals in Colorado, Idaho, Maine, New Hampshire and Utah.
      --Design plans for the restoration of an opera house in South
            Carolina.
      --A community theater residency in Kentucky.
      --An original play about the Nez Perce tribe.
                        office of enterprise development
        Question. NEA established this office as a means of exploring new
    methods for supporting the non-profit arts in America. It is charged
    with searching out ways to augment the agency's budget through
    authorized contributions and to expand the funding pool for the arts.
        How productive has this office been in the past year? What
    accomplishments can you point to? What pitfalls, if any, have you
    encountered? What conclusions can you draw from this office's successes
    or failures to date?
        Answer. The National Endowment for the Arts, as a grantmaking
    agency of the United States government, has never been recognized as a
    charity. The NEA has construed its mission as grantor rather than
    collector of funds. The Office of Enterprise Development has looked
    outside that context and attempted to assess the merits, feasibility
    and potential of various revenue generating activities. The OED does
    not define itself as a fundraising office for the NEA but rather as a
    hub for the agency's efforts to expand the overall funding pool for the
    arts. Consistent with that purpose, the OED has adhered to a commitment
    not to engage in activities which would divert funds that would
    otherwise go directly to artists or arts organizations. While there
    have been some notable accomplishments in the form of direct
    contributions to the agency (the H. J. Heinz Company gave $450,000, the
    largest corporate contribution to the NEA to date; a gift of stock
    valued at $95,000 from a private citizen marked the largest individual
    donation in the agency's history), the productivity of the office can
    not be measured in dollars brought in to the agency itself.
        The most consistent success has been in finding partners for agency
    supported projects. Corporate partners such as the Coca-Cola Company,
    Chase Manhattan, Nissan Motors, Atlantic Ridgefield, Dunwoodie
    Communications and others have contributed to the support of specific
    projects like American Canvas, the WritersCorps Project and the
    Oklahoma Rebuild Project. Very recently, Microsoft committed $250,000
    to the Benton Foundation, the Endowment's partner in the NEA conceived
    and initiated internet access project ``Open Studio.''
        The nature of the Endowment itself dictates certain parameters for
    the Office of Enterprise Development. First, the NEA is a federal
    agency and, in many instances, individuals, corporations and
    foundations will not, or can not by charter, give money to the
    government. They consider that their taxes already serve that purpose.
    Second, the agency is recognized as a grant making body. It would
    require a massive public relations campaign to shift that perception
    and spotlight the NEA as a recipient organization. Even if the
    Endowment had the authority to solicit and invest, such a shift would
    demand a major reassignment of both staff and financial resources to
    accommodate an ongoing capital campaign. Third, unlike the Smithsonian
    or the Library of Congress, the NEA does not own or generate product.
    The only thing approximating product which the NEA has is its
    reputation and brand recognition. Government ethics preclude the agency
    from using its name and logo, arguably its only marketable commodity,
    to enter into cause-related marketing ventures. The OED has found
    opportunities to enter into entrepreneurial fundraising activities such
    as affinity cards and product identification schemes but has been
    unable to pursue them because of these restrictions.
                             millennium initiative
        Question. In a recently issued report entitled Creative America,
    the President's Committee on the Arts and the Humanities calls for a
    Millennium Initiative in which both Endowments, as well as other
    agencies, are urged to participate.
        Please describe this initiative's purpose in greater detail for the
    subcommittee. Does NEA have plans to follow this recommendation that
    you can share with the subcommittee now? Are there any collaborative
    efforts with other agencies planned, as the report encouraged?
        Answer. Under the leadership of Chairman Jane Alexander, the Arts
    Endowment has for some time encouraged applicant organizations to
    propose projects that celebrate the Millennium. During the summer of
    1996, the Endowment announced that support was available for a limited
    number of artistically excellent, high-visibility projects that
    celebrate and showcase artistic achievements of the past century and
    that encourage innovative thinking about the future of the arts as we
    enter the 21st century. Eligible applications were reviewed by an
    advisory panel that included such individuals as radio personality
    Garrison Keillor; retired Montana Congressman Pat Williams; and Eugenia
    Zuckerman, internationally acclaimed flutist and regular commentator on
    CBS: Sunday Morning. Nineteen projects ultimately were approved for
    funding, including the commissioning of new dances by the American
    Dance Festival of Durham, NC; American Music Theater Festival's 100
    Years of American Musical Theater: Past Legacy and Future Visions in
    Philadelphia, PA; and a nationwide effort by Chamber Music America that
    will present more than one hundred jazz, chamber, and new music groups
    through a project called American Ensembles: A Musical Celebration of
    the Millennium.
        The Endowment takes seriously President Clinton's challenge in his
    most recent State of the Union Address that ``all Americans in the arts
    and humanities * * * join with their fellow citizens to make the year
    2000 a national celebration of the American spirit in every community,
    a celebration of our common culture in the century that is past and in
    the new one to come.'' The problem is a lack of appropriate levels of
    funding. As plans are underway for continued support for millennium
    projects, many alternatives are being discussed, including developing a
    more targeted, proactive approach. Consideration also is being given to
    supporting a few stellar projects that would provide opportunities for
    artists and audiences across the country. Any of these activities would
    be undertaken concurrently with the partnership activities that the
    Endowment develops with other federal agencies, as well as state and
    local arts agencies.
        Question. What portion of your budget will be committed to this
    initiative? How will support for the millennium project impact your
    core programs when it is not anticipated that a corresponding increase
    can be provided in future budgets?
        Answer. Approximately $4.8 million of fiscal year 1997 funds will
    be supporting more than 20 leadership projects for the millennium, in
    response to nearly 300 initial letters of intent totalling $66.8
    million. Contingent on appropriations, the Endowment will commit $4-
    $4.5 million to these types of special leadership projects again in
    fiscal year 1998. In addition, many of the agency's other direct grants
    reflect a growing focus on celebrating the Millennium.
                                american canvas
        Question. This effort was organized by NEA to bring together local
    and national leaders in the arts, education, business, government,
    civic and consumer organizations, religious groups, and foundations to
    determine how to build a solid infrastructure for the nonprofit arts in
    America's communities. Both local and national representatives from
    these sectors had the opportunity to participate in this program
    through a series of six community forums and a national meeting.
        An Action Plan that would analyze the information gathered at these
    meetings, identify what works and recommend strategies is due out in
    the spring. At this time, can you summarize its findings for this
    subcommittee?
        Answer. During 1996, the National Endowment for the Arts convened a
    nationwide initiative of regional and community forums called American
    Canvas. These forums brought together more than 150 national leaders as
    panel participants representing the arts, education, business,
    government, consumer organizations, civic groups, religious
    organizations, and foundations to determine the value of the arts in
    communities and how to build a solid infrastructure for the arts in
    America's communities. Each of the six privately funded forums explored
    a different aspect of the successful integration of the arts into
    communities. The hosting communities were chosen for their leadership
    in the development of innovative strategies for supporting the arts.
        As a result of the dialogue that took place at the various sites, a
    national steering committee formulated ten ``Calls to Action,'' one
    relating to each of the six forum topics and four which emerged as
    general concerns in all six forums. In January 1997, a committee of 100
    leaders representing a variety of sectors reviewed the Calls to Action
    and discussed specific ways in which their organizations and sectors
    could work together nationwide to assist communities in ensuring an
    arts legacy for future generations. All of the above-mentioned
    activities will be discussed and combined to create the American Canvas
    report which will be published in the Fall of 1997.
        American Canvas participants identified a number of revenue sources
    for the arts across the country, many of which may be suitable for
    replication elsewhere. Just as traditional percent-for-art programs (in
    which a small portion of federal, state, or local construction expenses
    are earmarked for the incorporation of artworks and other cultural
    amenities) have brought millions of dollars to the arts, other
    dedicated revenue streams are being developed, often tapping
    ``nonarts'' funds in the public sector to fund cultural activities.
    These include from hotel/motel taxes and entertainment/recreation
    taxes; revenues from lotteries and gambling taxes; vanity license plate
    sales; and sales taxes (where a percentage of the sales tax is
    dedicated to the arts).
        Additionally, American Canvas participants identified cultural
    tourism as an important way in which cities attract visitors and are
    thus devoting a portion of their convention and visitors funds to
    cultural activities. Cities have also used cultural facilities as
    community revitalization tools and are able to secure economic
    development, housing, and transportation funding to support these
    activities.
        These and other federal programs, such as the funding for arts in
    rural areas through the Forest Service and the Department of
    Agriculture and funding for job training in the arts through the
    Department of Labor, along with many private sector programs, were all
    ways which the American Canvas participants believed helped strengthen
    a community's infrastructure around its nonprofit arts. These ideas,
    and others, as well as strategies for their implementation will be the
    focus of the American Canvas report.
                                cultural tourism
        Question. Another interagency initiative is a partnership of the
    NEA, NEH, the Institute of Museum Services, and the President's
    Committee on the Arts and the Humanities, with the support of six
    national museum, humanities, arts, and historic preservation
    organizations. Its purpose is to encourage cultural organizations and
    the commercial travel and tourism industry to develop cultural tourism
    projects.
        How much has NEA contributed to this partnership? How does cultural
    tourism differ from tourism as we traditionally know it? Is the travel
    industry contributing resources to this effort? What about state and
    local governments? Chambers of Commerce? What makes this an area that
    merits special emphasis? Are there specific results from this
    initiative that you can point to at this time?
        Answer. Cultural tourism--``travel directed toward experiencing the
    arts, heritage, and special character of a place''--differs from the
    mass tourism market in its focus on cultural experiences as part of
    tourism. The travel and tourism industry in the United States has
    traditionally marketed natural resources (beaches, mountains, lakes),
    recreation (golf, skiing, fishing) and attractions (theme parks,
    casinos) whereas European nations have aggressively marketed their
    history and their arts as travel motivators. Given the Endowment's
    reduced budget level, encouraging the development of cultural tourism
    is an important way for the agency to help cultural organizations
    increase their earned income and demonstrate their importance in local
    and state economies.
        The National Endowment for the Arts contributed $50,000 to the
    Cultural Tourism Leadership Initiative. The National Endowment for the
    Humanities contributed $50,000 and the Institute of Museum and Library
    Services contributed $5,000. Through the President's Committee on the
    Arts and the Humanities, the American Express Foundation became the
    major travel and tourism industry contributor, donating a total of
    $35,000. Other travel and tourism industry organizations including
    state tourism offices, convention and visitor bureaus, travel
    magazines, airlines, and hotels, provided support.
        The American Association of Museums (AAM), the Federal agencies'
    cooperator, organized ``Partners in Tourism,'' composed of the Federal
    partners and eight national cultural organizations: the AAM, the
    National Assembly of State Arts Agencies, the Federation of State
    Humanities Councils, Americans for the Arts (formerly the National
    Assembly of Local Arts Agencies and the American Council for the Arts),
    the National Conference of State Historic Preservation Officers, the
    National Trust for Historic Preservation, the National Association for
    African American Heritage Preservation and the National Center for
    Heritage Development.
        The Cultural Tourism Leadership Initiative sponsored a series of
    regional forums: Mid-Atlantic (Annapolis, Maryland); Mid-Western
    (Indianapolis, Indiana); Southeastern (Chapel Hill, North Carolina);
    Far Western (Los Angeles, California); and Rocky Mountain and Plains
    States (Denver, Colorado). In New England, cultural organizations
    sponsored a half-day session on cultural tourism at a meeting of
    Discover New England, the region's tourism promotion organization.
        The Forums attracted more than 900 participants representing a wide
    variety of both travel and tourism industry (e.g., state travel
    offices, convention and visitor bureaus, hotels, tour operators) and
    cultural interests (e.g., state arts agencies, state humanities
    councils, local arts agencies, state historic preservation officers,
    heritage area coordinators).
        The focus of the Forums was the development of state action plans.
    Most states decided to form committees back home to expand and
    implement the plans. At least two states have held statewide cultural
    tourism conferences based on the Forum model; several states indicated
    their intention to pursue state funding for cultural tourism
    initiatives.
        As the last Forum was held in May, the Federal agencies involved
    are currently reviewing the Forum results to determine what further
    steps should be taken at the national level.
                             leadership initiatives
        Question. Beginning in fiscal year 1996, funds were set aside to
    support Leadership Initiatives. Last year, you were in the process of
    developing a structure for identifying and evaluating possible
    leadership initiatives and it was anticipated that information would be
    distributed in the months ahead.
        Can you share that information with the subcommittee now? What
    defines a leadership initiative grant and how does it differ from
    grants awarded through your other program categories? Are grants
    selected through the normal channels or is there a separate process of
    selection?
        Answer. Leadership Initiatives, in addition to the Millennium
    Initiatives discussed earlier, are awarded through grants or through
    cooperative agreements, and are undertaken in response to an identified
    need in the field, or to take advantage of a particular opportunity
    where the Endowment's catalytic national role can make a difference.
    All awards, whether grants or cooperative agreements, are subject to
    review and recommendation by the National Council on the Arts with
    ultimate approval by the Endowment's Chairman.
        Question. To date, what has been accomplished with this initiative?
    Have the first grants been awarded?
        Answer. Several Leadership Initiatives have yielded rich returns in
    terms of benefits to the arts and to citizens in communities across the
    United States. The Mayors' Institute on City Design, for example,
    brings together mayors and design professionals to improve the way
    cities solve their problems. Over two days of intensive discussions,
    the group works to analyze a number of design issues currently pending
    in the mayors' own cities. Recent participants included the mayors of
    Salt Lake City, UT; Tacoma, WA; Macon, GA; Charlotte, NC; Akron, OH;
    Shreveport, LA; and Lewiston, ME.
        A unique opportunity presented itself last year for the Endowment
    to help make possible the national expansion of The Writer's Voice, an
    extremely successful project of the YMCA in New York City. Endowment
    support will help to establish at least 25 new centers across the
    country over three years through a national arts training initiative
    that will provide YMCA staff with training workshops and publications
    to help them start centers at their local Y's. Writer's Voice centers
    make the literary arts more accessible to people of all ages, with a
    special focus on youth between the ages of 3 and 18.
        An innovative pairing of jazz and sports was the focus of another
    Leadership Initiative grant. The Thelonious Monk Institute of Jazz in
    Washington, DC, was awarded a grant to support the artistic development
    of young jazz students. The Monk Institute, the Endowment, the Los
    Angeles Lakers, Nissan Motor Corporation USA, and the National
    Association of Music Merchants have entered into a partnership that
    will provide after school and Saturday instrument training, master
    classes, mini-concerts, and other performance opportunities to aspiring
    musicians at two South Central Los Angeles high schools. Recently, jazz
    bands from the two schools began performing prior to Lakers home games
    with renowned jazz artists sitting in. The project has enormous
    potential as a national model, demonstrating how schools, corporations,
    and professional sports teams can utilize their respective strengths in
    developing young people into serious musicians.
                                  nea web site
        Question. NEA Launched its Web Page on the Internet last spring.
    What sort of feed back have you gotten to date? Can you assess the web
    site's value to date in promoting NEA programs and providing greater
    public access?
        Answer. Internet traffic to the Endowment Website has more than
    tripled during the past year, with nearly 3 million hits to date, and a
    clear trend-line toward increased usage. Over 130,000 of the hits on
    our Website have come from other countries. The average visitor to the
    site spends 15 minutes viewing the information provided. More than a
    thousand prospective grant applicants have downloaded Endowment funding
    guidelines and application forms. Hundreds of other agencies and arts
    organizations have linked to our site, and Endowment staff have
    communicated through the Website with many US citizens living abroad.
    Positive press coverage has come from USA Today and several major daily
    newspapers throughout the country.
        It is too early to assess the value of the Website in specific
    dollar terms, but the increasing usage of the site, and the length of
    time spent by each visitor are very encouraging. Certainly the Website
    has saved valuable staff resources in permitting NEA staff to respond
    to requests for information electronically and allowing the public to
    access information over the Internet. In conjunction with Open Studio,
    an national internet access and training partnership with the Benton
    Foundation, the Website is clearly expanding access to information
    about the arts for the American public.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd

                                 budget request
        Question. The fiscal year 1998 budget request is almost 37 percent
    above the fiscal year 1997 allocation. Given the current budgetary
    climate, and given the uncertain reauthorization status of the NEA, how
    did the Administration determine that $136 million was an appropriate
    funding level for the NEA?
        Answer. The request for $136 million, if realized, would still
    leave the Arts Endowment at a level 16 percent below our fiscal year
    1995 appropriation of $162.3 million. The $136 request is seen as
    partial restoration of funds that the Administration believes
    represents a modest but vital investment in our Nation's cultural
    heritage and its citizens' access to their rich and diverse artistic
    legacy.
        Question. What does the 37 percent increase buy for the American
    people?
        Answer. The 37 percent increase buys for the American people
    increased opportunities to experience and participate in the arts, a
    richer and more diverse choice of artistic works and traditions,
    education in the arts for children and people of all ages, and an
    endorsement of our citizens' belief that the arts should be nourished
    and shared with all people.
        Question. What would be your programmatic priorities at the
    increased funding level?
        Answer. Programmatic priorities were established as part of the
    agency's drastic downsizing and restructuring; they are reflected in
    our fiscal year 1998 budget request--direct grants for the four
    categories and leadership initiatives, and partnership agreements with
    the state arts agencies and their regional organizations. These would
    remain our priorities at the increased funding level.
        Question. Would your priorities remain the same if funding were to
    be decreased?
        Answer. In general, the agency's priorities are, as noted above,
    reflected in our fiscal year 1998 budget request. It is difficult to
    speculate with any surety on what our priorities would be ``if funding
    were to be decreased,'' as the response would probably hinge at least
    partly on the nature and extent of any additional decrease, remembering
    that the agency has already sustained a massive decrease and totally
    reorganized the way it does business.
        Question. How does your annual budget request reflect your arts
    education priority?
        Answer. Our annual budget request reflects our arts education
    priority in each of our budget components: Direct grants include our
    Education & Access category, specific to education, and funds in each
    of the other three categories (Heritage & Preservation, Creation &
    Presentation, and Planning & Stabilization) are also being used, in
    many of the grants, for projects having educational components. The
    Direct grants area also encompasses our Leadership Initiatives, several
    of which reflect educational aims and priorities. The State
    Partnerships, in addition, includes a priority for arts education
    programs conducted and supported in all of the states throughout the
    country.
        Question. Describe the impact on arts education for children which
    would occur if the agency were not reauthorized.
        Answer. The impact on arts education for children would be
    substantial if no funds were appropriated for the agency. If the agency
    were eliminated due to lack of funds, all of the direct grants and
    partnership agreement funds for arts education projects and programs
    would be gone, as would the Endowment's vital leadership role in
    working to establish the arts as part of the basic curriculum in
    America's schools. We believe that many of the arts education programs
    now being carried out by the state arts agencies, and by arts
    organizations such as museums, orchestras, and opera companies, would
    be reduced or eliminated, negatively affecting hundreds of thousands of
    our children. Though the Arts Endowment's funds are modest and
    represent only a portion of most program's total costs, they are
    crucial in establishing a priority for arts education and drawing
    together a complex network of partners from both public and private
    sectors. With so much concern evident about our children's education,
    it would be ironic indeed--and tragic, we believe--if this vital
    endeavor, built so painstakingly over the years, were to be dismantled.
        Question. Please describe any long term investments or new
    initiatives that are currently being developed. What effect would new
    initiatives have on existing grantees if funding is not increased?
        Answer. We view virtually all of our funding as long term
    investments. The artistic life and legacy of a Nation is a vast and
    vital reflection of its roots, its present, and, often, its future.
    Arts endeavors--be they the creation of a new symphony or painting, the
    teaching of art to young children, the broadcast of ballet on
    television, the publishing of poetry or fiction--are investments whose
    results may be seen immediately or years hence. As a complement to
    these investments, new initiatives are vital to the lifeblood of any
    funder in the arts, as the arts themselves constantly reinvent and
    reshape themselves, and as our nation continually changes
    demographically, ethnically, educationally, and economically.
        These two interrelated facts and philosophies are the underpinning
    of our new structure, which includes ongoing categories of project
    support to organizations and agencies, as well as leadership
    initiatives that enable the Endowment to effect specific, targeted
    outcomes. The new structure was created with both elements firmly in
    place so that they would complement each other and not impact
    negatively on existing grantees. Negative impact on existing grantees
    would be attributable not to new initiatives but rather to our
    drastically reduced budget.
                 government performance and results act (gpra)
        Question. Please describe your progress and milestone toward
    preparing a strategic plan, including consultation with interested
    parties.
        Answer. The agency's strategic plan is moving forward, guided by an
    agency-wide staff planning group and a committee of the National
    Council on the Arts. We are beginning our review with the Office of
    Management and Budget and are discussing preliminary thinking with some
    of our advisory panels--private citizens from around the country--as
    well.
        Question. Given the current budgetary climate, and given the
    uncertain reauthorization status of the NEA, how are you addressing
    funding and authorization issues in the development of GPRA goals and
    the strategic plan?
        Answer. Development of the strategic plan, required by law to cover
    five years, is particularly challenging for an agency whose future
    currently appears to be as cloudy as ours. We are having to set these
    issues somewhat to the side for now, and are trying to focus on the
    fact that a five-year strategic plan is required, regardless of our
    status, unless the Congress eliminates the agency. Development of a
    five-year plan involves a very great deal of staff effort and time; the
    level of frustration is fueled by the prospect of our five-year plan
    being ``due'' before even our one-year future is known.
        Question. What are the grant-making priorities for the agency in
    the next year, for the next 5 years?
        Answer. Contingent, of course, on our continuing existence, and an
    appropriation not slashed yet again nor encumbered by additional
    earmarking, the grant-making priorities for the agency for the next
    five years are basically those reflected in our fiscal year 1998 budget
    request. We do not foresee, at present, major shifts or changes.
        Question. What are the organizational priorities for the agency for
    the next year, for the next 5 years?
        Answer. Our organizational priorities for the agency for the next
    five years are to continue to do everything within our power and
    available resources to serve the American people by carrying forward
    our programmatic goals.
                                  grant-making
        Question. Within the request, direct program grants increase by 51
    percent over fiscal year 1997. How do you propose to allocate the
    requested increase among the different grant categories established by
    the NEA?
        Answer. The Arts Endowment has not allocated the requested increase
    for fiscal year 1998 among the four grant categories and leadership
    initiatives. If the increase were to be appropriated, the Endowment
    would apply the increase against the four interdisciplinary categories
    as warranted by the numbers and quality of the applications, and
    against leadership initiatives as well, with an emphasis on millennium
    projects. Increased funds would also be available to the state arts
    agencies through the State and Regional and Underserved Set-Aside
    accounts.
        Question. Although there is a request for 24 percent more funds in
    the Underserved Set-Aside allocation, the Underserved Set-Aside request
    is a smaller percentage of the total budget request in fiscal year 1998
    than that allocated in fiscal year 1997. Are the needs of the
    underserved community decreasing such that less emphasis is being
    placed on that portion of the NEA funding?
        Answer. No, the needs among artistically underserved communities
    are not decreasing. Two points need to be kept in mind in responding to
    this question:
      --Underserved communities are served not only by the Underserved Set-
            Aside (grants to state arts agencies for underserved
            communities) but also by projects funded under the Direct
            grants (including leadership) categories as well.
      --The authorizing legislation as amended in November 1990,
            established a percent-of-funds formula to be set aside
            beginning in fiscal year 1992 for state arts agencies'
            underserved programs. The amount reflected in our request is in
            accordance with that percent.
        A few examples of underserved projects funded this year under our
    direct grants appropriation:
      --A grant to Grass Roots Art and Community Efforts in Hardwick,
            Vermont, to support publication of 20 years of G.R.A.C.E.--An
            Inside View, a collection of work and biographies of self-
            taught artists in northern rural Vermont.
      --A grant to the Hiddenite Center in Hiddenite, North Carolina to
            present touring artists in rural, ethnically diverse and other
            underserved populations in communities in Alabama, Florida,
            Georgia, Kentucky, Louisiana, Mississippi, North Carolina,
            South Carolina, and Tennessee.
      --A grant to the Lakota Fund in Kyle, South Dakota, to support the
            production of Oyate Ta Olowan (Songs of the People), a series
            of half-hour radio programs featuring traditional Native
            American music.
      --A grant to Music at Angel Fire, Inc., in Angel Fire, New Mexico, to
            support performances in Angel Fire, Raton, Taos, and Las Vegas,
            New Mexico, as well as youth concerts in Taos and Colfax
            Counties.
      --A grant to the Network for Local Arts in Washington State in
            Olympia, Washington, to support the Rural Touring Arts
            Initiative that will develop two on-going rural touring
            circuits, one in southeastern Washington and the Olympic
            Peninsula, and the other--the applicant's stated priority--for
            local communities in central-northwestern Washington.
      --A grant to Appalshop, Inc. on behalf of the American Festival
            Project in Whitesburg, Kentucky, for its Community Capacity
            Building Initiative which engages people who have had little
            access to the arts in community arts collaborations.
      --A grant to Atlatl in Phoenix, Arizona, to support the Native Arts
            Network Associates consortium and strengthen the development of
            Native American arts.
      --A grant to Davis & Elkins College in Elkins, West Virginia, to
            support the statewide West Virginia Folk Arts Apprenticeship
            Program.
      --A grant to El Teatro Campesino in San Juan Bautista, California, to
            support the presentation of ``La Pastorela,'' a religious drama
            and Christmas tradition involving members of the community.
      --A grant to the Vigilante Players, Inc. in Bozeman, Montana, to
            support touring to small communities in six rural Northwest
            states.
      --A grant to the Clay Studio in Philadelphia, Pennsylvania, to
            circulate the ``Claymobile,'' a traveling ceramics class in a
            van, to inner-city and low-income communities.
        In addition, a number of the Arts Endowment's direct grants or
    cooperative agreements for leadership initiatives directly reach
    underserved communities; for example:
      --Funds to Chamber Music America in New York have brought chamber
            music and jazz ensembles to live, teach, and perform in rural
            areas including in the Arkansas communities of Blytheville and
            Osceloa; King City, CA; the Georgia communities of Fitzgerald,
            Tifton, and Moultrie; the Iowa communities of Jesup, Fayette,
            and Decorah; the Kansas communities of Dodge City, Garden City,
            and Liberal; the Kentucky communities of Bowling Green,
            Prestonburg, Paintersville, and Salyerville; South Bristol, ME;
            Roseburg, OR; the Pennsylvania communities of Somerset,
            Indiana, and Johnson; and Big Sandy, TX.
      --Funds from a joint program of the Arts Endowment and the U.S.
            Forest Service to the Augusta Heritage Center in Elkins, West
            Virginia are supporting public programs with demonstrations of
            the work of traditional crafts people; the programs will be
            accompanied by apprenticeships, the Forest Festival, and a
            Fiddlers' Reunion.
      --Funds from the same initiative (NEA/Forest Service) to the Homer
            Council on the Arts/Pratt Museum in Homer, Alaska to support
            ``Exploring our Place from Forest to Sea,'' a series of events
            including summer story telling, outdoor sculpture, and
            performances; a fall ``Gathering of Native Tradition'' on
            nature arts; a winter program on Eskimo songs, dances and masks
            which will travel to nearby communities; and a spring
            exhibition on the ``Tongass: Alaska's Magnificent Rainforest.''
        Question. For fiscal year 1998, what are the approximate targets
    for the allocation of funds to the 4 funding categories and Leadership
    Initiatives?
        Answer. We have not yet established targets for the allocation of
    the 4 funding categories and Leadership Initiatives for fiscal year
    1998, as the uncertainties about our future at the very least raise
    questions about the level of funds that might be available for these
    purposes. Nonetheless, it appears that the proportion of applications
    just received for fiscal year 1998 funds is similar to last year's
    among the 4 categories, which is one guidepost for us, and, as advisory
    panels meet throughout this summer and fall, we will have a good idea
    of their quality and viability. Leadership Initiatives will probably
    receive an allocation similar to last year's, again contingent on
    appropriations.
        Question. When grant monies are used to establish or maintain
    endowments, how much of the federal funds are permitted to be used for
    administrative costs of operating the endowment?
        Answer. Federal and matching funds must be placed in the endowment
    corpus. These funds may not be used for administrative costs of
    operating the endowment.
        Question. What kind of technical assistance does the Endowment
    provide to arts institutions in the area of business planning and
    grant-application preparation?
        Answer. The drastic budget reduction of fiscal year 1997 forced the
    Endowment to discontinue one of its most valuable programs, the
    Advancement Program. Participants in Advancement were the beneficiaries
    of year-long one-on-one consultancies with experts in all areas of
    business and the arts, from board development, to fundraising, to
    investing. At the end of the consultancy, the organizations submitted a
    strategic plan that was evaluated before grant monies were awarded.
    Advancement grants were matched on a three-to-one basis with non-
    federal funds. The Endowment currently has no ability to provide that
    type of service to its constituents.
        Applicants to the Planning & Stabilization category are subject to
    management assessments by outside contractors who provide information
    to help evaluate applications. The applicants are provided with the
    assessments at the end of the application review period. Planning &
    Stabilization grants are intended to strengthen organizations' ability
    to realize their artistic and public service goals. Planning offers
    assistance to organizations to assess carefully their strengths,
    weaknesses, and financial health. Stabilization helps organizations
    strengthen their own institutional capacity; adapt to the realities of
    their potential audiences and communities by determining and realizing
    an appropriate size; maximize and diversify their resources; or enhance
    their abilities to serve or strengthen their arts field.
        Endowment staff in the various artistic disciplines are well versed
    in the agency's guidelines, and spend many hours assisting applicants
    on the telephone and in personal meetings. In addition, Endowment
    representatives often hold sessions at the meetings of arts service
    organizations, college and university development officers, and other
    pertinent conferences in order to introduce prospective applicants to
    the agency, help them determine their eligibility, and select the
    appropriate category to which an application might be submitted.
        Question. What role does receipt of an NEA grant play in
    influencing private support of arts organizations?
        Answer. Grants to organizations from the National Endowment for the
    Arts require recipients to match their awards 1:1 or 3:1, depending
    upon the program, thus helping to leverage private funding for the
    arts. The credibility of the Endowment as the national identifier of
    artistic excellence and merit has proven to be an important tool for
    grantees, since most indicate that they raise private money well beyond
    the required match.
        Additionally, it is important not to overlook the ``big picture''
    influence of federal funding for the arts, which not only affects the
    private sector but state and local government arts funding as well. The
    most recent statistics from the AAFRC Trust for Philanthropy printed in
    their Giving USA 1996 report indicate a strong upward trend in private
    giving to the arts, culture and humanities from 1965 to 1992, but a
    downward trend from 1992 to 1995. Private giving to the arts, culture,
    and humanities sector (which includes giving to institutions such as
    science and history museums, public television, and other cultural
    institutions as well as performing and visual arts institutions)
    increased from $2.31 billion to $10.23 billion from 1965 to 1992, after
    adjustment for inflation; however, between 1992 and 1995, private
    giving fell to $9.96 billion. Furthermore, arts and cultural giving
    declined to only 6.9 percent of total charitable giving in 1995
    compared to 7.6 percent in 1992. Federal dollars to the arts,
    specifically from the National Endowment for the Arts, also rose
    steadily over the same time period and peaked in 1992 at $175.9
    million.
        After 1992, the agency's budget declined yearly to reach $162.3
    million in 1995. In sum, the most recent four-year downward trend in
    private giving to the arts (1992 to 1995) coincides with a four-year
    downward trend in federal support for the arts, suggesting that
    declines in federal funding are having a negative impact on private
    giving to the arts. In contrast, over the previous two and one-half
    decades, rising federal funds coincided with increased private giving
    to the arts.
        State government contributions rose steadily between 1965 and 1990,
    as did funding at the federal level. The increased federal/state
    partnership also resulted in state arts agencies supporting the
    development of local arts agencies throughout their states. The
    aggregate budgets for state arts agencies peaked at $292.3 million in
    1990, dropped for three consecutive years and, in 1994, began to rise
    again and reached $262.2 million in 1996. After adjustment for
    inflation, aggregate state arts agency budgets have dropped by 25
    percent since 1990. Over this same time period, the National Endowment
    for the Arts budget dropped by 52 percent, after adjustment for
    inflation.
        While the estimates of local government funding for the arts cannot
    be calculated as easily or as accurately as state and national data,
    Americans for the Arts estimates local government funding for the arts
    at $600 million in 1992, $650 million in 1995, and $675 million is
    estimated for 1997. This growth in aggregate local support was not
    sufficient to keep pace with inflation over the time period, but more
    importantly was a dramatic change from the large increases posted from
    1983 to 1992, when the total contributions doubled--from $300 million
    to $600 million. (1983 is the first year that data are available on
    local government support.)
        Question. The Endowment is about to conclude its first year of
    grant-making in the grant funding categories established during 1996.
    Describe the manner in which the new categories meet the needs of the
    Endowment, the applicants, the grantees.
        Answer. When the Endowment received the devastating budget cut of
    fiscal year 1996, it was impossible to maintain the specialized
    categories of support that had existed for years. There was neither the
    money nor the staff to do so. The four broad categories were instituted
    as a realistic means of supporting all of the relevant activities of
    organizations involved in the arts under broad umbrellas. It was--and
    is--our belief that the categories provide opportunities for all
    aspects of the arts to be supported at the federal level.
        Much has changed for applicants to the four categories. Applicants
    now may submit only one application per funding cycle, necessitating a
    difficult choice for many of them. If they are entering into an
    endowment drive, for example, should they risk creative programming to
    apply for a Planning & Stabilization grant in this round? There also is
    the choice of which project to select for an application, as all
    support is now project-specific and no longer seasonal in nature. The
    Endowment staff has helped applicants through these questions as much
    as possible, and continues to provide outstanding service to the field.
        Many applications had to be rejected even though they were of a
    quality that would have been supported were more funding available.
    Projects that were supported, however, received substantial amounts in
    many cases. The Endowment has rewarded the best applicants with large
    percentages of their requests, providing significant support to the
    best projects in the country.
        Question. What changes do you anticipate making in the grant
    guidelines before the next round of funding?
        Answer. The primary guidelines, for Grants to Organizations, were
    modified between fiscal year 1997 and 98 to clarify matters that seemed
    in need of attention following the first round of applications (for
    fiscal year 1997). Very few substantive changes were made. The fiscal
    year 1998 guidelines were distributed to the field in December 1996 for
    application deadlines in April 1997. We are currently reviewing those
    guidelines again, for fiscal year 1999, seeking continually to
    streamline and clarify.
        The Arts Endowment's other guidelines, such as those for Literature
    Fellowships, American Jazz Masters, Heritage Fellowships in the Folk
    and Traditional Arts, and Partnership Agreements for State Arts
    Agencies and Regional Arts Organizations, are also reviewed annually
    and modified as warranted. Only the last of these guidelines, for
    Partnership Agreements, represented much change in fiscal year 1997,
    due to the streamlining and consolidation of several grant programs
    into single Partnership Agreements. We anticipate no major changes in
    the coming year.
        Question. Will streamlining your grant review process from a four-
    step process to the use of a single-level advisory panel process allow
    any savings in staff time necessary to review the applications?
        Answer. The same level of staff review is required for all
    applications submitted to the Endowment, regardless of the levels of
    review. Staff check the application for completeness, adherence to
    appropriate deadlines and guidelines, and eligibility. They then
    prepare the applications for review by panels. Doing away with the
    combined arts panel level of review will save staff time, however, in
    that there will be fewer panel meetings.
        Question. How does the single-level advisory panel reduce the four-
    step process?
        Answer. There were four levels of review in the last funding cycle:
    a discipline specific review (e.g. dance, theater, opera, etc.); a
    combined arts panel made up of representatives from many disciplines
    plus generalists and lay persons; the National Council on the Arts; and
    the Chairman of the National Endowment for the Arts.
        The current round combines the first two levels into one panel
    review. While panels are now grounded in specific disciplines or
    fields, they have been broadened to include generalists and other
    individuals who represent allied fields that could bring valuable
    contributions to the review of arts applications. Every panel also
    includes at least one knowledgeable lay person. Post panel evaluation
    is still done by the National Council, which has the authority to
    recommend applications for funding or to reject them. Final decisions
    on all grants to be awarded rest with the Endowment's Chairman.
        Question. When is the single-level advisory panel system
    anticipated to be in place for use in the review of applications?
        Answer. Panel meetings began on June 19 and will continue
    throughout the year. Periodic meetings of the National Council review
    the work of the panels.
        Question. Are advisory panels considered to be peer review, or are
    the panels composed of NEA staff members?
        Answer. Panels are not composed of NEA staff members. As described
    above, they are composed or experts in the various arts disciplines and
    fields, generalists and individuals from professions outside of but
    connected to the arts, and lay persons.
                                 reorganization
        Question. How has the 1996 reorganization affected the daily
    operations of the NEA?
        Answer. The 1996 reorganization had a substantial impact on the
    daily operations of the NEA. Following the month-long period of
    government shut-downs and snow closings, coupled with the loss of 89
    employees and major reduction and total overhauling of office space,
    the staff needed to adjust to new working surroundings, a new way of
    handling applications (in the 4 new categories), and, for some of them,
    new jobs resulting from RIF-caused shifts. Additionally, there was a
    four-level review process for applications, one of which, the Combined
    Arts Panels, was also new. Nearly all of the agency's systems and
    procedures needed to be revised; and there was a confused and concerned
    constituency needing assistance. An agency-wide assessment, and
    recommended retooling, of our information management and computer
    systems was in its early stages; and there were numerous inquiries from
    the Congress, the media, and the public.
        The Endowment's staff's hard work, intelligence, creativity,
    resilience and dedication throughout 1996 and up to the present have
    been models of the best of public service.
        Question. What lessons have you learned from the reorganization?
        Answer. We have learned from the reorganization that
    notwithstanding the suddenness and extent of the cuts, both in funds
    and in staff, the agency's resilience and commitment resulted in
    continued responsible and responsive service to the fields and the
    American people. We learned as well that our revised structure and
    guidelines, though a major change for our fields, brought forward many
    outstanding proposals, new partnerships, and newcomers to our applicant
    pool. We learned that our reduced level of funding and staff creates
    serious limitations in our ability to respond to the fields and the
    public compared with prior years, as evidenced by the many worthy
    proposals we are now unable to support.
        Question. Do you have further plans to fine-tune the NEA in terms
    of organizational structure?
        Answer. At the present time, we do not have any major plans to
    fine-tune our organizational structure; there may be a few minor
    adjustments, but the structure basically works and we plan to continue
    it.
                     change in number and amount of grants
        Question. Prior to fiscal year 1996 the NEA was awarding
    approximately 4,000 grants per year, and in fiscal year 1997 the
    estimated number of grants will be 1,100 grants. What impact has the
    decrease in grant numbers had on the arts community?
        Answer. The reduction in the number of grants has had a detrimental
    effect on many aspects of the arts in this country. One must not forget
    the immediate effect on the American public: fewer opportunities to
    participate in arts events. This hardship has been necessitated even
    though a Louis Harris poll indicated recently that 79 percent of the
    American public supports public funding for the arts; a 57 percent
    majority favors the federal government's direct support of the arts.
    The fiscal year 1997 funding level of $99.5 puts the Endowment
    approximately at its 1972 level, despite tremendous growth in arts
    activity and demand for participation in the arts across the country.
    Arts organizations, like all other businesses, must pay 1997 prices,
    not 1972 prices.
        Grantees have long reported that federal funds are the most useful
    in raising private funds. As we have reported in past years, Endowment
    grants are matched many times over with private funds that often come
    as a result of the Endowment's imprimatur and stringent review process.
    Such private giving will decrease or disappear for many arts
    organizations that no longer receive Endowment support.
        Even those organizations that received funding from the Endowment
    in fiscal year 1997 were faced with many months of uncertainty leading
    up to their awards. They realized that the continued excellence of
    their programs would not be enough this year, and that many
    applications would be rejected for lack of funds. This uncertainty made
    it difficult to plan for projects in the coming months.
        Many of the grants awarded prior to fiscal year 1996 were to
    individual artists such as composers, choreographers, playwrights, and
    designers. Those grants now are precluded by legislation. Only
    fellowships in literature and awards to jazz masters and folk and
    traditional artists are available from the Arts Endowment.
    Consequently, dance companies, orchestras, theaters, and other arts
    organizations will, over time, have less work to present. New work is
    at the heart of artistic activity; without it organizations will
    stagnate.
        Question. Are there organizations which previously were recipients
    of grants that are no longer in operation for which their decline is
    attributable to the decrease in available funding?
        Answer. Because we are in only the first year of grants under the
    new structure and reduced funding, it cannot yet be documented that
    organizations have closed as a direct result of the cuts. We do know,
    however, that arts organizations have long been in a precarious
    position, and cannot sustain themselves for long without funding. For
    example, some 23 theaters have closed in the past five years. Dance
    companies are closing because they cannot find enough venues in which
    to tour. The Endowment has received clear and moving letters and
    telephone calls from organizations, many of which have been supported
    with federal funds for many years, stating that the withdrawal of
    funding this year puts their very existence in jeopardy.
                 leveraging federal funds with matching grants
        Question. Describe the matching requirements for recipients of NEA
    grants.
        Answer. The law requires that all Arts Endowment grants to
    organizations, with few exceptions, must be matched at least dollar for
    dollar, i.e., a one-to-one match. Many projects that we are supporting
    with fiscal year 1997 funds evidence a greater match. In addition, in
    our Planning & Stabilization category, all grants between $75,001 and
    $500,000 will require a match of at least 3 to 1.
        Question. Are the matching requirements a challenge for applicants
    to meet?
        Answer. The matching requirements are a challenge for many of our
    applicants, particularly the mid-size to smaller organizations and
    those of any size that have been having major fund-raising or
    accumulated deficit problems. In all instances, grantees report that
    Arts Endowment funds are an important catalyst in securing funds from
    the private sector.
        Question. Do the matching requirements limit the numbers of
    applicants?
        Answer. The matching requirements, particularly the 3 to 1 match,
    do limit the numbers of applicants. Probably a greater limiting factor
    (on the number of applications to the Planning & Stabilization
    category) is the Arts Endowment's prohibition on more than one
    application per year to the four categories: in the past, applicants to
    our Challenge Grant and Advancement Programs (precursors of Planning &
    Stabilization) were allowed to apply each year both for that type of
    grant and for a grant under another category or categories. Now, the
    applicant has to choose between, for example, an application to
    Planning & Stabilization or an application to Education & Access. This
    is a difficult choice for many organizations.
        Question. Have the requirements for the percent of match required
    of grantees remained constant?
        Answer. The matching requirements did change from our fiscal year
    1997 to our fiscal year 1998 guidelines, but only in the Planning &
    Stabilization category. Fiscal year 1997, three levels of match were
    described in the guidelines, 1-1, 3-1, and 5-1, depending on the size
    of the grant. For fiscal year 1998, this changed to two levels: 1-1 and
    3-1. The very largest organizations, it was seen, will tend to match at
    or above the 5-1 match, especially if they are mounting major capital
    campaigns for endowments. For the mid-sized and smaller organizations,
    the 5-1 requirement was seen as discouraging worthy groups from
    applying for what they truly needed and could reasonably be expected to
    match.
        Question. Must the grantees be able to prove/show in their
    applications that there is a high likelihood of raising the matching
    funds needed to secure the NEA grant?
        Answer. When organizations apply to the Arts Endowment, they must
    reflect the amount and source(s) of matching funds in their
    applications. Since applications in the four categories are currently
    submitted 7-11 months in advance of notification of grant award or
    rejection, many applicants are able only to estimate the match. But
    once applicants are successful and become grantees, they are monitored
    by several methods--revised budget requests, progress reports, cash
    requests--to insure that the match is valid and secure. Recipients of
    Planning & Stabilization funds for cash reserve and/or endowment
    purposes are monitored even more closely throughout and following the
    grant period.
        Question. How do the applicants for grants show the Endowment that
    they can provide the matching funds required with the NEA grant?
        Answer. Applicants for grants provide, as part of the project
    budget section on the application form, specific information on the
    total match expected toward the project for which they are requesting
    support.
                            underserved communities
        Question. If most corporate and foundation dollars are given
    locally, and if the largest and most prestigious organizations often
    receive those scarce gifts, how do the small organizations cities and
    rural areas and the organizations located there raise their matching
    funds?
        Answer. Because the amounts of the grant requests of organizations
    in small and rural areas tend to be relatively low, in keeping with
    their likelihood of being small to mid-sized organizations, matching
    resources often can be garnered from a combination of existing and new
    sources of revenue. For instance, grantees that have been awarded
    $15,000 for a strategic planning process can match the Endowment's
    money by utilizing $5,000 in earned income increases over the previous
    year's budget, $2,500 from accumulated surplus, $5,000 from a board
    contribution specifically for the purpose, and $2,500 of operating
    income used to support the staff salaries for participants in the
    planning effort. Since the amounts from each source are relatively
    small in and of themselves, small organizations can stretch existing
    sources to support the grant activity. That is not to say, however,
    that, in directing these resources for the grant purposes, the
    organizations may not be sacrificing other priorities.
        Some rural organizations propose marketing/audience outreach
    projects with the intention of raising matching funds from the results
    of the grant project itself, which might last as long as two years. For
    example, one rural organization applied for funding to participate in a
    regional tourism promotion, and anticipated enough new dollars from
    higher attendance to help meet the match.
        Many rural grantees time their grant projects to coincide with a
    larger campaign that will bring in sufficient dollars to match the
    Endowment funding. Such events as anniversary celebrations or, in a
    recent case, the retirement of the founding director, provide
    opportunities to go to donors for increases in their usual levels of
    contributions.
        Collaborations of organizations in rural areas are another source
    of match. For instance, a shared touring initiative or planning effort
    can generate revenue from a variety of sources--perhaps small amounts
    individually but significant when combined to meet the match.
        While it is often difficult for organizations in small and rural
    areas to raise foundation and corporate gifts, they are sometimes
    successful in this regard, at times receiving one-time awards for
    special projects. Some rural organizations are national in reach and
    can tap into more traditional funding sources. Artists' colonies, for
    example, may be relatively small and isolated; however, within their
    artistic field, they have access to a few discipline specific
    foundations and even some specialized corporate funding. And small
    rural festivals have had success selling advertising to local
    businesses.
        Question. How does the per capita receipt of grant funds by
    organizations in rural areas and small towns compare with those
    received by organizations in urban areas?
        Answer. Of the eight states having a population of under 1 million
    (Wyoming, Vermont, Alaska, North Dakota, Rhode Island, Delaware, South
    Dakota, and Montana), the per capita receipt of grant funds ranged from
    a high of $1.10 (Wyoming and Alaska) to a low of $.68 (Montana). On
    average, these states received $.90 per capita. The eight states having
    the largest populations (all over 9 million) (Michigan, Ohio, Illinois,
    Pennsylvania, Florida, New York, Texas, and California) averaged a per
    capita receipt of grant funds of $.30. California, with the largest
    population (of over 31 million) received $.26 per capita, and Michigan
    (the smallest of the eight with a population of 9.5 million) received
    $.11 per capita.
        Question. Is this difference attributable not to population, but
    due to the scarceness of funds necessary to meet the matching
    requirements?
        Answer. The figures indicate that, regardless of whatever
    difficulty organizations in small and rural communities may have in
    meeting the grant matching requirements, their success rate at the
    Endowment is quite good. While the eight smallest states represent less
    than 3 percent of the Endowment's total number of applications, they
    comprise 4 percent of the total number of awards (and over 5 percent of
    total dollars awarded). Individually, these states averaged awards of
    just over 50 percent of applications they submitted. South Dakota had
    the highest success rate, with more than 83 percent of its applications
    funded, and Delaware and North Dakota each had more than 70 percent of
    their applications funded. Vermont was lowest, with 33 percent of its
    applications funded. The average success rate for the country is 33.75
    percent.
                       funding sources other than federal
        Question. What percentage of your annual direct grantmaking
    capabilities comes from private sources?
        Answer. Only a minuscule percentage of the Arts Endowment's
    grantmaking capabilities is supported by non-Federal funds. For
    instance, in fiscal year 1995 less than 0.0033 percent of the Arts
    Endowment's grantmaking capabilities came from non-Federal, or private,
    sources; in fiscal year 1996 the amount was less than 0.12 percent.
        Question. What dollar amount of private, state, and/or local funds
    was used to meet the matching requirements for NEA grants? How do these
    matching funds compare with total funding available for the arts? How
    does the amount of federal funding for the arts compare with the annual
    total investment in the arts made by all entities in the US?
        Answer. Exclusive of matching funds for the Challenge Program
    (which requires a 3:1 match), in fiscal year 1996, 1,615 organizations
    met Endowment matching requirements, on average, with $10 for every $1
    awarded by the Endowment, a dollar amount of $559 million. In fiscal
    year 1996, the Endowment had a grantmaking budget of $80,734,000, out
    of a total budget of $99,470,000.
        As noted previously, the most recent Giving USA report indicates
    that about $6.6 billion total private giving to the arts in 1995.
    (Private giving figures are not yet available for 1996.) The National
    Assembly of State Arts Agencies reports that, in fiscal year 1995, the
    total legislative appropriation for the 56 state arts agencies was
    $265,558,735. Americans for the Arts (formerly the National Assembly of
    Local Arts Agencies) estimates local government funding for the arts at
    $650 million in 1995. The figures for state and local government
    funding are inclusive of program and administrative funding. In that
    same year, the grantmaking portion of the Endowment's budget was
    $137,512,000, out of a total budget of $162,311,000.
        Question. When a donor targets a gift to a specific field, does the
    NEA use the gift funds to replace appropriated funds that would
    normally be used in making the grant in that field, or is the gift used
    in addition to the appropriated funds?
        Answer. When a donor targets a gift to a specific field, the gift
    is used in addition to the appropriated funds, and not in place of
    appropriated funds. This is done to maximize the Arts Endowment's
    grantmaking funds. In light of the small amount of funds actually
    available through donations, as the figures in the prior answer
    indicate, few grants are made with donated funds in comparison to grant
    awards using appropriated funds.
        Question. If the gift is used to replace appropriated funds, are
    the donors aware that their gifts may not be buying an increase in
    overall program level for that area?
        Answer. Please see the answer to the previous question.
        Question. Gift giving to the NEA was $953,000 in fiscal year 1994,
    $766,000 in fiscal year 1995 and $960,000 in fiscal year 1996. What
    leads the NEA to conclude that giving will be lower in fiscal year 1997
    and fiscal year 1998, at an estimated level of $700,000?
        Answer. In fiscal year 1994, the Arts Endowment convened its ART-21
    Conference in Chicago, drawing participants from all over the country.
    The private funds received for the purpose of underwriting the ART-21
    Conference are reflected in the total gift amount for that year,
    boosting that figure to $953,000. In fiscal year 1995, the Arts
    Endowment focused on its own downsizing and reorganization. The Agency
    did not sponsor or convene any large events, as reflected in the total
    amount of gifts received in that year, only $766,000. In fiscal year
    1996, the Arts Endowment convened American Canvas, a series of six
    community-based meetings across the country, bringing together the arts
    community with civic, business, religious, government, education and
    community representatives to discuss topics designed to elicit concrete
    suggestions for how communities might best support arts at the local
    level in an era of dwindling public resources. The private funds
    received for the purpose of underwriting the American Canvas series are
    reflected in the total gift amount for that year, boosting that figure
    to $960,000.
        The Arts Endowment is not planning convocations similar to ART-21
    or American Canvas for fiscal years 1997 and 1998. Prudence, therefore,
    dictates that the gift projections for fiscal years 1997 and 1998
    should be closer to that of fiscal year 1995 than that of fiscal year
    1994 or fiscal year 1996.
        Question. What changes in legislative authority would be needed by
    the Endowment to solicit and invest private funds?
        Answer. At a minimum, the Endowment's authorizing statute should
    specifically provide ``solicit and invest'' authority. At present, this
    statute allows only gift acceptance. Based on its gift acceptance
    authority, the Endowment has implied solicitation authority for seeking
    private funds. However, the Endowment at present has no investment
    authority.
        Additional changes in legislative authority would be necessary in
    order to enable the Endowment to generate earned income (such as
    through operation of a gift shop, licensing of Endowment-related
    products, or other agreements with corporate donors to generate
    additional revenue).
        Question. The Institute of Museum and Library Services was last
    year permitted to ``solicit and invest'' private gift receipts. Is the
    NEA proposing any language which would give it the authority to do the
    same?
        Answer. The NEA has engaged in limited efforts to solicit funds
    since at least the early 1980's, and donations have been accepted since
    the creation of the agency. The ability to both solicit and invest
    would greatly enhance the agency's ability to attract private dollars
    to supplement the federal appropriation. The agency would welcome
    language such as that provided for the IMLS last year.
                                  partnerships
        Question. Describe your efforts to leverage federal funds through
    partnerships with other federal agencies, as well as state and local
    organizations.
        Answer. At the beginning of fiscal year 1997, the National
    Endowment for the Arts had 25 formal agreements with other Federal
    agencies to participate in collaborative partnerships. Among these
    agencies are the Departments of Agriculture, Commerce, Education,
    Housing and Urban Development, Justice, State, Transportation, Health
    and Human Services, the General Services Administration, and the U.S.
    Information Agency. These partnerships are supported by $3.859 million
    in funds from the other Federal agencies and $2.069 million in NEA
    funds.
        The Arts Endowment seeks to expand support for artists and arts
    organizations through Federal interagency collaborations to develop
    programs that specifically include the arts and that are jointly funded
    by the Arts Endowment and its Federal partner. Recent initiatives have
    notably involved ``non traditional'' Federal funding partners and a
    focus on the role of the arts in meeting the economic and social needs
    of communities.
        In these cases the collaborations involve a pooling of resources
    for specific purposes. Examples of joint funding ventures include the
    partnership between the Arts Endowment and the United States
    Information Agency to support the Fund for U.S. Artists at
    International Festivals and Exhibitions; Pathways to Success, a
    collaboration with the Department of Justice, that supports after-
    school and weekend programs for at-risk youth, their families, and
    their community; and The Arts and Rural Development Assistance
    Agreement, a partnership between the Endowment and the Department of
    Agriculture's Forest Service that supports arts-based rural community
    development projects.
        The majority of the jointly-funded interagency partnerships are
    supported by funds from other Federal agencies that exceed the amount
    of funds contributed by the Arts Endowment.
        Question. Are you planning on starting any new interagency efforts
    in fiscal year 1998?
        Answer. The number and focus of interagency agreements, the sources
    of their funding support, and the methods for their implementation vary
    from fiscal year to fiscal year. The program priorities of the Arts
    Endowment, the identified needs of artists and arts organizations, and
    unanticipated opportunities within the Federal sector all influence the
    development of interagency collaborations. Consequently it is difficult
    to predict the extent to which new Federal partnerships will be
    initiated in fiscal year 1998.
        Under a new Federal partnership that will commence in late fiscal
    year 1997 and early fiscal year 1998, the Arts Endowment will be
    collaborating with the U.S. Department of Education's Safe and Drug
    Free Schools Program in Creative Partnerships for Prevention, a Drug
    and Violence Prevention Program for Youth Using the Arts and
    Humanities. This program includes development of a Resource Guide for
    use in schools and community programs; a national awareness campaign; a
    World Wide Web site; and demonstration sites establishing and modeling
    arts-based prevention programs using a collaborative approach. Support
    from the Arts Endowment will enable an additional seven youth arts
    programs to participate with the eight original arts and humanities
    programs as demonstration sites. Arts organizations, school personnel,
    community organizations, youth, and their families will be involved in
    activities supported by this partnership.
        At the January 30, 1997, American Canvas National Forum, Secretary
    of Education Richard W. Riley announced five actions that the U.S.
    Department of Education and its partners are taking to support our
    schools through arts education and the Endowment's arts education
    initiatives that will continue in fiscal year 1998. They are:
      --Two publications to provide information and ideas about how schools
            can more fully integrate the arts into their curriculum.
            Transforming Ideas for Teaching and Learning the Arts is an
            idea book about improving education in general and arts
            education in particular. The Guide for Arts Education and
            School Improvement Resources to help teachers, principals,
            local school leaders, parents' groups, and local and state arts
            leaders to learn about funding sources for arts education
            programs.
      --An extension of the Department's partnership with the Arts
            Endowment to continue the work of the Goals 2000 Arts Education
            Partnership to the year 2000.
      --An annual awards program to honor arts education and business
            partnerships to support quality arts education at the state and
            local levels and to encourage more of them.
      --The recognition of outstanding schools, through the Department's
            Blue Ribbon Schools Program, that have used the arts to lift
            their school and their students to new levels of achievement
            and that are examples of excellence in instruction and student
            achievement.
      --The creation of a task force with parents, educators, researchers,
            and the arts community to explore ways in which art and music
            can help young children and families reach the America Reads
            Challenge.
                          internet access to the arts
        Question. How will the NEA computer systems replacement project
    enhance the world wide web/internet capacity of the NEA?
        Answer. Currently, the agency has virtually no telecommunications
    capability (e-mail or Internet access). Our Wang-based
    telecommunications system is outdated, outmoded, and limited to a few
    offices, and it has no direct link to any external networks. The
    computer systems replacement project spurred the launch of our World
    Wide Web site, which has been an extremely successful public
    information tool. Upon completion of the agency's local area network,
    the Endowment staff will eventually be provided with e-mail and access
    to the Internet. Access to the Internet most likely will be undertaken
    in collaboration with the National Endowment for the Humanities, which
    will defray costs for both agencies.
        Question. What do you see as the future of arts access on the
    Internet? Are any of the arts education funds in the Department of
    Education budget used for this purpose?
        Answer. The Internet will provide extraordinary opportunities for
    the public to have access to the arts through exhibitions, online
    workshops and classes, and other interactive programming. Along with
    the Department of Education and the Kennedy Center for the Performing
    Arts, the Endowment established and supports ArtsEdge, a national arts
    education network on the Internet. The Department of Education also
    supports GOALS 2000--which include the arts as part of a basic
    curriculum--and support materials on the Internet.
        Question. Is access to the arts improving through the use of the
    Internet?
        Answer. Yes, but further progress is needed in two areas: more
    people need access to the Internet--most people cannot are without it
    at this time--and more arts resources must be developed and made
    available on the Net. Many arts organizations have begun to move online
    with Websites and other Internet resources, but most don't even know
    how to begin. Open Studio, an Endowment initiative with the Benton
    Foundation, is placing free public access sites in cultural
    organizations in all 50 states. The initiative is also establishing 10
    national web mentoring centers throughout the country, training
    hundreds of arts organizations and artists to become content providers
    for the Internet. The NEA's own Website has received nearly 3 million
    hits since its launch in April 1996, and usage is increasing
    dramatically.
        Question. Is the Internet used by the NEA or its grantees as a way
    to reach underserved communities?
        Answer. Yes. Open Studio is placing access sites in all 50 states,
    with an emphasis on communities in rural and inner city neighborhoods
    traditionally defined as underserved. Furthermore, by establishing web
    sites, our grantees are making their programming available to anyone
    with access to a computer and connection to the Internet. We have had
    people accessing the Endowment's web site from all 50 states and around
    the world and our supposition is that some of those visitors are from
    underserved communities.
        Question. Do you coordinate any grant monies with the Institute for
    Library and Museum Services in their grant programs?
        Answer. We work with the Institute for Library and Museum Services
    to insure that both agencies are not providing funds for the same
    projects. In addition, our application form specifies that applicants
    may not use other Federal grants as match for our grants.
                                  initiatives
        Question. The foundation for the American Canvas project was that
    communities must take the primary responsibility to support their
    nonprofit arts. What benefits have the communities which participated
    in American Canvas seen to date? How will the communities continue to
    leverage their new knowledge and relationships?
        Answer. The American Canvas forums brought together more than 150
    national leaders as panel participants representing the arts,
    education, business, government, consumer organizations, civic groups,
    religious organizations, and foundations to determine the value of the
    arts in communities and how to build a solid infrastructure for the
    arts in America's communities. Each of the six privately funded forums
    explored a different aspect of the successful integration of the arts
    into communities. The hosting communities were chosen for their
    leadership in the development of innovative strategies for supporting
    the arts.
        As a result of the dialogue that took place at the various sites, a
    national steering committee formulated ten ``Calls to Action,'' one
    relating to each of the six forum topics and four which emerged as
    general concerns in all six forums. In January 1997, a committee of 100
    leaders representing a variety of sectors reviewed the Calls to Action
    and discussed specific ways in which their organizations and sectors
    could work together nationwide to assist communities in ensuring an
    arts legacy for future generations.
        American Canvas participants identified a number of revenue sources
    for the arts across the country, many of which may be suitable for
    replication elsewhere. Just as traditional percent-for-art programs (in
    which a small portion of federal, state, or local construction expenses
    are earmarked for the incorporation of artworks and other cultural
    amenities) have brought millions of dollars to the arts, other
    dedicated revenue streams are being developed, often tapping
    ``nonarts'' funds in the public sector to fund cultural activities.
    These include hotel/motel taxes and entertainment/recreation taxes;
    revenues from lotteries and gambling taxes; vanity license plate sales;
    and sales taxes (where a percentage of the sales tax is dedicated to
    the arts).
        Additionally, American Canvas participants identified cultural
    tourism as an important way in which cities attract visitors and are
    thus devoting a portion of their convention and visitors funds to
    cultural activities. Cities have also used cultural facilities as
    community revitalization tools and are able to secure economic
    development, housing, and transportation funding to support these
    activities.
        These and other federal programs, such as the funding for arts in
    rural areas through the Forest Service and the Department of
    Agriculture and funding for job training in the arts through the
    Department of Labor, along with many private sector programs, were all
    ways the American Canvas participants believed would help to strengthen
    a community's infrastructure around its nonprofit arts. These ideas,
    and others, and strategies for implementation are being shared with the
    participating communities and others. Most important, however, for the
    participating communities is that a cross-sector dialogue was begun at
    American Canvas which can be built upon and enhanced for the purpose of
    creating a broad and sustaining infrastructure for the community's
    nonprofit arts.
        Question. Since the program began in 1986, over 300 cities have
    been represented at the Mayors' Institute. Briefly, please describe the
    impact the Mayors' Institute has had on those cities.
        Answer. The Mayors' Institute on City Design introduces mayors to
    the cultural and economic value of good design in the public realm and
    teaches them effective techniques for promoting wise public and private
    sector investment in their cities' built environment. The Institute
    also addresses the design process as an exercise in participatory
    democracy, which can give citizens an opportunity to work together to
    determine the future of their collective home. The following are just a
    few examples:
      --Former Fort Worth, TX, mayor Kay Granger (now a member of the U.S.
            House of Representatives) gained the confidence in her own
            design judgment necessary to veto a proposal for an addition to
            the city's main public library that she thought looked like ``a
            chain store in a strip shopping center.'' She insisted on a
            process through which citizens could express their opinions
            about ``what a library should be and how it should function.''
            Eventually, the city built a facility that the mayor reported
            ``fit our downtown, fit our vision; this public building is
            beautiful and the people are proud of it.''
      --Mayor Jan Laverty Jones of Las Vegas, NV, asked the Institute for
            guidance in creating a ``gateway'' to the city's historic
            downtown and revitalizing Fremont Street, birthplace of Las
            Vegas's casino industry. The mayor was advised that it takes
            more than a gateway to make people go through it, and that she
            should concentrate on creating a destination that reflected the
            city's unique character. The result was the ``Fremont Street
            Experience,'' a multimedia sound and light show that has
            attracted millions of dollars of new investment in the
            surrounding area. Whereas only 20 percent of visitors to Las
            Vegas once visited downtown, now 80 percent do.
      --Only a few weeks ago the City of Boise, ID,--at the urging of Mayor
            Brent Coles, who participated in the Mayors' Institute in
            1994--sponsored a retreat for elected officials in the region
            of Idaho known as the Treasure Valley. The Treasure Valley is
            experiencing dynamic population growth that is putting extreme
            pressure on public resources while threatening the region's
            quality of life. The format of the retreat was based on that of
            the Mayors' Institute and resulted in a signed partnership
            agreement, drafted by the officials themselves, that promised
            cooperation among the communities in the Treasure Valley in
            developing plans that will allow new development while
            protecting those qualities that make the region special to
            those who call it home.
        Other reports from Mayors' Institute alumni include:
      --Mayor Bill Johnson of Rochester, NY, is transforming an abandoned
            supermarket building in a low-income neighborhood into an
            anchor for a mixed-use commercial development that will create
            a new neighborhood center.
      --Mayor Nancy Graham was recently featured in the New York Times for
            her efforts to revitalize West Palm Beach--efforts to which she
            credits her Institute experience.
      --The Civil Rights District of Birmingham, AL, was honored by the
            National Trust for Historic Preservation, in recognition of a
            project that evolved from Mayor Richard Arrington, Jr.'s
            participation in the Mayors' Institute.
      --Mayor Rick Mystrom of Anchorage, AK, is using a museum expansion as
            a catalyst for downtown revitalization.
                          establishing arts endowments
        Question. Please explain how NEA funds are used to assist grantees
    in establishing self-sustaining endowments or to establish cash
    reserves.
        Answer. The National Endowment for the Arts awards Stabilization
    grants to create or augment endowments and cash reserves. These grants
    assist arts organizations in two ways: Federal funds are used to create
    or augment the endowment or cash reserve; and, Federal funds are used
    to leverage matching funds. Typically, grant recipients are conducting
    large, multi-year capital campaigns. The traditional capital campaign
    model has two phases, leadership (sometimes referred to as the quiet
    phase) and public. Solicitations in the leadership phase are made to
    board and capital campaign committee members as well as close friends
    of the institution. The public phase involves solicitations of
    individuals and organizations less closely allied with the cultural
    institution. Generally, the public phase of a capital campaign is the
    most challenging and difficult stage. Stabilization grants can be very
    effective in leveraging non-traditional donors to give at a significant
    level.
        Due to the technical nature of endowments and cash reserves, the
    agency takes additional measures in the review of such applications and
    grants. Independent management assessments are conducted on all
    Stabilization applications recommended by discipline panels. This
    assessment analyzes non-artistic factors of the application which
    relate to the applicant's ability to carry out the project as well as
    the potential impact of the proposed grant. Staff members with
    expertise in non-profit accounting monitor endowment and cash reserve
    grants. In addition, it is required that grantees take the necessary
    legal measures to ensure that endowments and cash reserves will be held
    intact for ten years following the grant end date. These legal
    documents are reviewed by the agency's Office of General Counsel.
                             true endowment for nea
        Question. Has the NEA sought a federal endowment for itself?
        Answer. NEA supports the concept of establishing a true endowment
    at the Federal level. Testimony offered by witnesses in a 1995 Senator
    Labor and Human Resources Committee hearing suggested that to maintain
    the at-that-time current level of NEA grantmaking ($130 million per
    year) would require a corpus of about $2 billion to $4 billion,
    depending on projected long-range rates of inflation and interest. NEA
    would support the capitalization of such an endowment either through
    the appropriations process or by means of dedicated funding sources
    such as the reception of a portion of copyright fees or proceeds from a
    national lottery.
        The agency strongly supports the efforts of individual state arts
    councils to establish self-supporting endowments. The state of
    Delaware, for instance, recently completed a multi-million capital
    campaign to establish such a permanent endowment, and the NEA provided
    a $750,000 Challenge Grant early on as seed money.
        Question. Does the Endowment seek to learn from and offer insights
    to executives and staff from other endowment and philanthropic entities
    in the form of details and exchanges?
        Answer. There are many occasions, both formal and informal, in
    which various members of the Endowment staff are in communication with
    executives and staff from other endowment and philanthropic entities.
    Periodic meetings with groups of grantmakers have been held at the
    Endowment with the Chairman and senior staff. Staff members have
    attended regular meetings of Grantmakers in the Arts. Individual
    meetings on specific issues and questions take place regularly. There
    is communication and an exchange of ideas and experiences on a
    continuing basis.
                     NATIONAL ENDOWMENT FOR THE HUMANITIES

    STATEMENT OF SHELDON HACKNEY, CHAIRMAN

                                 budget request

        Senator Gorton. We will now hear from Dr. Hackney of the
    National Endowment for the Humanities.
        Dr. Hackney, you have suffered the fate of almost all
    second witnesses.
        Dr. Hackney. I am used to it, Mr. Chairman.
        Senator Gorton. In committee hearings, the attendance is
    not as great now. You are nonetheless, of course, welcome, and
    I want to join in the comments of some of my colleagues earlier
    in expressing our regret at your departure.
        I am sure you have always regarded yourself more as a
    teacher than anything else, and you will look forward to going
    back to that career and we hope and wish for you great success
    there, and we thank you for your service to the National
    Endowment for the Humanities.
        But before you go, we would like to hear from you today. We
    would especially like to hear from you about your search during
    this difficult period of time for different, better, and more
    effective ways of carrying out the functions of the Endowment,
    so that we will be happy to listen to your opening statement.

                    summary statement of dr. sheldon hackney

        Dr. Hackney. Thank you very much, Mr. Chairman. I
    appreciate very much the opportunity to come and speak with you
    this morning.
        I am leaving Washington at the end of my term at the end of
    July, so I have been thinking perhaps a little bit more than
    usual about what the last 4 years has meant to me, and what we
    have been able to do at the NEH.
        Given the shortage of time, I would prefer not to read my
    statement.
        Senator Gorton. Your statement will be included in the
    record.
        Dr. Hackney. Thank you very much, and I will even be very
    brief in my oral remarks, so perhaps we can talk about the
    things that are of most interest to you. But I would like to
    say a word about the National Conversation on American
    Pluralism and Identity, and also maybe a brief word about a
    couple of the other priority programs that the NEH has been
    engaged in recently.
        The National Conversation on American Pluralism and
    Identity is the most significant special project that we
    carried out during my tenure. It is one in which I was deeply
    interested myself, and it is a project that has stimulated now
    3 million Americans to think more carefully about the meaning
    of being an American, about what values hold us together as a
    country.
        Most of those people were brought together on the Internet
    and by television and radio, but the meat and potatoes of
    humanities program are reading and discussion groups, and about
    80,000 Americans have been engaged with each other in reading
    and discussion groups in intensive face-to-face conversations.
        The need for the National Conversation was apparent to me
    at the outset of my tenure here at the National Endowment for
    the Humanities, and I believe this need is felt by most
    Americans today. That is, a sense of fragmentation, a sense
    that as a society we have been drifting apart from each other,
    that the bonds that tie us to each other, bonds of mutual
    responsibility, have been loosening of late. It was that sense
    of atomization that made me think that one thing the NEH could
    do was to use the power of the humanities to bring people
    together and to inform their thought about their connections
    with each other and about the meaning of their society, and we
    have done that.
        Let me say, this drifting apart is something that has been
    going on in America for 25 or more years. It has gone on
    through economic cycles, up cycles and down cycles. It has gone
    through Republican and Democratic administrations in
    Washington. It is not related, basically, to those. It is
    responding to more fundamental forces in our society.
        I will not give you my 50-minute lecture that I am going to
    be authorized to do soon about why we have been having this
    sense of fragmentation for the past 25 or more years, but
    briefly it is in response to the social revolutions that
    occurred in the 1960's, both the good aspects of those rights
    movements and also some of the darker aspects of the sixties,
    the friction that occurred in society.
        But more fundamentally, it is society responding to the new
    situation in the world, to the technological revolution that we
    are still living through, to the global marketplace that makes
    us all feel uncertain about our jobs in the future, and to the
    end of the cold war that makes the geopolitical situation less
    predictable than it was.
        For all those reasons, those four collections of reasons,
    if you will, we have been sort of drifting apart from each
    other. And public opinion polls show that. Lou Harris, for
    instance, has a poll in which he asks respondents whether they
    have little confidence, some confidence, or a lot of confidence
    in a long list of American institutions--the Presidency, the
    Congress, the press, universities, the clergy, and so on.
        What is interesting about that poll is not the particular
    pecking order of institutions within American life, but the
    fact that the level of confidence that Americans feel in those
    American institutions rise and fall together. They started
    falling precipitously in the 1960's. They drifted down further
    through the 1970's. There was a brief spike upward in the first
    Reagan administration in the early eighties, then they resumed
    their decline through the late eighties to today.
        Now, I think that decline is something to worry about, but
    we ought not to think that it is because of the performance of
    any of those institutional sectors of American life. That is a
    surrogate measure, if you will, of something that is more
    fundamental that is going on in American life.
        One other bit of evidence of that is that we know from
    polls as well that Americans are less trustful of each other
    than they were 25 or 30 years ago. We have polling data that
    shows that.

                  the national conversation and civil society

        So this sense of fragmentation has been going on for a long
    time. NEH launched the National Conversation on American
    Pluralism and Identity to bring Americans together to talk and
    think and listen to each other about what pulls us together in
    our very diverse society. We were doing this before Robert
    Putnam, the Harvard professor who made himself and the issue
    famous in his article called ``Bowling Alone,'' in which he
    quantified the drop in American participation in voluntary
    organizations.
        And, thus, civil society as a concept became very
    interesting to intellectuals and journalists, and a great
    debate, a healthy debate has been going on since that time
    about civil society--that is, the nongovernmental, nonprivate,
    noncommercial sector of American life. The National
    Conversation is in that sector, and we have been bringing
    Americans together.
        Now, I think the good news from the conversation is that
    Americans are eager to talk to each other about what holds us
    together and about what divides us, as well. They are eager to
    work with each other across all of the usual divides of our
    culture--that is, race, class, gender, ethnicity. All of those
    dividing lines find Americans willing to leap across to work
    with other Americans from different backgrounds on common
    problems or on mutual understanding. That, I think, is very
    good news.
        Americans, as our conversation results show, like the fact
    that we are a diverse country, but they worry as Americans
    frequently have, about our cohesiveness. I think that is a
    healthy worry, because it means that in this traditional
    tension between individualism and community in America, that
    Americans now are worrying that we are not paying enough
    attention to community, and I think that is good.
        The bad news is that we know also from polling data and
    from participation in the National Conversation that there are
    worrisomely large levels of negative stereotyping in America.
    People in each group, each cultural heritage group, have
    negative stereotypes of members of other cultural heritage
    groups. When one speaks of race in America these days, one
    cannot simply mean black-white relationships. It is a
    multicultural problem, if you will, and multipolar, as well.
        Americans want there to be a common identity that all
    Americans have, and have equally. They want an arena, a large
    area of American life in which all Americans come just as
    Americans, and in which they are judged by the same criteria as
    all other Americans.
        At the same time, they want to honor their own particular
    cultural heritage. They want to be both and that is the sort of
    thinking that we have to learn to do in the future.

                      the conversation and american values

        It is clear from the conversation, and as one would learn
    as a student of American history, that the core of the values
    that hold us together as a society are those values that were
    enunciated by the Founding Fathers in the Constitution and the
    Declaration of Independence. They are the values of self-rule
    and the values not only of individual rights but also of
    democracy.
        It is America as an idea of democracy. It is the fact that
    we committed ourselves as a nation at the outset to both
    liberty and equality. Those two things do not always pull in
    the same direction, and they change their meaning as new
    circumstances occur, so it is the working out of the meaning of
    liberty and equality in American life that is the great
    challenge of the future.
        Let me bring to your attention a young, phenomenal golf pro
    named Tiger Woods who has caused a good bit of a stir lately,
    having just won the masters at the age of 21, the youngest
    champion ever. He is interesting, because he is frequently
    spoken of as an African-American, yet he has now begun to
    remind reporters that that is not an accurate description of
    him.
        His mother is Thai, a Thai-American. His father is African-
    American and American Indian and some Irish, so he is a
    multicultural American, and he wants not to be known by any one
    of those components but by all of them. He wants to be an
    American and all of those other things at the same time. That
    is something that most Americans agree to and think is right
    and proper.
        So I find the meaning of America that comes out of the
    National Conversation to be our commitment to the idea of
    democracy. I think that is broadly and widely shared, but it
    needs to be brought to the surface by Americans, among
    Americans as they think about the meaning of their lives and
    what holds them together.
        To be sure, there are other common traits that Americans
    have that we could probably have difficulty identifying and
    agreeing upon, but they are there. Most Americans, and
    certainly foreigners, recognize Americans all the time by their
    behavior and by the things that they hold dear: by their
    individualism, for instance, and by their self-reliance, and by
    their tolerance. Those things are characteristics that go into
    an American national character.
        So I think the National Conversation has been enormously
    successful as well as valuable for the country, and I am
    pleased that we did it. I am in the midst of preparing--it is
    almost completed--a report to the Nation that will be published
    before I leave NEH. You can hurry right now and make your
    reservations at the Government Printing Office for your copy.
    It should be interesting, and it really is an extended essay as
    well as a statistical report on the conversation.

                          transition to a lower budget

        Finally, let me say that despite the fact that our budget
    was cut dramatically in 1996 by 36 percent, we have made the
    transition to the lower level with a great deal of pain, but
    also with a great deal of pride as well.
        We have been able to do some new things, to focus anew on
    the quality of humanities education, and on getting the
    humanities into the new technological era, into the digital
    age, if you will, in various ways.

                               prepared statement

        We have been doing that with great imagination. We are not
    doing business as usual. We have been finding partners outside
    the Endowment to help fund programs that we think are
    important. We will continue to do that, and we have begun to
    operate even a little bit differently within the Endowment.
        So even though we are smaller we are no less important to
    the humanities and the Nation, and I thank you for your
    support, Mr. Chairman.
        Senator Gorton. Thank you, Dr. Hackney. That was as
    fascinating an opening statement as I have heard in some time,
    and I solicit from you the full 50-minutes worth when it is in
    print. I will be delighted to read it.
        Dr. Hackney. Thank you.
        [The statement follows:]

                     Prepared Statement of Sheldon Hackney

        Mr. Chairman and Members of the Committee: It is an honor
    to appear before this Committee once again to speak on behalf
    of the National Endowment for the Humanities. I welcome this
    opportunity to discuss the agency's fiscal year 1998 budget
    request and to speak with you about some of the ways the
    Endowment contributes to the educational and cultural life of
    the Nation.
        I would first like to tell you how pleased we at the
    Endowment were for President Clinton's strong statement of
    support in his State of the Union Message to Congress in
    February. Speaking of the importance of building a vital
    national community, the President reminded us that ``the
    enduring worth of our nation lies in our shared values and our
    soaring spirit'' and called for continued support of the
    federal government's efforts to advance the humanities and the
    arts. I know that this Committee, as it has shown over the
    years, also shares both the President's affirmation of the
    importance of the humanities and of the role the Endowment
    plays in providing a national focus to efforts to help promote
    them.
        The American people have every reason to be proud of NEH's
    more than three decades of accomplishments in pursuit of its
    mission. Those accomplishments would not have been possible
    without the strong bipartisan support of Congress. The
    Endowment's grants to educators, scholars, and institutions
    across the Nation have helped to preserve and strengthen our
    cultural heritage. NEH exists to encourage humanities
    activities of truly national significance. Among the many
    outstanding examples of projects that Federal funding of the
    humanities has made possible are the documentary editions of
    the papers of presidents of the United States, summer seminars
    and institutes for teachers to revitalize their teaching of the
    humanities, educational films for television like Ken Burns's
    pathbreaking series on the Civil War, touring museum
    exhibitions like the recent ``Splendors of Imperial China''
    show at the National Gallery of Art, efforts to preserve
    historically important brittle books and newspapers, and the
    work of the individual state humanities councils across the
    country that, in partnership with NEH, annually enrich the
    lives of millions of Americans.
        We are pleased that the President has requested an
    appropriation of $136 million for the agency for fiscal year
    1998. While this request represents an increase over our
    current funding of $110 million, it is still far below the $172
    million budget the agency had just 2 years ago. The cumulative
    effect of these 2 years of reduced funds has been to place an
    extraordinary strain on the Endowment's programming and
    operations--the number of grants we have been able to make has
    plummeted by about two-thirds and the award amounts for most of
    the projects we have been able to support have had to be pared
    down considerably. Make no mistake: This deep cut in the NEH
    budget has resulted in a dramatic reduction in the availability
    of high quality humanities projects and programs for the
    American people and is eroding the humanities infrastructure
    that NEH worked hard to help build over the last 30 years. The
    fiscal year 1998 funding request we have presented to Congress
    is designed to restore part of what we lost and to address
    specific needs in the humanities.
        Despite the present dire state of our funding resources, I
    want to assure you that the Endowment remains a vital national
    proponent and supporter of the humanities, that we are eager
    for the future, and that we will continue to search actively
    for ways we can better serve the American people. In recent
    years, for example, we have recast our relationship with the
    state humanities councils into a new Federal/State Partnership
    that has opened up fresh opportunities for the Endowment and
    the individual humanities councils to work more closely
    together in our shared mission of providing thoughtful,
    stimulating humanities programming for all the nation's
    citizens, reaching into every community in all 50 States and
    six special jurisdictions.
        Our budget justification describes in some detail our
    current activities and our plans for fiscal year 1998 and the
    coming years. I'd like to take a moment of the Committee's time
    to discuss a few of these items with you today.
        One critical way the Endowment helps to preserve and to
    extend access to our cultural heritage is through the financial
    support we provide for teams of scholars to produce documentary
    editions of the papers of important people and seminal events
    in our Nation's history. By searching out and drawing together
    documents from thousands of repositories nationwide, editions
    projects make available important materials for the first time.
    Included among these projects are editions of the papers of
    Benjamin Franklin, Thomas Edison, Dwight Eisenhower, and Martin
    Luther King, Jr. Such large-scale editorial projects have a
    tremendous intellectual impact and are truly the building
    blocks of research. For example, historians have used the NEH-
    supported multi-volume edition of the Journals of Lewis and
    Clark to publish more than 20 books on different aspects of the
    expedition. Similarly, NEH support for the publication of 32
    volumes of the papers of George Washington has helped to make
    these essential primary source materials more widely available
    to students and scholars of Washington and the American
    Revolution. Indeed, the eminent historian of the nation's early
    period, Edmund S. Morgan, has hailed the editions of the papers
    of the ``founding fathers''--which have been made possible, in
    part, by funding from NEH--as the ``major scholarly achievement
    of American historical scholarship in this century.''
        Because of drastic cuts in funding for NEH, however, we
    find ourselves in the difficult position of not being able to
    support a number of worthy editions projects we have been
    supporting over the years. These are projects that make up an
    important part of our American Legacy. The nation thus will
    lose not only the investment we have already put into them, but
    will also forfeit their rich compilation of knowledge.
        To address this situation, we are proposing at our $136
    million fiscal year 1998 budget request level to implement an
    American Legacy Editions special initiative that would more
    than double the amount we are now able to provide to these
    projects, which would help ensure the continuation of these
    important undertakings. Under this special competition,
    projects would be provided with a combination of outright
    grants and the offer of ``matching grants'' from the Endowment,
    which would help support operating costs and greatly speed the
    projects to completion, and endowment-building Challenge
    Grants, which would help projects invest funds that would
    generate future operating income. We estimate that if this
    initiative were continued at this higher funding level for the
    next decade, these projects could be sustained and placed on a
    sound financial footing.
        Another area that is commanding a great deal of our
    attention and our creative thinking involves the relationship
    between the humanities and the new electronic information
    technologies. While NEH has long supported innovative
    humanities projects that use CD-ROM's, the Internet, and other
    digital formats, the additional funding the agency is
    requesting for fiscal year 1998 will enhance our national
    leadership role in preserving, digitizing, and disseminating
    important cultural and historical materials. We are in fact
    currently drafting a special report on the humanities and
    technology, which we expect to issue later this spring, but I
    would like to mention one or two examples of the kinds of
    things the Endowment is now doing and plans to do more of in
    the future.
        In 1996, the Endowment launched a special three-year
    special initiative, Teaching with Technology, that is helping
    to develop and introduce students to rich humanities content
    via CD-ROMs, the Internet, and other electronic technologies.
    The first grant deadline of this programming initiative yielded
    more than 300 proposals from schools and organizations across
    the nation, but scarcity of funds limited us to funding only a
    small number of projects. Included among the grants we were
    able to make was a project at Northwestern University in
    Evanston, Illinois to develop and deploy a multimedia database
    on the history of the United States Supreme Court. Recently
    included on the World Wide Web, , the project is enabling students from around the
    country, and the world, to learn more about this nation's
    highest court. The project reports that ``visits'' or ``hits''
    at this web site are averaging a stunning 250,000 per month.
    The Endowment also supported a project under this initiative at
    Miami University in Ohio that is helping teachers of Latin use
    electronic resources in their classrooms and a project at the
    University of Virginia involving the use of CD-ROMs and the
    Internet to teach the history of the American Civil War. With
    the funds requested for fiscal year 1998, we would be able to
    build on these successes by putting in place another special
    programming effort for projects that will jump start the
    process by which schools and their teachers become more
    competent, and comfortable, with these new humanities materials
    and technologies.
        In this context, I know that the Committee will also be
    excited to hear about a major new partnership the Endowment has
    just entered into with the MCI Communications Corporation and
    the Council for Great City Schools (CGCS). MCI has committed
    $500,000 over two years to help create a new website, called
    ``EdSiteMent,'' that will provide one-stop shopping for
    teachers, students, and parents who are searching for high
    quality educational materials in the humanities on the
    Internet. Drawing on the Endowment's acknowledged experience in
    supporting projects in this area and using our respected peer
    review process, a Blue-Ribbon panel composed of leaders in
    government, business, and education and parent organizations
    will select the materials for inclusion on the ``EdSiteMent''
    website. NEH will also develop teacher guides for using the
    website in the classroom and the Council of Great City Schools
    will set up a hotline for teachers in need of assistance. We
    hope this public/private partnership will be a model for many
    other such endeavors in the future.
        The Endowment also intends to continue and to extend the
    national leadership we provide for efforts to digitize and make
    more accessible such important humanities texts and documents
    as the Dead Sea Scrolls manuscripts, ancient Egyptian papyrus
    fragments, the entire surviving corpus of ancient Greek texts,
    and the works of Shakespeare. Such projects will ultimately
    offer students, researchers, educators, and the general public
    electronic access to a rich array of original texts and
    supporting documentation pertaining to the roots of Western
    Civilization.
        Shifting gears slightly now, I would also like to tell you
    briefly about another programming initiative called My History
    is America's History. The Endowment's new Office of Enterprise,
    which is serving as a focal point for NEH's efforts to extend
    the reach of its programs, is coordinating the development of
    this effort. The initiative is designed to encourage Americans
    to learn more about the history of their families and to relate
    this history to the broad sweep of events and trends in
    American history and world history and will serve as a
    wonderful record of community history. We think this program
    has the potential of bringing the humanities into the lives of
    a broad segment of the public, which has been one of my primary
    objectives as Chairman of NEH. I should also mention that our
    Enterprise Office has been active on a number of other fronts,
    particularly our efforts to build partnerships with other
    organizations to promote the humanities like the MCI/NEH/CGCS
    ``EdSiteMent'' website I have already mentioned and the joint
    arrangement we made last year with the Andrew W. Mellon
    Foundation to support humanities fellowships at independent
    research centers.
        In addition to this sampling of some of the special
    features of our fiscal year 1998 budget submission, I want to
    stress to you that the Endowment will also be continuing the
    support we provide for areas of the humanities where the need
    is greatest and where our leadership can continue to have the
    greatest impact: humanities education, the preservation of
    endangered research resources and artifacts, scholarly
    research, public programming, and the leveraging of private
    contributions to humanities projects and institutions.
        We will continue to help improve the quality of education
    in America by providing opportunities for teachers of the
    humanities to renew and strengthen their knowledge in their
    fields. The Endowment believes, and has long operated on the
    premise, that there can be no more productive use of the
    nation's resources than to invest in quality education. Each
    year, in fact, NEH supports a broad array of seminars and
    institutes that are attended by thousands of school teachers
    and college teachers from all over the country. The ultimate
    beneficiaries of such seminars and institutes are the hundreds
    of thousands of American students--in rural, inner-city, and
    other classrooms, as well as in colleges and universities--who
    annually are taught by these teachers. In the past twenty
    years, NEH seminars and institutes in the humanities have
    reached more than 50,000 teachers in every state of the union;
    these teachers have in turn reached more than 7.5 million
    students in the first year after their seminar, not to count
    subsequent students who will also benefit.
        The Endowment's projects that advance learning in the
    humanities make a profound and sustained impact on the lives of
    teachers and, by extension, on their students. Every year in
    fact we receive many statements from teachers who have attended
    NEH-supported seminars or institutes testifying to the impact
    of this experience on their teaching. For example, a public
    school teacher from New Jersey who attended last summer's
    seminar at Kenyon College in Gambier, Ohio, on ``The Poetry of
    Wordsworth and Keats'' recently wrote: ``I could have read
    Wordsworth and Keats for an entire lifetime in my own home and
    I would not have been able to gain the knowledge that I
    acquired during the four weeks that I spent at Kenyon College *
    * * [I]t has had a great impact on my performance in the
    classroom overall. I have been rejuvenated [and] my children
    are still excited when I tell them about it. In an area that
    does not value education as much as it should, I can see that
    my love of learning and my quest for knowledge has had an
    impact on their way of thinking.''
        The effectiveness and impact of the Endowment's
    comprehensive efforts to preserve and broaden access to
    historical materials vital to our cultural heritage have also
    been broadly recognized. NEH is in fact the acknowledged
    national leader in the movement to preserve cultural resources
    that are in danger of being lost forever because of the high-
    acid content of the paper on which they are printed or the
    improper way they have been stored and handled. This effort has
    produced impressive results: Over the years, NEH has helped to
    preserve 750,000 brittle books and 55 million pages of American
    newspapers on microfilm and to improve the storage of 27
    million objects of archaeological, ethnographic, and historical
    importance held in American libraries, museums, and archives.
        In recognition of our importance as a national coordinator
    of preservation efforts, the Board of Directors of the
    Association of Research Libraries recently commended ``the
    overwhelming success of the NEH preservation program in
    preserving the nation's heritage and culture'' and hailed the
    Endowment's effort ``as a critically important program to
    ensure the preservation of and access to important * * *
    materials that are vital to our nation's ability to function as
    a democracy.'' The fiscal year 1998 NEH budget request would
    help NEH quicken the pace of these preservation efforts that
    have slowed considerably in the last two years because of
    reductions in the agency's budget.
        The Endowment is also a critical national source of support
    for important research and scholarship in the humanities. NEH
    grants to American scholars have resulted in thousands of books
    and articles that have added to our storehouse of knowledge of
    the past and have garnered hundreds of nationally recognized
    awards, such as Pulitzer Prizes, including the recently
    announced 1997 Pulitzer Prize for History; Bancroft Prizes; and
    National Book Awards.
        NEH has long been a crucial funder of such major scholarly
    undertakings as the compilation of dictionaries, historical and
    linguistic atlases, and encyclopedias. These complex projects--
    which will serve as intellectual tools for future scholars,
    students, and general readers alike--do not have ready access
    to corporate, private, state, and local sources of funding and
    thus must rely on NEH support to continue their work. One such
    project that received a good deal of publicity recently is the
    NEH-supported archaeological team in Virginia that discovered
    and excavated the original Jamestown fort constructed by
    English settlers soon after their arrival in the New world in
    1607. This fort, long thought to have been destroyed by
    erosion, shows promise of adding to our knowledge and
    understanding not only of the aspirations of the English in the
    New World, but also about their encounter with Native American
    groups. The Jamestown archaeology project serves to remind us
    that collaborative research in the humanities, as in the
    sciences, typically involves substantial start-up costs and
    requires sustained support over many years. The project also is
    a model of how NEH matching funds can be used to leverage
    third-party funding--in this case, from the National Geographic
    Society--in support of basic research.
        One of the most rewarding experiences of my tenure as
    Chairman of NEH has been to observe firsthand the many ways the
    agency helps Americans learn more about their heritage, their
    culture, their past. Each year, for example, the individual
    state humanities councils, working in partnership with NEH,
    reach millions of people in libraries, Chautauqua-style tents,
    historical societies, grange halls, church basements, and
    senior citizen centers with quality humanities programs and
    presentations.
        Additional millions of Americans are also touched by
    national projects supported directly by NEH. Our funding makes
    possible such critically acclaimed television documentaries as
    the Ken Burns films and biographies of presidents Eisenhower,
    LBJ, and FDR. Three of the four blockbuster series that opened
    last fall's PBS television line-up were NEH-funded films: ``The
    West,'' which recently won a coveted George Foster Peabody
    Award, ``The Great War and the Shaping of the Twentieth
    Century,'' and the four-hour documentary on the life of
    President Theodore Roosevelt. The Endowment also supports media
    projects that illuminate other aspects of our national
    heritage, such as an award we made recently to the Institute of
    Language and Culture in Alabama to develop a six-hour radio
    series--In Their Own Voices: The WPA Ex-Slave Narratives--which
    is drawing on the more than 2,000 interviews of ex-slaves
    gathered through the 1930's WPA Writers Project.
        The fact that the Endowment's public programming efforts
    have a distinct impact on the cultural life of America is also
    demonstrated by the millions of Americans who annually visit or
    participate in NEH-supported humanities projects and by the
    geographic breadth and diversity of these projects. Currently,
    there are 147 educational exhibitions on humanities subjects
    and themes open to the public that will be seen during the
    course of their travels at more than 400 small and large
    museums, libraries, and other cultural institutions nationwide.
    The Anchorage Museum of History and Art and the Coastal Yukon
    Mayors Association, for example, received funding to mount a
    traveling exhibition of Yup'ik Eskimo masks drawn from the
    Arctic collections of major American and European museums. This
    exhibition, which explores the use of the masks in dance and
    ceremony, opened in the small rural Eskimo village of Toksook
    Bay in Alaska, traveled to the regional center of Bethel, and
    then went to Anchorage, where it was seen by nearly 200,000
    museum visitors. It is now en route to museums in New York
    City, Washington, D.C., and Seattle.
        Another example of the way NEH brings an essential national
    prospective to public humanities programming is the exhibition,
    ``Barn Again!,'' which examines the barn as an agricultural
    structure, a monument on the American landscape, and a symbol
    of community and rural life. With funding from the Endowment
    and spearheaded by the Utah Humanities Council in cooperation
    with the humanities councils in Alabama, Georgia, Oregon, Ohio,
    West Virginia, Illinois, and Missouri, the exhibition and
    allied public programs are being presented at thirty-two small
    rural museums throughout these states, including the West
    Virginia communities of Mannington, Point Pleasant, Weston, and
    Elkins.
        As part of the agency's overall efforts to broaden
    Americans' access to the humanities, in fiscal year 1998 the
    NEH Challenge Grants program will sponsor a special initiative
    for public libraries to help them build endowments to
    strengthen their humanities programming. To make fund-raising
    more feasible for these institutions, particularly for public
    libraries located in rural areas or inner cities, the program
    will require only a two-to-one match under this initiative,
    rather than our standard three-or four-to-one match. NEH
    Challenge Grants are the Endowment's principle means for
    leveraging private support for the humanities.
        The Endowment remains the catalyst nationwide for private
    support for the humanities. When NEH awards a grant, by virtue
    of our rigorous merit review process, it also certifies to
    other potential funders the high quality of the project. As the
    Secretary of the Andrew W. Mellon Foundation, one of the
    nation's largest independent foundations, has stated: ``[T]here
    is little doubt that many non-federal donors welcome the
    opportunity for joint support of projects with NEH * * *. Far
    from discouraging non-federal support for the humanities, NEH
    has stimulated private philanthropy.''
        Finally, I thought the Committee would be interested in a
    progress report on the national conversation. NEH's role in the
    initiative, as a funder, has drawn to a close, and we are now
    preparing a comprehensive report to the nation. This report
    will be not so much a statistical or quantitative assessment,
    although there will be much of that in it, but rather it will
    try to convey a sense of what was said in the conversations
    that took place in the more than 140 communities in 42 states,
    the Virgin Islands, and the District of Columbia over the life
    of the initiative and what conclusions one can make about
    Americans' many thoughts and opinions about the pluralistic
    nature and identity of their nation. We will publish and widely
    distribute the report sometime this summer.
        In closing, I must return once again to the issue of money.
    While the Endowment continues to forge ahead and to think
    creatively about ways we can continue serving the American
    people, it is also true that we need sufficient financial
    muscle to bring our plans to fruition. As small as NEH's budget
    is, the Endowment is still the single largest national source
    of funding for the humanities. The Endowment's work is a
    necessity, not a luxury. Indeed, many recent studies and public
    commentaries have indicated that the private sector and
    foundations can not and will not shoulder the burden for a
    diminished NEH. Our fiscal year 1998 budget request, which is
    tailored to the plans and program emphases I have discussed in
    this statement, represents a prudent investment that a great
    nation such as ours must make in activities that support the
    unglamorous but critical task of preserving America's heritage
    and sharing it with the American people. I can think of no
    nobler purpose.

                     prepared statement of senator cochran

        Senator Gorton. Due to a previous commitment, Senator
    Cochran was unable to attend the hearing, I have a prepared
    statement which will be inserted into the record at this point.
        [The statement follows:]

                     Prepared Statement of Senator Cochran

        Mr. Chairman, I join you in welcoming Dr. Sheldon Hackney
    and I congratulate Dr. Hackney, and take this time to let him
    know we have appreciated his service as Chairman of the
    National Endowment for the Humanities. This week he announced
    his intention to return to the University of Pennsylvania to
    teach history.
        The National Endowment for the Humanities is better for his
    tenure. A scholar in history, he is sensitive to the importance
    of not only the study and preservation of our past, but making
    sure that study is modern, and that we cultivate our foundation
    for the future. The Teaching With Technology Grants, first
    awarded last year, will aid in the new development of materials
    for classroom use with state-of-the-art equipment. This is an
    important contribution to our society. We need innovative
    support such as this, in order to keep up with the technology,
    train our teachers, and prepare our students.
        This is vision. Dr. Hackney has provided excellent guidance
    and good vision. I thank him, and wish him well.

                   public service and the temper of the times

        Senator Gorton. With that, Senator Bumpers, with all of
    your patience I will let you ask any questions that you have
    now.
        Senator Bumpers. Since I am the only one who has stayed
    with you?
        Senator Gorton. Yes. [Laughter.]
        Dr. Hackney. There is a metaphor there, I think.
    [Laughter.]
        Senator Bumpers. Dr. Hackney, first of all let me say that
    Mrs. Bumpers and I wish you and Lucy the very best in your
    future and to tell you that we are both deeply grieved, as I
    think most Members of Congress are, about your departure.
        Dr. Hackney. Thank you.
        Senator Bumpers. When I hear you and Jane Alexander deliver
    your opening statements this morning I am much encouraged,
    because I have become about as cynical as the rest of America
    on a lot of scores, and one is, of course, how increasingly
    difficult it is to get people to serve and to accept public
    service.
        I have done a little recruiting in my own party trying to
    find people to run, and we have been lucky to find a lot of
    really talented people, but I can tell you it is becoming
    increasingly difficult to get people to give up a reasonably
    good life with their families, good incomes and so on, and then
    come into such a hostile, meanspirited environment as this,
    where political differences are becoming criminal offenses. You
    touched on that to some extent in your opening statement, and I
    appreciated that very much.
        So under the most difficult circumstances you have done a
    remarkably fine job, and we are grateful to you for taking out
    the time in your life to accept this responsibility and do an
    outstanding job, as I see it, under very difficult
    circumstances, so we wish you the very best.
        Having said that, I have tried to plumb my own mind and try
    to figure out what is it about this Nation that must, indeed,
    be different? I am a student of American history, and yet I
    know there is much that I do not understand. I do not
    understand our culture now.
        I do not understand the hostility that people feel about
    everything, and I think that has been reduced somewhat by the
    fact that the economy is performing well, the crime rate is
    down--I think the economy plays a role in that. I hate to say
    this, but I think building prisons and locking up repeat
    offenders who have repeatedly shown that they cannot live in a
    free society has an impact.
        But I am not sure of the underlying causes of the crime,
    the sudden crime surge in this country, or the hostility and
    the meanspiritedness right here in Washington, right in the
    U.S. Congress and right in the U.S. Senate.
        The comity that existed when I came here does not exist any
    more. I was a trial lawyer, and people were always talking
    about how trial lawyers fight in the courtroom and then go out
    and have lunch together, and we did because we liked each other
    personally. It had nothing to do with the savage fight we had
    in the courtroom.
        But one of the reasons I am such a strong champion of the
    arts and humanities is because I think it plays a major role,
    and that is the reason I say if it can play a major role with
    such a small amount of money I can only guess what it would do
    if you were well-funded, and yet people--you know, we do things
    by exception around here, not the rule. Somebody can find
    Mapplethorpe or something like that and trade on it forever,
    which neglects the larger problem.
        You mentioned Tiger Woods, and I do not know, it might have
    been Charles Krauthammer in the Post the other day who was
    talking about Tiger Woods, and I agree with it. I think the
    phenomenon of Tiger Woods and the immense respect and
    admiration the American people have for him is not necessarily
    because he is African-American or Asian-American. I notice he
    used some term on the Oprah Winfrey show to cover Indians and
    everything else the other day.
        And it is not because he is a superlative golfer. My No. 1
    son, who is a golf junkie, told me a year ago that he would
    wind up being the greatest golfer in the history of this
    country.
        But you see, I still do not think that is America's
    fascination with him. I think it is his respectful attitude,
    that he speaks well, that he smiles easily, and you never see
    unbecoming conduct out of him, and when we think about him as
    an African-American or Asian-American, and you think about
    where did all this conduct in sports--when did it get so mean,
    and I do not know either.
        Ilie Nastase, Jimmy Connors, and John McEnroe were not my
    ideas of role models for this country, and they sort of made it
    acceptable to a very, what shall I say, very gullible young
    group of people in this country that it is OK to spit in the
    referee's face, the umpire's face. I will spit in his face the
    first time he crosses me. These people are role models.
        Tiger Woods understands that. I think he understands that.
    I think he is just a genuinely fine person.
        I heard one man interviewed saying I did not come to see
    him play golf. I just came because I enjoy his mannerisms and
    his conduct.
        Well, that is my lecture on incivility, which you already
    covered much more eloquently than I could.

                       summer seminars for schoolteachers

        But to go on to a more specific item, in 1988 or 1989 I
    read in Newsweek that the Carnegie Foundation was funding
    summer seminars for schoolteachers, not a math teacher to
    improve her math skills, but for teachers to learn something
    about Virgil's Aeneid, for example, because teachers, a lot of
    things fall off of teachers in the classroom other than math or
    history, whatever they are teaching, so this was the concept,
    and all of the six programs that they funded one summer were
    vastly oversubscribed.
        I thought it was a dynamite idea, because there is a simple
    principle that I adhere to and really strongly believe. That
    is, if our children are not learning it is because they are not
    being taught, and they are not going to learn as long as the
    same people who are not teaching continue not to teach.
        Now, I do not mean that to denigrate teachers. I married a
    fifth grade teacher, and so I get humility lessons every
    evening at my house on this subject. But anyway, I then began
    to try to get a bill passed to make this a giant program, as a
    part of the Department of Education in this country and got
    virtually nowhere with it.
        So since the National Endowment for the Humanities had a
    program similar to it, I then started trying to get that
    program funded at a higher level at NEH, without an awful lot
    of luck, and now my staff tells me in a memo I got this morning
    that the number of teachers who are qualifying for these summer
    seminars, and these are seminars of all kinds under NEH, has
    dropped by 50 percent. Is that due specifically to funding?
        Dr. Hackney. It is the funding level, yes.
        Senator Bumpers. Well, all I can say is, that is a mass
    tragedy. I think that program ought to be so big that any
    teacher in this country who wants to improve her skills even in
    her own discipline or something else ought to have the
    opportunity.
        The first one I saw was at the University of Texas. They
    had 244 slots, and they had 4,400 teachers apply for those 244
    slots. Do you still have that kind of response?
        Dr. Hackney. Oh, we do, yes. I think the summer seminars
    and summer institutes that we do are the very best things we
    do, the core of our programs. Seminars and Institutes, along
    with fellowships, are the two things that we do that really
    have to be done to keep the humanities alive, and they are a
    high priority for us. We protected those when our budget was
    cut. That close to 50-percent drop is occurring even though we
    have protected those two programs.
        Before 1996, before the cut, teachers who had been in an
    NEH seminar taught 500,000 students in the first year after
    their seminar experience. That is, 500,000 students every year
    were being taught by a teacher whose life had just been
    refreshed and whose enthusiasm for teaching had been renewed by
    this experience of studying for 6 weeks or 8 weeks on a college
    campus with a master of the subject.
        Our niche in this is content. It is high quality substance,
    and not pedagogy. These are all--the institutes are focused on
    curriculum and teaching materials, but the seminars, which are
    more numerous, are focused on the knowledge in that area.
        Teachers frankly do not get a chance to spend a lot of time
    thinking about or studying or reading during the year. They are
    so heavily worked in their high schools and in their colleges
    that they really need this period of being able to learn more
    and to refresh their knowledge and their enthusiasm.
        Senator Bumpers. How much money is in the summer seminar
    program?
        Dr. Hackney. That is a very good question. Let me fish that
    up quickly.
        It is about $5.7 million for seminars and institutes.
        Senator Bumpers. $9.7?
        Dr. Hackney. $5.7 million.
        Senator Bumpers. Well, that is a little more than it was--
    no, wait, it is less than it was about 3 years ago.
        Dr. Hackney. Yes.
        Senator Bumpers. I thought I finally got that up to around
    $9 million.
        Dr. Hackney. We are spending now about $10 million for
    education programs in total, and that is down considerably from
    what it was previously. At the fiscal year 1998 budget request
    level of $136 million, $8.5 million is allocated for seminars
    and institutes.
        That is all because of the cut that came in fiscal year
    1996.
        Senator Bumpers. What a tragedy. I tell you, maybe that is
    another reason people do not want to come here. Maybe I should
    not pursue that.
        I have always been a great student and devotee of the
    Constitution. I agree with Arthur Schlesinger, who says it was
    put together by the greatest assemblage of minds ever in the
    history of the world. I believe that.
        I voted for one constitutional amendment since I have been
    here, and I have voted against probably 40. I hope I have the
    courage to continue to vote against them, but I am always
    troubled by how little people understand constitutional
    Government and why we are a democracy, how we are free and that
    sort of thing, and yet in this body, in the U.S. Senate
    especially, every single problem that has any emotional or
    political appeal winds up being offered as a constitutional
    amendment.
        We have only had 11,500 constitutional amendment
    resolutions, and if you take the Bill of Rights out we have
    only adopted 17, so that speaks well for Congress and the
    people of this country.
        But you know, when I think about people who have never read
    ``The Federalist Papers,'' tinkering with the work of James
    Madison and Alexander Hamilton, it is so galling to me that I
    cannot tell you. It is not that the Constitution should not be
    amended, but we do not have an appreciation for it, and the
    reason we do not is because people are not being taught the
    value of it and what it means.
        And you touched on where we are, how we got here, and why
    there is this distrust and hostility toward each other. When
    you ask people, did you ever do this, did you ever do that,
    they do not know, I always tell Betty the reason they do not
    know is because nobody ever told them. That is the reason those
    summer seminars are so vitally important.
        But I am not going to pursue my sermon on the Constitution,
    but Sheldon, again, we appreciate the work you have done and
    wish you well.
        Dr. Hackney. Thank you very much.
        Senator Bumpers. Thank you, Mr. Chairman.

                          advice for next neh chairman

        Senator Gorton. Thank you, Senator Bumpers.
        Dr. Hackney, if your successor asks you for one single
    piece of advice, the most important single piece that you could
    give to him or her, what will it be? What will it be? Just one.
        Dr. Hackney. Only one. I can think of several, but I would
    say that the most important thing that my successor can do is
    to tell the story of the NEH.
        The NEH has a proud tradition 32 years long of doing good
    things for the American people. For most of those years we have
    simply assumed that because we got an annual appropriation that
    we did not need to be well-known, that we could continue to do
    the unglamorous but necessary work of keeping the culture alive
    and preserved, but it has been proven that that is not true.
        One of the things that I have been trying to do and that I
    think the humanities community in general has done a much
    better job of in the last 3 years is telling the story of the
    humanities and of the NEH to the public and to the Members of
    Congress. That is absolutely necessary in this society, so we
    need to continue to do that in dramatic ways.

                         maintaining a nonpartisan neh

        Senator Gorton. As you announced your resignation or your
    retirement from this position a number of people gave you
    credit for depoliticizing the National Endowment for the
    Humanities. At the same time, obviously one's views on the
    humanities and our history has a philosophical, a political
    philosophical context.
        Where does the balance lie in the National Endowment for
    the Humanities, that is quite broad in its charter, and the
    very real ideas that an administration that appoints it and for
    which it works has with respect to many of these ideas? How do
    you create that balance?
        Dr. Hackney. That is a really good question. There are
    senses that theorists would have that everything you do is
    ideological, because there is a sense in which it is connected
    to a view of the world and what is good and what is not good,
    but that is not what you were talking about nor what I am
    talking about.
        It is my firm belief that the NEH needs to be a domain
    clearly nonpartisan but also nonideological. It should be
    funding programs that are of very high quality and that contain
    ideas that need to be discussed by the American public. It
    needs to be balanced, in other words.
        We have a conscious rule in our public programs area that
    applies in other areas as well, which says that we do not fund
    programs that advocate a particular point of view, whose thrust
    is to convince an audience of a particular truth or a
    particular way of looking at a problem.
        Those programs must be balanced. If they are controversial
    they must contain all of the different points of view that
    pertain to that subject, and they should not be advocacy
    programs nor celebratory programs, frankly. They should be
    serious examinations of issues that are open to all of the
    points of view that are available, so I think the Endowment
    really does need to remain both nonpartisan and nonideological.

                             merging of neh and nea

        Senator Gorton. I must say, you seem to have done very well
    in creating that balance, and then following the rules that you
    outlined here, and you deserve congratulations for just that.
        Briefly, would you like to comment on the question that you
    heard me ask Ms. Alexander about the various proposals to
    combine or to consolidate the two Endowments?
        Dr. Hackney. Surely. The NEA and the NEH serve very
    different constituencies and audiences. We operate in different
    ways, and putting them together would be quite awkward, so I do
    not see that it is going to solve any problems.
        I agree with Ms. Alexander that we have been thinking about
    how we might combine support functions, for instance, and save
    money, but we have not been able to identify any significant
    savings that way.
        Frankly, I also would worry that in any combined agency--a
    cultural agency that funded both the arts and the humanities--
    that over time, even with good intentions, the humanities would
    drift toward the bottom of the priority list because we are
    inherently less glamorous. What we do is less visible. The
    people who do it are less visible. They are not celebrities, by
    and large. There is an occasional Doris Kearns  Goodwin who
    wrote the bestseller on the Roosevelt White House during World
    War II.
        Senator Gorton. You do not get quite as much ink as Ms.
    Alexander, do you?
        Dr. Hackney. Exactly right. Now, I am not sensitive on the
    subject. [Laughter.]
        She deserves it. This is not the first hearing in which
    everyone has left after she got up. [Laughter.]
        But I think that actually is inherent to areas of life. The
    arts are in part performances. They are individuals performing
    for a public. Entertainment is not a bad word, because
    entertainment makes you think and gives you a different view of
    life. It is very worthy material, but it is very different from
    what the humanities do.

           state humanities councils compared to state arts agencies

        Senator Gorton. I suppose is that not reflected in the
    rather different structure of States humanities councils and
    your relationship with them as against the arts? Is it not true
    that many or most of them are not official State agencies, even
    though some get support from the States?
        Dr. Hackney. Some get support. None of them is a State
    agency, though. They are all 501(c)(3) organizations, and I
    think the different levels of funding for the arts from the
    States as compared to what humanities organizations get from
    States is a measure of the different level of visibility and
    glamour.
        Senator Gorton. So in other words the State support for
    them is far lower than it is for the States arts councils?
        Dr. Hackney. Much lower, yes.
        Senator Gorton. Does that mean that your encouragement and
    the funding that you have is more significant or at least is
    very significant in preserving and enhancing those States
    humanities councils?
        Dr. Hackney. Oh, yes; I think so. One of the things I am
    most proud of in my tenure at the NEH has been that we have
    transformed the relationship between the State humanities
    councils and the NEH.
        Senator Gorton. Why don't you describe that for us?
        Dr. Hackney. Traditionally, our office that managed our
    relationship with the State humanities councils operated as if
    it were a grantmaking program. State councils applied to us for
    an annual grant. Even though there is a formula in our
    authorizing legislation that describes how much is to be
    distributed to the States and a formula for distributing it, we
    still behaved as if it were a grant, and there was an oversight
    function that was quite rigorous.
        As State humanities councils have matured over the last 20
    years--they started in the early 1970's--they have gotten quite
    significant. They do very good work, high quality work, and we
    have now begun to think of them as our frontline, if you will,
    our local affiliates, bringing the humanities in a different
    way to local populations.
        We have begun to divide up the territory a little bit, to
    divide the labor. We have also dramatically cut the size of our
    office and renamed it. It is now the Office of Federal/State
    Partnership. It is much smaller.
        It is not a grantmaking operation. We are in the midst now
    of redefining and redesigning with the State humanities
    councils the accrediting function, if you will, the oversight
    or quality control function. That will be very different from
    what we did before.
        The relationship is good. Communications are good. I am
    really pleased with it.

                  neh and american heritage rivers initiative

        Senator Gorton. On another subject, you may be involved in
    an area that can be highly controversial, and it may or may not
    have been without your conscious early participation.
        In his State of the Union Address President Clinton
    announced a new American heritage rivers initiative. The Chair
    of the Council on Environmental Quality talked about particular
    communities being targeted to receive Federal assistance and so
    on that would come from brownfields money, farm bill money, and
    the two national Endowments.
        I can tell you in many parts of the country, like mine,
    this kind of proposal creates a great deal of fear of another
    set of Federal agencies coming in to tell people how to live
    their lives. I hope that is not true, but can you tell me, were
    you part of the original planning? Are you a part of it now?
        Supposedly the various Federal agencies were to report back
    to the President within 90 days on more detailed plans. Can you
    tell me anything about those plans and your participation in
    them?
        Dr. Hackney. We were one of 25 Federal agencies that were
    invited to plan this project, which as I understand it is an
    effort to coordinate the various programs run by Federal
    agencies in designated areas. It has not been completely
    designated yet, so our participation, or our role here is
    simply to do what we normally do, but to communicate perhaps a
    bit more effectively with other Federal agencies so that our
    programs can mesh with theirs more.
        We support some projects that are particularly designed for
    river areas. One that I remember with great affection was
    actually supported by my predecessor but was very effective. It
    was called always a river.
        It was a grant to six State humanities councils to put a
    historical exhibit on a barge on the Ohio River and float it
    down--West Virginia, Ohio, Pennsylvania, Illinois, Indiana, and
    Kentucky were involved in this--the river, stopping, obviously,
    now and then, tying up to the local docks and inviting people
    from that community on to see a really exciting exhibit of the
    cultural history of that river area.
        Well, we support projects like that. We do those through
    our regular grant process and will continue to do them.
        Senator Gorton. Well, no one is going to be anything other
    than pleased at that kind of activity, but do you know anything
    at this point about the progress of this American heritage
    rivers initiative project?
        Dr. Hackney. I think it is going forward, and we are
    involved in the groups that come together to discuss it.
        I think the plans are to designate some of the areas within
    which coordination is to take place. It is coming soon. Let me
    turn to my deputy and see who has been represented.
        September 1 is apparently the date on which the first five
    river areas will be designated.
        I should say there are no new funds going to this program,
    as I understand it, certainly no new funds from us or, as I
    understand it, from the other Federal agencies.

                       national trust for the humanities

        Senator Gorton. Thank you. We will look forward to
    September 1.
        Tell me about the National Trust for the Humanities. Do you
    think that this will be a successful way of getting additional
    private sector funds, and what will its relationship be with
    NEH?
        Dr. Hackney. I do think it will be a significant factor in
    making our programs much more available to the public than now.
        The National Trust for the Humanities is a 501(c)(3)
    organization that is chartered here in the District. It is up,
    organized, and running now but does not yet have a staff. It
    already has raised a little modest money.
        Its directors are people interested in the humanities from
    around the country. We are not doing this. We are not directing
    it. It is an independent organization. It is one of the ways in
    which the humanities community must operate in a different mode
    in the future. It will be able to attract private funds and be
    the partner in any partnership that handles the money for
    programs.
        One can imagine the national trust raising funds that
    would, for instance, put in every high school in the country a
    collection of the films, the documentary films that NEH has
    made possible, or has funded over the years. Most of them,
    except for the Ken Burns films and other super successful ones,
    are now sitting on someone's shelf gathering dust, not doing
    anyone any good, when they are extraordinarily valuable as
    educational tools. We do not have the money now within our
    appropriation to give them away.
        One of the projects that I think the national trust might
    undertake is raising private funds either from corporations
    that might want to have their name attached to that sort of
    effort, or from a philanthropist or foundations to purchase and
    send packages of those films to schools throughout the country.
    In that way I think they can find new audiences, and extend the
    audience for work that we are already doing.
        It is important to realize, though, that if the national
    trust is wildly successful, in my view it will be raising $3,
    $4, $5 million within 5 years to sort of supplement the work of
    the NEH. It can never replace the funds that come from the
    Congress.

                         Additional committee questions

        Senator Gorton. Dr. Hackney, I want to thank you for your
    testimony. We have a number of other questions that we will
    submit to you in writing about specific programs, and would
    appreciate your answer to them.
        I think you have done great credit to the Endowment during
    very difficult times, and for, I believe, the entire
    subcommittee and, I hope, the Senate I want to thank you for
    your service. I realize it has a few more months left to go.
    You have been most eloquent, and I do look forward to reading
    your philosophical comments.
        Dr. Hackney. Thank you. I do want to say, Mr. Chairman, not
    only that I appreciate your support through the years here, but
    this service to me has been the most exciting and rewarding
    experience of my professional life, so I do not regret coming.
        Senator Gorton. That is wonderful. Thank you.
        [The following questions were not asked at the hearing, but
    were submitted to the Endowment for response subsequent to the
    hearing.]

                         Additional Committee Questions

                               budget priorities
        Question. $136 million has been requested by the President for NEH
    activities in fiscal year 1998. However, it is doubtful that the
    subcommittee will be able to provide the agency with an increase over
    the fiscal year 1997 budget. If this is the case, would you advocate
    that the appropriation of funds remain the same for the various budget
    lines for grant divisions, state programs and administration?
        Answer. Yes.
        Question. Or do you see a need to allocate the resources
    differently, and, if so, how and why?
        Answer. If the fiscal year 1997 appropriation is again $110
    million, the fiscal year 1996 breakdown is a good distribution of
    funding among our budget lines.
                       state humanities councils funding
        Question. All 56 state humanities councils are non-profit, private
    organizations, not state government agencies. However, according to
    information provided in the fiscal year 1998 budget request, almost
    half of state councils do receive some state support in addition to
    federal dollars.
        Does the National Endowment in any way provide a financial
    incentive for state governments to contribute to the work of the state
    councils?
        Answer. In addition to an outright grant--which by law comes with a
    50 percent cost-share requirement--NEH awards each of the councils
    supplementary matching funds for the purpose of leveraging non-federal,
    third-party contributions. Any funds that the councils receive from
    state governments can be used to satisfy the fund-raising requirement
    that these NEH matching grants entail. Thus, by contributing to the
    councils, state governments can help them leverage additional federal
    support.
        Question. Are state contributions, or the lack thereof, a
    determining factor in the apportionment of federal dollars to local
    humanities councils?
        Answer. No.
        Question. What factors can you point to that would explain why over
    one half of the state humanities councils do not receive state support?
    Why do you believe such a disparity exists between the state humanities
    councils, which receive approximately $4 million annually, and state
    arts agencies that receive an estimated $265 million yearly in state
    support?
        Answer. Historically, the arts councils have been state government
    agencies, while the state humanities councils have remained private,
    non-profit organizations. The arts councils have been the primary
    vehicle by which the states channel support to the arts. State
    governments have typically chosen to support the humanities councils on
    an ad hoc basis, through project grants and special appropriations. In
    recent years, the state councils' efforts to attract state government
    support have met with increasing success. Moreover, state support for
    the humanities is at least as great as what they provide for the arts.
    For example, total state support for public education at all levels now
    exceeds $150 billion annually, some not-inconsiderable part of which
    supports teaching and scholarship in history, literature, government,
    philosophy, and other humanities subjects and disciplines.
        The legislation that governs NEH support of the state humanities
    councils provides that state governments are to be given the option of
    either: (1) designating the existing private council as a state agency,
    then matching 50 percent of the federal minimum grant or 25 percent of
    the total federal outright grant, which ever is larger, and
    reconstituting the council membership with gubernatorial appointees; or
    (2) appointing six members to the existing private council, or a
    maximum of 25 percent of its membership. Each year, the Endowment
    informs each state governor of the state's option to convert the
    existing council into a state agency. To date, no state has chosen to
    designate a humanities agency, even though several now provide their
    council more than 50 percent of the Endowment's Federal/State
    Partnership grant.
        Question. Individual state humanities councils can fund no more
    than one-half the cost of any one project, with the remainder coming
    from local contributions. If the states were to receive a larger
    percentage of the total amount Congress appropriates to the NEH for all
    humanities programs, including state councils, what is the likelihood
    that local resources could be raised to meet the necessary increased
    matches? At what point, because of limited local funds, will federal
    support fail to be a catalyst for raising matching funds?
        Answer. The state councils and the organizations and individuals
    they support can match the outright grant funds awarded through the
    Federal/State Partnership with either cash or in-kind contributions. In
    addition to third-party contributions, costs incurred by the project
    sponsors themselves are counted toward this matching requirement. In
    recent years, the imputed value of all cash and in-kind contributions
    to the state councils and the recipients of their project support has
    exceeded the required 50 percent cost-share by approximately $18
    million.
        The state councils are not unique in this respect; all NEH grantees
    contribute a share toward the costs of their project that, on average,
    amounts to $1.30 for each federal dollar of their grant. The potential
    contributor response to additional federal funding for the humanities
    is very large in all areas that the Endowment supports. But, the funds
    now provided through the Federal/State Partnership are sufficient to
    permit the councils to support more than half of the funding proposals
    they receive, while NEH must turn away five of six of its grant
    applicants.
                              office of enterprise
        Question. This office was formed in recent years to extend and
    expand the Endowment's assets and to facilitate its work in a more
    entrepreneurial manner. It has been given responsibility for seeking
    new financial resources, as well as sponsoring all projects that cross
    over divisional lines within the agency.
        Can you tell us how successful this office has been in
    accomplishing its mission to date? What strides have been made since
    its creation and how is its work stretching available federal dollars?
        Answer. The Enterprise Office, in its first full year of operation,
    has been highly successful. The Enterprise Office developed two major
    financial partnerships--one with the Mellon Foundation and one with the
    MCI Foundation. Combining $1.25 million of NEH funding for each of two
    years with $2.5 million of Mellon Foundation support for each of two
    years will enable nine research centers throughout the country to
    support a significant number of fellowships. Funding for research
    centers and fellowships was cut sharply as a result of the budget
    reductions in fiscal year 1996, and this renewed commitment will help
    to continue the critical work of research to create new knowledge in
    the humanities.
        Under the auspices of the Enterprise Office, the MCI Foundation and
    NEH formed a partnership to create EdSiteMent, a new website designed
    to help teachers, parents, and students find the best education
    websites on the Internet. MCI's commitment of $500,000 to this project
    represents the first corporate partnership for NEH, and we expect to
    build upon that success in coming years.
        In addition, the Enterprise Office has worked with other NEH
    divisions to extend the reach of Endowment projects. This includes
    creating new exhibit space in the Old Post Office Pavilion to showcase
    previously funded NEH exhibits to the more than 3.5 million people who
    visit the building each year. In addition, the Enterprise Office has
    provided a modest amount of funding to enable these exhibits to travel
    to places in the country where the exhibits have not previously been
    seen. Plans are underway to extend this initiative to major NEH-funded
    exhibits so that more Americans will have access to the rich historical
    information embodied in these exhibits.
        Finally, the Enterprise Office has provided support for major
    proposals coming to NEH that do not fit neatly into one particular
    division, but that would make a major contribution to the advancement
    of the humanities. This includes the Disaster Recovery Kit, a kit
    designed to provide critical information to museums, libraries, and
    educational institutions about the steps that need to be taken
    immediately to preserve books and other important cultural materials in
    the wake of natural disasters like floods, fires, and hurricanes.
        Question. Are new collaborative efforts with partners such as the
    Mellon Foundation and MCI the result of efforts by this office? Please
    describe these cooperative arrangements in greater detail for the
    subcommittee.
        Answer. The partnerships formed with Mellon and MCI were the result
    of a collaborative effort between Enterprise and another NEH division.
    The Mellon partnership began with discussions between the NEH Chairman
    and the director of NEH's Division of Research and Education about what
    could be done to support critical research in the wake of the 60
    percent reduction in research funding as a result of the fiscal year
    1996 budget cuts. Mellon was encouraged to make a major financial
    commitment with the assurance that NEH would also make a commitment to
    support research centers. NEH funds are provided directly to research
    centers as are Mellon funds.
        The MCI project began with an inquiry from MCI to Enterprise about
    how we might combine the technological expertise of MCI with the
    education expertise at NEH to improve education in the classroom. As a
    result of these discussions, NEH put together a proposal for
    EdSiteMent, a new Website to identify the best education websites on
    the Internet. The MCI's commitment of $500,000 is being used to support
    the new website, create teacher guides for use in the classroom, and
    for partnership efforts with schools to incorporate EdSiteMent into the
    classroom. As part of its contribution to the partnership, NEH used its
    rigorous peer panel review system to evaluate the quality of websites
    and make recommendations for inclusion on EdSiteMent.
         Question. How much of the $12,416,000 appropriated to the Division
    of Public Programs and Enterprise in fiscal year 1997 is designated or
    anticipated to be used specifically for Office of Enterprise
    activities?
        Answer. Including the $1.25 million commitment to the Mellon
    Foundation partnership, the fiscal year 1997 budget for the Enterprise
    Office is $2.138 million.
                            humanities in education
        Question. Traditionally, the humanities have been considered part
    of a core educational curriculum for students. Do you believe this is
    still the case or has there been a decline of interest in studying the
    humanities today? How does NEH attempt to convey to students the
    relevance of a liberal arts education in an increasingly technology-
    oriented world? Is there greater emphasis now on vocational or pre-
    professional degrees than in the past?
        Answer. The data we have--both empirical and anecdotal--indicate
    that interest in the humanities among college students is on the rise
    after a long period of decline. The number of bachelor's degrees
    conferred in humanities disciplines has rebounded sharply from the low
    levels seen in the 1970's and 1980's. A similar resurgence of interest
    is being seen in the nation's graduate schools, where the number of
    students pursuing advanced degrees in the humanities has been moving
    upward since the late eighties. Some of the new interest may have been
    fueled by an expansion of general education (or ``core'') requirements
    by a significant number of American institutions of higher education.
    More often than not, general education includes a healthy dose of
    humanities subjects.
        Through our programs and through our rhetoric, we attempt to convey
    to students the importance of sustained, thoughtful study of the
    humanities. Such study is the foundation for understanding important
    contemporary issues as well as enduring questions of human existence.
    The humanities raise issues that are central to life in a democratic
    society and provide resources for engaging issues with intelligence and
    wisdom. Quite simply, our message is this: While vocational,
    technological, and pre-professional education help prepare students for
    their first jobs, a humanities-centered education prepares students for
    a lifetime of many different jobs.
        Question. Alternatively, turning to the other side of the desk,
    what progress has the Endowment made in fostering the development of
    better teachers, as well as attracting qualified, committed candidates
    to this important profession?
        Answer. Over the course of its history, one of the primary missions
    of the National Endowment for the Humanities has been to help school
    and college teachers in the United States improve their teaching of the
    humanities. Particularly noteworthy are the grants the Endowment makes
    annually in its summer seminars and institutes program, the country's
    leading faculty development program in the humanities, which are
    designed to provide school teachers and college faculty members with
    opportunities to study fundamental texts and significant topics in the
    humanities. Each year, the hundreds of humanities teachers who attend
    NEH-sponsored seminars and institutes return to their home institutions
    intellectually revitalized and thus more effective instructors of the
    tens of thousands of students who fill their classrooms.
        NEH humanities education grants are not designed, per se, to
    attract new teachers to the humanities. We suspect, however, that there
    may be instances where a student becomes interested in pursuing a
    teaching career in the humanities as a result of having been exposed to
    an instructor whose teaching had been reinvigorated after attending an
    NEH seminar or institute.
        Question. What, if any, role does the U.S. Department of Education
    assume in serving to encourage and enhance instruction in the
    humanities in our schools? How much do their funding and programs
    complement the kinds of work you support for teachers and students?
        Answer. The Department of Education provides support for humanities
    instruction in two main areas: ``Goals 2000,'' which encourages efforts
    at the state and local level to establish high academic standards in
    the core academic subjects (the humanities among them); and the
    Eisenhower Professional Development Program, which assists state and
    local education agencies with efforts to enhance the professional
    development of teachers.
        NEH's education programs complement but do not overlap with those
    of the Department of Education (ED). We provide a modest amount of
    support for materials and curriculum development in humanities subjects
    (for which there is no ED analog), and we support the professional
    development of humanities teachers by providing them with opportunities
    to engage in intensive summer study of important texts and topics in
    the humanities. Although at first glance it might appear that there is
    substantial overlap between the two agencies' teacher training
    programs, they are in fact quite distinct. The Department's Eisenhower
    program differs from NEH's offerings in two key respects:
        (1) Eisenhower is for the most part a formula-grant program that
    permits significant flexibility among states and localities in the
    design and execution of teacher training programs. What this means in
    practice is that professional development opportunities are relatively
    short in duration (often a week or less) and focused on pedagogical
    rather than substantive concerns. NEH's seminars and institutes, on the
    other hand, offer teachers in-depth study opportunities lasting four to
    six weeks. Such programs are led by many of the nation's top scholars
    and are focused on content rather than pedagogy.
        (2) Although the Eisenhower program nominally targets all core
    subject areas, the program's funding mechanism in fact favors math and
    science education. Eisenhower's enabling legislation includes a trigger
    mechanism that has the effect of reserving the first $250,000,000 of
    the annual appropriation for math and science training. For fiscal year
    1997, this has meant that a relatively small sum remains for all other
    subjects. Conversely, all NEH funding is reserved for professional
    development in humanities subjects.
                      teaching with technology initiative
        Question. The initial funding proposal for this three-year
    initiative was $4 million in the fiscal year 1996 budget request.
    Congress was unable to fund this increase, but the initiative moved
    forward without the requested dollars. Was the program scaled back from
    the original plans when funds were not appropriated, or was the $4
    million found from among NEH's existing programs? What other programs
    were reduced in order to advance this effort? What accomplishments can
    you point to?
        Answer. The fiscal year 1996 NEH budget submission to Congress
    included a request of $4 million in funding for a ``Technology and the
    Humanities'' special initiative. The purpose of this special request
    was to enhance the Endowment's ability to make humanities resources and
    programs more available and accessible on the developing digital
    information superhighway; the initiative was also designed to include
    all of the agency's major program areas--preservation, education,
    research, and public programming. However, when Congress ended up
    slashing NEH's budget by 36 percent below fiscal year 1995, it
    effectively cut off any possibility of fully implementing the agency-
    wide ``Technology and the Humanities'' initiative.
        The Endowment was intent on trying to salvage at least one
    component of the initiative, albeit with considerably scaled down
    funding, and in fiscal year 1996 we announced that we would support
    ``Teaching with Technology'' projects within our humanities education
    grant programs. At the first ``Teaching with Technology'' grant
    deadline, we received more than 300 proposals but were limited, because
    of severe budget constraints, to making only 12 awards despite the fact
    that the overall quality of the proposals was so high that we could
    easily have funded four times this number. Included among these first
    grants were such ``accomplishments'' as a project at Northwestern
    University to develop and deploy a database on the Internet on the
    history of the U.S. Supreme Court, a project at Miami University in
    Ohio that is helping teachers of Latin use electronic resources in
    their classrooms, and a project at the University of Virginia involving
    the use of CD-ROM's and the Internet to teach the history of the
    American Civil War.
                              follow-up initiative
        Question. The Teaching with Technology initiative has led to the
    development of another new three-year initiative that will be offered
    by NEH. This project will help schools and their teachers become
    competent and comfortable with newly developed electronic materials and
    the technologies with which to teach with them. Specifically what will
    this training program do and how much will it cost? To what degree do
    you anticipate that the emphasis will necessarily be on familiarizing
    teachers with basic computer technology? How will you assure that the
    humanities receives an appropriate focus in this initiative?
        Answer. The aim of the Endowment's follow-up to the Teaching with
    Technology initiative--``Schools for a New Millennium''--will be to
    jump start the process by which schools and their teachers become
    competent, and comfortable, with new humanities materials and
    technologies. The extent to which schools and teachers are proficient
    in using electronic materials and formats will directly affect the
    level of student learning and achievement. Projects to be supported
    under this new initiative would: involve a whole school and require
    commitments from teachers, the principal, and the Parent-Teacher
    Association; leverage public-private funding partnerships and establish
    links with parents, local colleges, and universities; focus on
    challenging substantive questions in the humanities that could be
    addressed by the use of rigorous interactive educational software;
    support hands-on training for a school's teachers and provide enough
    time to develop both confidence with the technology and the materials
    and to create challenging and engaging classroom uses that would enrich
    the school's curriculum; and exploit the potential of the Internet not
    only to link participants in a single project but also to trigger rapid
    fire, nationwide dissemination and participation. At the Endowment's
    $136 million fiscal year 1998 request level, we estimate that about $2
    million would be set aside for these types of technology projects.
        While the thrust of these projects will be to help teachers and
    schools integrate rich, high quality humanities materials in digital
    formats into their classrooms, we anticipate that some projects also
    may also involve some effort to developing some teachers' computer
    skills. We are confident, however, that ``the humanities'' will be the
    focus of the initiative: Because the Endowment requires all applicants
    to describe in detail the humanities content and significance of their
    projects in their grant applications, projects that are not thoroughly
    grounded in the humanities would not, and could not, receive support
    from NEH.
        Question. Is there any broad-based effort that NEH is aware of to
    assist teachers who are less skilled technologically than the students
    they teach? Is this a widespread problem?
        Answer. We are only aware of one such effort: the 21st Century
    Teachers initiative, which is part of President Clinton's Call to
    Action for American Education in the 21st Century. Under this
    initiative, the National School Boards Association, the National PTA,
    the National Education Association, the American Federation of
    Teachers, and many other business and professional organizations are
    recruiting thousands of teacher volunteers, each of whom will work to
    improve his or her own understanding of education technology and will
    then share his or her expertise with at least five colleagues in the
    coming school year.
        Providing state-of-the-art technological training for teachers
    remains a significant challenge for the nation. A recent survey found
    that only thirteen percent of public schools required that teachers be
    trained in advanced telecommunications. And although thirty-one percent
    of schools reported that incentives were provided to encourage teachers
    to obtain such training, another fifty-one percent indicated that it
    was left up to teachers to initiate participation in this kind of
    training.
        Question. Approximately one-half of our public schools have
    computer access, according to a recent estimate, with many more to be
    added in the near future. For those students who have computer
    availability, a wide array of information is readily available. In the
    meantime, is the student population without access to computer
    technology being left at a significant disadvantage academically? Is
    this an area of concern? Or, in the case of humanities studies, are
    traditional methods equally effective in teaching students?
        Answer. With technological change occurring at such a rapid pace,
    and with schools being wired and equipped at an equally vigorous rate,
    it is difficult to know for how long any one population of students
    will be disadvantaged by lack of access to a particular kind of
    technology. For the humanities, however, these issues are secondary--
    technology will always be a handmaiden to content. The thoughtful
    teaching of significant texts will remain students' primary access to
    the humanities' enduring themes.
                            american legacy editions
        Question. Among the special initiatives included in the budget
    request is the American Legacy Editions, a special competition designed
    to help complete more than fifty ongoing scholarly editions of the
    collected writings of U.S. presidents and other major American
    historical and literary figures. The Editions projects have been a core
    part of NEH programs since the Endowment was created. How does this
    initiative differ from the traditional program?
        Answer. The American Legacy Editions initiative is intended to give
    a chance of survival and completion to a number of scholarly editions
    projects, the dismantling of which for lack of money would constitute a
    national tragedy. These include documentary editions of the papers of
    U.S. presidents, as well as prominent writers and others who influenced
    the course of our history or the content of our culture. Due to
    insufficient funds, it now appears likely that the Endowment this year
    will turn down a number of major editing projects that have been funded
    for many years. Moreover, to stretch our scarce funding as far as
    possible, of the editions projects we will be able to support, we have
    to cut project budgets sharply, to the bone in some cases.
        The initiative would provide approximately double the amount of
    funding we are now able to devote to these projects plus set up
    innovative financial arrangements to get more bang for our buck: i.e.,
    by making extensive use of offers of matching funds, by building in
    incentives for technological innovation and speedy progress, and by
    providing flexible financial arrangements such as depletable
    endowments, NEH hopes to make possible an alternative to the shameful
    cultural tragedy that now looms.
        Question. The Division of Research and Education, through which
    this initiative would be funded, is proposed to receive a $9 million
    increase in fiscal year 1998. Current funding for the editions program
    is approximately $1.5 million. Is a portion of the requested increase
    targeted for the American Legacy Editions and, if so, how much?
        Answer. About $3.5 million would be set aside for ALE projects
    within the Endowment's fiscal year 1998 request of $136 million.
        Question. How much support would it require to get these projects
    on sound financial footing? Without an increase for the editions
    project in fiscal year 1998, what can be accomplished? Can the program
    survive as it is currently defined and at current funding levels?
        Answer. If the initiative were continued at the proposed requested
    funding level for the next ten years, we estimate that all current
    projects could achieve sound financial footing that would significantly
    reduce their need for continued NEH support.
        The initiative is tied to the Endowment's $136 million request
    level. If the Endowment's budget were held at the current $110 million
    level or at an amount that is significantly lower than $136 million, we
    would only be able to provide grants to a small fraction of these
    projects. Because most projects rely on continued NEH support, many of
    those that do not receive grants may be forced to curtail their
    operations dramatically or to close down their projects entirely.
        An alternate funding strategy NEH might adopt would be equally
    untenable: that is, to provide only nominal funding to keep as many
    projects as possible alive. This approach would mean that many American
    Legacy Editions would have to cut back on their work, which would
    significantly slow the completion of their projects.
        Question. Have other financial resources in addition to the
    Endowment traditionally been available to support the program and could
    greater responsibility for program funding be sought there?
        Answer. Another traditional source of funding for these projects
    has been through the National Historical Publications and Records
    Commission (NHPRC) at the National Archives. Like NEH, however, NHPRC's
    budget is limited and the program must support other worthy activities
    and projects in addition to scholarly editions.
                                cultural tourism
        Question. Cultural tourism has been promoted as a means to provide
    opportunities for the traveler to experience and learn about the
    history, culture and the people that give a place its distinctive
    character. Both the Arts and Humanities Endowments, as well as the
    Institute of Museum Services, have demonstrated interest in promoting
    this effort.
        NEH has committed staff and invested $50,000 in a broad-based
    national initiative that is meant to foster cultural heritage tourism
    partnerships throughout the United States. Would you please describe
    for the subcommittee the specifics of this program. How does it work
    and what do you hope to achieve? How do you believe this program will
    help to advance the humanities? Do you intend to commit additional
    funds to this initiative in the future?
        Answer. Since September 1994, an informal interagency working
    group, composed of staff members from NEH, NEA, the President's
    Committee on the Arts and the Humanities, and the Institute of Museum
    and Library Services, has been exploring means by which cultural
    organizations might assume a more active and visible presence in the
    nation's travel and tourism industry. Particular emphasis has been
    placed on identifying an appropriate role for the federal cultural
    agencies in this effort. It is our hope that by involving such agencies
    in the work of the cultural tourism industry, the arts and humanities
    can become a central and meaningful part of many travelers'
    experiences.
        This effort got underway in earnest in the spring of 1995, when
    more than thirty humanities, arts, and historic preservation
    organizations joined with the agencies to plan for a visible presence
    of cultural tourism at the White House Conference on Travel and Tourism
    that was to take place later that year. This alliance helped develop
    and distribute a position paper on cultural tourism for the conference,
    arranged for Garrison Keillor to speak at one of the main conference
    luncheons, and planned ``Culture and Commerce: Partners in Tourism,'' a
    cultural tourism ``debriefing'' held following the conference.
        Largely as a result of the interagency group's efforts, the final
    report from the White House conference included as its fourth
    objective, ``to preserve our natural historic and cultural resources
    for future generations ... through a national strategy for fostering
    environmental and cultural travel and tourism.'' The report also
    recommended the convening of ``Natural and Cultural Regional Summits''
    to identify policy and management strategies to meet the unique needs
    of each region of the country.
        Stemming from the recommendations of this report, and with support
    provided by the cooperating federal agencies and by interested parties
    at the national and local levels, a series of regional forums have been
    conducted at sites across the country. More than sixty organizations
    and government entities have contributed funds in support of these
    meetings, ranging from Ford Motor Company to the Western Museum
    Association. To date the forums have drawn approximately 1,000
    participants, whose work has led to the development of specific action
    plans to advance cultural heritage tourism in nearly every state.
        At this point the Endowment has committed no further funding to the
    cultural tourism effort, as the initiative has now acquired a momentum
    of its own. We remain ready, however, to provide encouragement and
    guidance to groups agents who seek to extend the reach of cultural
    tourism.
        Question. According to your brochure on the economic impact of NEH,
    the U.S. travel market is experiencing a dramatic growth in cultural
    tourism, fueled in part by the Endowment. Is the travel market itself
    contributing to these projects? Are state and local governments?
        Answer. As mentioned in the answer to the previous question, a
    variety of public and private entities are contributing to the cultural
    tourism initiative. The regional summits, for example, drew substantial
    support from corporations (among them BellSouth, Ford Motor Company,
    and Ameritech), state and local tourism offices (including Maryland,
    Indiana, Colorado, Texas, and Wyoming), cultural organizations (among
    them the Historic Landmarks Foundation and the Colorado Historical
    Society), and the travel industry itself (United Airlines and Travel
    and Leisure magazine, for example).
                           other special initiatives
        Question. A good number of special initiatives are listed
    throughout the 1998 budget request. Given the decline in available
    dollars, how does the Endowment attempt to strike a balance between
    crucial support for continuing core programs and new special
    initiatives? What can be achieved by diverting funds to a special
    initiative that can not be achieved through the usual grant channels?
        Answer. Considering the current budgetary climate, it is indeed
    difficult to strike a balance between funding core programs and
    launching new initiatives. Yet despite our funding situation, the
    Endowment is determined to remain a vital national proponent and leader
    in the humanities and to continue searching actively for ways we can
    better serve the American people. The various special initiatives and
    program emphases detailed in the fiscal year 1998 budget request are
    designed to address specific needs and new opportunities in the
    humanities.
                            preservation and access
        Question. The Division of Preservation and Access was provided with
    a funding level of $18,000,000 in fiscal year 1997. Among the functions
    for which this division has responsibility is a significant effort to
    preserve brittle books, archival collections, newspapers, and the like,
    as well as to fund projects that provide the tools for increased access
    to the humanities--the creation of dictionaries, atlases,
    encyclopedias, and other reference works, as well as digitization
    programs.
        The effort to microfilm brittle books and the U.S. newspaper
    microfilm program are both significant undertakings of this division.
    Approximately how much of the total $18,000,000 appropriation for this
    division is dedicated to these projects?
        Answer. The Preservation and Access division supports a variety of
    projects that are designed to help address the preservation problem in
    the United States. Because of variations in the sizes and grant periods
    of these different kinds of projects, the proportion of the division's
    funding that is obligated for them tends to fluctuate from year to
    year. Funding for projects to microfilm brittle books and U.S.
    newspapers, for example, typically accounts for about 35 percent of the
    division's funds, but in fiscal year 1997, these projects will receive
    about 21 percent of the Preservation and Access budget.
        Question. Are significant inroads being made with this preservation
    work?
        Answer. Yes. Over the years, NEH grants have helped preserve on
    microfilm more than 750,000 of the projected 3 million important
    brittle books that are targeted for preservation in American libraries
    and archives. Substantial progress has also been made in the nationwide
    effort lead by NEH to identify, catalog, and microfilm historically
    significant American newspapers: records for approximately 127,500
    newspaper titles are now available in a national data base accessible
    through computer terminals at more than 22,600 institutions in the U.S.
    and abroad, and 55 million newspaper pages have been microfilmed that
    would otherwise have been lost to future generations.
        Question. Do the state councils place an emphasis on preservation
    at the local level or is it more of a national effort?
        Answer. No, the state humanities councils are concerned primarily
    with public programming in the humanities in their states; they do not
    support nationally significant preservation projects like those funded
    through NEH. In fact, the Endowment is the acknowledged leader in
    national effort to preserve deteriorating books, documents,
    periodicals, artifacts, and other materials that collectively make up
    an essential part of our country's cultural inheritance. Only a truly
    national entity like NEH can provide the coordinated leadership and the
    level of funding that are needed to ensure that historically
    significant materials are identified and preserved and that there is no
    wasteful duplication of effort, which would occur if a more
    decentralized mechanism were used.
        Question. Approximately one-fourth of the funds for this division
    are dedicated to the National Heritage Preservation Program, which
    facilitates the preservation of material culture objects. Given the
    broad range of important activities that comprise this division, this
    appears to be a significant funding emphasis. Is the interest expressed
    by applicants for this program larger than other program categories in
    the division?
        Answer. Applicant interest in the NHP program is strong but not
    necessarily larger that other preservation activities. We believe,
    however, that the proposed distribution of funds among all the division
    efforts is the best use of the limited funding available.
        Question. What types of awards are made to preserve material
    objects? Do you provide funds to preserve or restore the objects
    themselves or the environment in which they exist?
        Answer. Through the National Heritage Preservation program, the
    Endowment helps support the efforts of American museums, archives,
    libraries, and other repositories to stabilize material culture
    collections that are important to the humanities. This support may
    include improvements in the housing and storage of the collection; the
    improvement of environmental conditions; and the installation of
    security, lighting, and fire-prevention systems. Under this program,
    NEH does not support the restoration or preservation of the objects
    themselves.
        Question. ``Slow Fires: On the Preservation of the Human Record''
    is a documentary film, made with NEH assistance, that focuses on the
    crisis of preservation. Its purpose is to help raise nonfederal support
    for substantial costs involved in preserving endangered materials.
    According to the budget presentation, this film has been viewed by a
    large audience both here and abroad. Please describe what, if any,
    impact the film has had on fund raising efforts in this area, to date.
    In your experience, is the private sector a generous supporter of
    preservation work, or is this an activity where federal funding is more
    critical than some others?
        Answer. While we cannot document a direct cause and effect
    relationship between ``Slow Fires'' and ``fund raising efforts,'' there
    can be no question that a consequence of increasing public awareness of
    the preservation crisis is to encourage greater support for
    preservation.
        The Endowment itself has played a direct role in stimulating
    nonfederal funding for preservation, though. Since the establishment of
    NEH's Office of Preservation in 1986, projects supported by the
    Endowment have leveraged over $10.9 million in gifts from private
    donors and foundations. Moreover, the division's grants in the last
    three years generated cost-sharing from grantees totalling $41.6
    million. Essentially, however, through NEH the federal government is
    providing vital funding and national leadership in an area where
    private sector or other nonfederal support is limited.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd

                                 budget request
        Question. The fiscal year 1998 budget request is almost 24 percent
    above the fiscal year 1997 allocation. Given the current budgetary
    climate, how did the Administration determine that $136 million was an
    appropriate funding level for NEH?
        Answer. The NEH budget request for fiscal year 1998 is a modest but
    forward-looking budget that would permit us to regain about half of the
    ground we lost in fiscal year 1996 due to Congress's massive 36 percent
    reduction in our funding. A budget of $136 million is a reasonable
    amount of public funds to invest in humanities activities that will
    yield both immediate and long-term returns to the nation. The request
    acknowledges the extraordinary pressures the federal government faces
    in trying to balance the goal of reducing the financial burden on
    taxpayers with the necessity of maintaining an adequate level of
    services for the American people. With this budget, we signal our
    commitment to make sacrifices to help control the overall level of
    federal spending. At the same time, it is also a budget that would not
    undermine our fundamental ability and obligation to carry out our
    legislated mission to advance the humanities in the United States.
        Question. What does the 24-percent increase buy for the American
    people?
        Answer. Compared to NEH's current funding of $110 million, a budget
    of $136 million in fiscal year 1998 would enable the Endowment to help
    advance the nation's educational and cultural life by supporting
    several special initiatives and by increasing the number of high
    quality projects that we are able to fund. Specifically, funding at the
    fiscal year 1998 request level would improve humanities education for
    America's students, help teachers make better use of new information
    technologies in their classrooms, preserve documents and other
    materials vital to the nation's cultural heritage, foster basic
    research and scholarship that expand our knowledge and understanding of
    the humanities, provide opportunities for Americans to engage in a
    lifetime of learning in the humanities, and increase third-party
    support for humanities projects and institutions.
        Question. What would be your programmatic priorities at the
    increased funding level?
        Answer. At the request level, our priorities are to try to regain
    some buying power in our core programs, which were cut substantially in
    fiscal year 1996, and to proceed with the special program initiatives
    and emphases we describe in our budget submission, such as American
    Legacy Editions, Teaching with Technology, ``My History is America's
    History,'' and special support for small public libraries in the
    Challenge Grants program.
        Question. Would your priorities remain the same if funding were to
    be decreased?
        Answer. Yes, we would try to follow-through with our programming
    priorities even if our budget request were not forthcoming. If that
    were the case, however, we would need to reassess our programming in
    light of available resources and the tenets that guided our
    restructuring efforts in fiscal year 1996. That is, out of any future
    appropriated sum we will first try to ensure adequate support for those
    activities that are best done at the national level, have long-term
    impact, have few other sources of support, strengthen the institutional
    base of the humanities, and reach broad sectors of the American public.
        Much would depend on the magnitude of the reduction. For example,
    Challenge Grants awarded in prior years would need to be matched during
    fiscal year 1998 as grantees raise the required gift funds; but at some
    level of budget reduction we would probably cease awarding any new
    challenge awards. Because the state councils depend on the federal
    government for the greater part of their operating support, we have
    tried to cushion the effect of NEH budget cuts on these unique
    organizations. But funding for the Federal/State Partnership has
    already risen from a little over 20 percent of the Endowment's budget
    to over 30 percent. Further cuts would undoubtedly require
    progressively steeper reductions in the councils' funding if the
    Endowment is to continue the national programs that support such
    important activities as humanities research, the preservation of
    brittle books, teacher seminars and institutes, and major documentary
    films for television.
        Question. Please describe any long term investments or new
    initiatives that are currently being developed. What effect would new
    initiatives have on existing grantees if funding is not increased?
        Answer. As described in our official fiscal year 1998 appropriation
    submission, special features and initiative of the NEH budget request
    include:
      --Continuation of the agency's Teaching with Technology special
            initiative that is helping teachers incorporate new information
            technologies such as CD-ROMs and the Internet into their
            classrooms. The fiscal year 1998 request would also enable NEH
            to build on the successes of this initiative by putting in
            place a new multi-year special effort to help schools prepare
            to take better advantage of the new electronic materials and
            technologies.
      --Support for other technology projects that will help to speed the
            inclusion of humanities materials onto the new information
            superhighway and provide wider access to these materials for
            all Americans.
      --A new American Legacy Editions special initiative to help ensure
            the continuation of projects that are compiling documentary
            editions of the papers and writings of U.S. Presidents and
            other important literary and historical figures;
      --A new special initiative, which we are calling My History is
            America's History, that will encourage Americans to learn more
            about the history of their families and to relate this history
            to the broad sweep of events and trends in American and world
            history;
      --Fiscal year 1998 will mark the third year of the agency's three-
            year cooperative partnership with the Andrew W. Mellon
            Foundation to bolster funding for fellowship programs sponsored
            by independent centers for advanced study in the humanities;
            and
      --Special challenge grants for public libraries, particularly those
            that are located in rural areas and inner cities, that will
            help these institutions build endowments to strengthen their
            humanities programming.
        As noted in the answer to the previous question, if our budget is
    not increased in fiscal year 1998, we would try to implement as many of
    our planned initiatives as possible while still maintaining support for
    our core program activities.
                 government performance and results act (gpra)
        Question. Please describe your progress and milestones toward
    preparing a strategic plan, including consultation with interested
    parties.
        Answer. The first draft of NEH's strategic plan was prepared almost
    two years ago. Through an iterative process of review and revision, new
    drafts have been developed in the succeeding months. At various stages
    these drafts have been circulated to the Office of Management and
    Budget, to NEH's National Council on the Humanities, and to more than
    100 of the agency's ``stakeholders.''
        The latest draft of NEH's strategic plan was recently submitted to
    our Congressional oversight committees for their review and comment.
    Feedback we receive from this stage of the process will inform the
    final submission that is due to Congress in September of this year.
        Question. Given the current budgetary climate, how are you
    addressing funding and authorization issues in the development of GPRA
    goals and the strategic plan?
        Answer. Since the Endowment's restructuring in 1995, the agency's
    budget has remained relatively steady at approximately $110 million.
    Early indications are that this level of appropriations will again hold
    for the coming fiscal year, so we have tailored our GPRA goals and
    objectives to fit this new reality. Should funding or authorization
    developments warrant a different course of action on the part of the
    agency, we will amend our five-year strategic plan accordingly.
        Question. How will the NEH measure the short-term and long-term
    impact of its programs?
        Answer. We are in the process of developing performance goals and
    indicators for all of our funding programs. The goals will articulate
    what we hope to achieve through our programs, and the indicators will
    then describe the measures we will take to determine whether or not we
    are actually achieving our goals. In developing our indicators we will
    be looking for ways to determine whether or not our programs are
    accomplishing their intended purposes (i.e., we will be assessing
    short-term program outcomes), and we will also seek to develop measures
    of the indirect effects or consequences of our funded work (a longer-
    term assessment of program impact).
        Question. What are the grant-making priorities for the agency in
    the next year, for the next 5 years?
        Answer. In addition to our ongoing programmatic priorities, we will
    feature the following special emphases in the coming year:
      --The beginning of a multi-year special effort to help schools
            prepare to take better advantage of the new electronic
            materials and technologies.
      --Support for other technology projects that will help to speed the
            inclusion of humanities materials onto the new information
            superhighway and provide wider access to these materials for
            all Americans.
      --A new American Legacy Editions special initiative to help ensure
            the continuation of projects that are compiling documentary
            editions of the papers and writings of U.S. Presidents and
            other important literary and historical figures.
      --A new special initiative, which we are calling My History is
            America's History, that will encourage Americans to learn more
            about the history of their families and to relate this history
            to the broad sweep of events and trends in American and world
            history.
        Over the next five years, NEH's grant-making priorities will focus
    on: preserving and increasing the availability of cultural and
    intellectual resources essential to the people of the United States;
    strengthening teaching and learning in the humanities in schools and
    colleges across the nation; facilitating basic research and original
    scholarship in the humanities; providing opportunities for Americans to
    engage in lifelong learning in the humanities; strengthening the
    institutional base of the humanities; maintaining and strengthening
    partnerships with the state humanities councils; establishing
    collaborative partnerships with public and private institutions and
    organizations in support of the humanities; and creating new programs
    and initiatives that respond to emerging needs and opportunities in
    American society.
        Question. What are the organizational priorities for the agency for
    the next year, for the next 5 years?
        Answer. The Endowment is aggressively supporting the National
    Performance Review goal of creating a government that works better and
    costs less. In furtherance of this goal, the agency will focus on the
    following priorities in the coming years: the installation of a
    relational data base capable of systematically capturing and reporting
    on a variety of agency records; the continued refinement of NEH's
    customer service standards, with the ultimate goal of weaving these
    standards into the fabric of the agency's daily work; standardizing and
    clarifying the agency's application guidelines to make them more
    ``user-friendly'' to prospective applicants; streamlining the review
    process for proposals submitted to the Endowment; and developing better
    systems for monitoring the performance of the agency's funding
    programs.
                                  grant-making
        Question. Within the request, grant program funding increases by
    over 26 percent over fiscal year 1997. Yet at the same time the FTE/
    staffing level remains constant. Will you have enough staff to enable
    the Endowment to award all of the funds in a timely manner?
        Answer. Our FTE level of 170 should provide enough staffing support
    to administer increased grant funds at the fiscal year 1999 funding
    level. In fiscal year 1995 we reduced the number of divisions that
    administer grant programs from 6 to 3, which provided the most
    effective and efficient organization possible. There is enough
    flexibility within that structure to process a range of applications;
    thus applications processed within the increased fiscal year 1999
    funding request can be accommodated effectively using our existing
    staff.
        Also, some of the fiscal year 1999 increase is for the Federal/
    State Partnership program, which should not require any additional
    staff effort because those funds are distributed on a formula basis,
    without the need for additional panel reviews.
        Question. The budget request includes an increase of nearly 100
    percent for the Research and Education sub-category of Education
    Development and Demonstration. Please describe how this increase will
    be used and what the impact will be.
        Answer. The funding increase we are requesting for the Research and
    Education division for fiscal year 1998 must be placed in proper
    context. That is, when Congress radically reduced the NEH budget in
    fiscal year 1996, the program activities represented by this division
    were devastated: funding dropped precipitously from $51.324 million in
    fiscal year 1995 to the current fiscal year 1997 funding level of
    $21.584 million. In fact, this division came into existence as a result
    of the reorganization of the Endowment that the budget reductions
    necessitated: In fiscal year 1996, the agency restructured three major
    program divisions with 24 discrete grant programs into one new Research
    and Education division containing only four grant programs.
        The fiscal year 1998 funding request for the Research and Education
    division is needed to breathe some life back into these two key
    components of the Endowment's mission--that is, support for scholarly
    research and education in the humanities. The Research and Education
    division is also the home of two major special program initiatives the
    agency is proposing at our fiscal year 1998 request level of $136
    million: the American Legacy Editions initiative, which will help
    ensure the continuation of projects that are compiling documentary
    editions of the papers and writings of U.S. presidents and other
    important literary and historical figures and NEH's ``Schools for a New
    Millennium'' special program emphasis, which will extend the
    Endowment's recent efforts and successes in helping teachers and
    schools incorporate new information technologies involving the
    humanities into the nation's classrooms. The funding increase requested
    for Research and Education for fiscal year 1998 would enable the
    Endowment to implement fully these initiatives, which are addressing
    important needs in the humanities.
        Question. The Special Projects sub-category of Public and
    Enterprise grants is proposed to increase by nearly 350 percent. Please
    describe how these funds will be used and what the impact will be.
        Answer. The Special Projects category is designed to support
    activities that encompass a variety of formats and venues not readily
    accommodated within the guidelines of other programs in the Public
    Programs and Enterprise division. In fiscal year 1996, Special Programs
    awarded 2 grants under its regular guidelines and 9 grants as part of a
    special competition related to the Endowment's national conversation on
    American Pluralism and Identity. The national conversation initiative
    concluded in fiscal year 1996, though projects that address the themes
    of the initiative will continue to be eligible for support throughout
    the Endowment's regular programs. With the funds we are requesting for
    fiscal year 1998, we would expect to award 9 grants under the regular
    Special Projects guidelines.
        Question. In fiscal year 1996 the Endowment realigned its grant
    programs from 31 to 9. Describe the manner in which the new categories
    meet the needs of the Endowment, the applicants, the grantees, and the
    humanities community.
        Answer. In order to adjust to an fiscal year 1996 budget reduction
    of 36 percent, we reinvented the Endowment as a leaner, more focused,
    and flexible agency. Getting smaller was certainly not our idea, but
    getting sleeker was. Our efforts are now more explicitly directed to
    those activities that are best done at the national level, that have
    long-term impact, that have few other sources of support, and that
    strengthen the institutional base of the humanities. Within a greatly
    simplified organizational structure, NEH staff increasingly work
    collaboratively, often forming ad hoc project teams. Much as they may
    be dismayed by the magnitude of the reductions in funding available to
    the Endowment for awarding grants, members of the humanities community
    have generally responded favorably to our new, consolidated structure,
    typically finding it is less confusing and more amenable to ``one-stop
    shopping.'' Finally, we have accelerated implementation of computer and
    communications technologies that are making information much more
    accessible to applicants, grantees, and the public.
        Question. What changes do you anticipate making in the grant
    guidelines before the next round of funding?
        Answer. We are now in the process of streamlining and standardizing
    all of our programs' application guidelines. We are developing standard
    language for those sections of our guidelines that are common to all
    programs, and we are establishing a common structure for all guidelines
    booklets. In these ways we hope to make the process of applying for NEH
    support even simpler.
        Question. Please describe the peer-review process used to evaluate
    applications for funding.
        Answer. While ``peer review'' is the most important component of
    NEH's multi-tiered review system, it is neither the only nor the final
    determinant of an application's status. Except in the case of Challenge
    Grants and grants awarded by Federal/State Partnership, the Endowment
    makes awards for specific projects in the humanities. To apply, an
    individual or organization submits a proposal for a project to one of
    the Endowment's funding categories. A final decision on the proposal is
    normally made about eight months after the application deadline.
        Each grant application to the Endowment is evaluated by
    knowledgeable persons outside the agency who are asked for their
    judgments about the quality and significance of the proposed project.
    Hundreds of scholars, humanities professionals, and other experts
    annually serve on NEH ad hoc panels, which are convened throughout the
    course of the year. Panelists represent a diversity of disciplinary,
    institutional, regional, and cultural backgrounds. In some programs,
    the judgment of panelists is supplemented by individual reviews
    solicited from specialists who have extensive knowledge of the specific
    subject area or technical aspects of the application under review.
        The advice of evaluators is assembled by the staff of the Endowment
    who comment on matters of fact or on significant issues that might
    otherwise be missing from the review. These materials are then
    presented for consideration to the 26-member National Council on the
    Humanities, which meets three times each year to advise the Chairman of
    the agency. The NEH Chairman takes into account the advice provided by
    this review process and, by law, makes the final decision about
    funding.
        It is the highest priority of NEH to provide sufficient funds to
    operate an effective review system. Our overriding goal is to ensure
    that the projects that ultimately receive federal support will be those
    that are judged to be most likely to make significant contributions to
    the humanities.
        Question. When Challenge Grant monies are used to create or augment
    endowments, how much of the federal funds are permitted to be used for
    administrative costs of operating the endowments?
        Answer. Up to 10 percent of the federal award may be applied toward
    fund-raising costs specifically related to the purposes to be endowed
    by the grant.
        Question. Has the NEH sought a federal endowment for itself?
        Answer. NEH does not have legislative authority to solicit and
    invest private contributions, which would be a pre-requisite to
    establishing a true ``federal endowment.'' A bill recently introduced
    by the Senate Labor and Human Resources Committee, S. 1020, would
    provide such authority. We believe that the humanities would benefit
    greatly were we to receive this authority. As we have proven with our
    extensive track record in securing private support for our funded
    projects, NEH is capable of leveraging a significant amount of
    nonfederal funds for humanities activities. We would mention, however,
    that a huge amount of capital would need to be invested in an endowment
    over a significant period of time before NEH would be able to support
    the level of humanities projects and activities that it now provides
    with annual appropriations from Congress.
        Question. What kind of technical assistance does the Endowment
    provide to institutions and individuals in the area of business
    planning and grant-application preparation?
        Answer. NEH challenge grants are designed to strengthen the
    management of humanities institutions as well as their finances and
    facilities. As part of their application for a challenge grant,
    institutions must draft a plan for the long-range future of their
    humanities programs in light of the history, objectives, and
    anticipated financial resources of their organization. Then, to meet
    the Endowment's demanding matching offer, challenge grant recipients
    typically augment their professional fund-raising capabilities, in some
    cases developing such resources for the first time.
        Applicants to any of the Endowment's programs may take advantage of
    several kinds of assistance in the preparation of their funding
    proposal. Prior to submitting a proposal, prospective applicants are
    invited to get in touch with an NEH program officer in the relevant
    program (by letter, phone, or e-mail) to discuss their project. At this
    stage, NEH staff routinely offer suggestions on how to prepare a
    competitive funding proposal. Applicants may also submit a preliminary
    proposal for staff comment in advance of the competition deadline.
    Every year, NEH staff hold public, grant-preparation workshops in
    various parts of the country, usually in conjunction with a project
    site visit. Finally, applicants who are unsuccessful in a particular
    competitive round may request a synopsis of the review panelists'
    comments on their proposal, which they may revise and resubmit at the
    next application deadline--and to a newly constituted review panel--
    without prejudice to their chances of getting a grant.
                 leveraging federal funds with matching grants
        Question. Describe the matching requirements for recipients of NEH
    grants.
        Answer. Conventional ``matching grants'' are awarded in most
    programs of the Endowment to support discrete humanities projects
    approved through the normal competitive process. The recipient of a
    matching grant, usually an institution of sufficient scale and
    administrative sophistication to undertake fund-raising, is offered a
    federal award conditioned upon attracting an equivalent amount of
    third-party, cash contributions from non-federal sources. An offer of
    matching funds may comprise the entire amount of the Endowment's grant,
    but more often it is combined with an outright award that enables the
    project to proceed while fund-raising is getting underway. In fiscal
    year 1996, the Endowment awarded $10.3 million in matching grants.
        Challenge grants are awarded in the program of that name to
    underwrite long-term institutional needs such as endowment building.
    First-time challenge grant recipients must raise $3 in cash
    contributions for each federal dollar of their award, and recipients of
    a subsequent challenge grant must raise $4. In fiscal year 1998, the
    Endowment will offer a special challenge grant initiative for public
    libraries that will require only $2 of fund-raising for each federal
    dollar. In fiscal year 1996, the Endowment awarded $9.9 million in
    challenge grants, leveraging approximately $35 million in non-federal
    contributions.
        In addition, most NEH project grants awarded to institutions entail
    substantial cost-sharing in the form of contributions of cash or in-
    kind services. Even individual grant recipients, such a NEH fellows,
    often receive supplementary support from their home institution. In a
    typical year, project cost-sharing by grant recipients--in addition to
    matching--averages--about 95 cents for each federal $1 we award.
        Question. Are the matching requirements a challenge for applicants
    to meet?
        Answer. Matching awards have proven to be a very effective way to
    leverage non-federal contributions for the humanities. In the 20 years
    of existence, the Challenge Grants program has generated over $1.15
    billion in contributions. Only 2.5 percent of the challenge grant
    funding on offers during that time has been forfeited for lack of fund-
    raising success. Since NEH was founded, matching grants for humanities
    projects have stimulated an additional $333 million in third-party
    support. Approximately three quarters of these grants that conclude
    within a given year are completely successful in that they leverage the
    entire amount of federal funds offered. Project matching awards are
    usually offered in conjunction with an outright grant and, to some
    extent, constitute a source of supplementary funding. Nevertheless,
    well under 10 percent of the recipients of these grants fail to raise
    at least enough contributions to claim some portion of their matching
    award.
        The high success rate of both challenge grants and project matching
    grants owes a great deal to the selectivity of the Endowment's award
    process. A feasible fund-raising plan is an essential part of a
    successful application for a challenge grant, and the Endowment does
    not incorporate a matching requirement in a project grant unless our
    staff are satisfied that the grant recipient will have a high
    probability of funding-raising success. It is important to realize that
    most NEH grants do not entail a third-party matching requirement, even
    if they do usually require cost sharing by the recipient institution.
    In fiscal year 1996, just 22 percent of the Endowment's grant
    obligations were for matching. In fiscal year 1998, we hope to extend
    the challenge grant concept to a category of institutions for whom a
    3:1 or 4:1 funding-raising requirement might be an insurmountable
    hurdle; the Endowment will offer public libraries a chance to receive
    one federal dollar for each two contributor dollars.
        The recent budget cuts are having an adverse effect on the success
    rate of NEH matching grants, however. In order to allocate the
    Endowment's scarce funds for matching in a way that is efficient and
    fair, we have had to deny most requests for an extension of the grant
    period stipulated for fund-raising. Some institutional recipients of a
    matching grant that in the past might have had better success with more
    time must now abandon their fund-raising campaign at a point short of
    completion.
        Question. Do the matching requirements limit the number of
    applicants?
        Answer. Matching is a requirement only in the Challenge Grants
    program. Certainly the matching required by a challenge grant,
    ordinarily three or four contributor dollars for each federal dollar,
    does limit the number of applicants. Some institutions that do valuable
    work in the humanities lack the scale, administrative sophistication,
    or contributor base to conduct the kind of fund-raising campaign a
    challenge would require. In fiscal year 1988, we hope to reach some of
    these institutions with a challenge grant initiative for public
    libraries that will require only $2 in contributions for each $1 in
    federal support. A matching requirement is not imposed on the recipient
    of a project grant unless NEH staff are satisfied that the institution
    is likely to be a successful fund-raiser; and, even then, our matching
    offer is usually accompanied by an award of outright funding.
        Question. Must the grantees be able to prove/show in the
    applications that there is a high likelihood of raising the matching
    funds needed to secure a grant?
        Answer. Applicants proposing large projects are encouraged to
    request at least partial matching support and to specify potential
    donors in their application submission to the Endowment. The
    feasibility of an applicant institution's fund-raising plan is an
    essential criterion in the review of a proposal for a challenge grant.
        Question. How do the applicants for grants show the Endowment they
    can provide the matching funds required?
        Answer. Most NEH project grants do not entail a matching
    requirement. Institutions proposing large and costly projects are
    expected to discuss fund-raising possibilities in their application
    submission, however. Applicants for a challenge grant are expected to
    address such issues as the long-term financial stability of the
    institution; the feasibility of their fund-raising plan; and the
    adequacy of staff and other administrative resources to conduct a fund-
    raising campaign.
                       funding sources other than federal
        Question. Does the NEH receive funding for grant-making from
    private sources?
        Answer. The Endowment's Office of Enterprise was established
    expressly for the purpose of forging partnerships with outside funders.
    For example, NEH and the Andrew W. Mellon Foundation are collaborating
    on a three-year, joint-funding effort to ensure that the nation's
    centers for advanced study in the humanities can continue to support
    scholarship at an adequate level; and the Endowment, MCI corporation,
    and the Council of the Great City Schools are collaborating on the
    development of EDSITEment, a ``one-stop-shopping'' gateway to
    educational content on the internet. Neither of these partnerships will
    entail using private contributions for making grants, however. NEH and
    its private partners will be working in parallel.
        Every year, NEH matching and challenge grants help humanities
    institutions leverage private sources of support. These contributions
    go directly to the grantee institutions, not to the Endowment. The only
    recent instance when an outside funder provided private monies for
    making NEH grants was the DeWitt-Wallace Readers Digest Foundation's
    five-year, $2.5 million participation in the Endowment's Teacher-
    Scholar program.
        Question. How much did the NEH receive in donations in fiscal year
    1996; what is the estimate for fiscal year 1997 and fiscal year 1998?
        Answer. The Endowment received nearly $99 thousand in donations in
    fiscal year 1996. We estimate donations of $100 thousand in fiscal year
    1997 and in fiscal year 1998.
        (These donations are in addition to the funds generated by our
    Challenge Grants program and by our matching program for humanities
    projects. In fiscal year 1996, these two efforts raised almost $46
    million.)
        Question. Does the Endowment anticipate seeking authority to
    solicit and invest private funds?
        Answer. As noted in an answer to a previous question, the Senate
    Labor and Human Resources Committee has introduced a bill, S. 1020,
    that would provide ``solicit and invest'' authority for NEH.
        Question. What changes in legislative authority would be needed to
    permit the Endowment to solicit and invest private funds?
        Answer. Basically, NEH needs to have express authority to raise and
    invest nonfederal funds for endowment-building purposes and to use any
    income that would accrue from this endowment to support projects and
    programs in the humanities.
        Question. What dollar amount of private, state, and/or local funds
    was used to meet the matching requirements for NEH grants? How do these
    matching funds compare with total funding available for the humanities?
    How does the amount of federal investment in the humanities compare
    with the total annual investment made in the humanities by all sources
    in the United States?
        Answer. In fiscal year 1996, NEH matching requirements leveraged
    approximately $46 million in nonfederal funds. In addition, we estimate
    that cost-sharing requirements on NEH grants generated another $90
    million in nonfederal support. The sum--$136 million--appears to be
    significantly greater than the amount available for the humanities from
    all other sources. In 1994 (the most recent year for which data are
    available), private foundations contributed $35 million to the
    humanities, representing less than one percent of all of their giving
    that year. Although similar figures for corporate and individual giving
    are not available, we know from previous research that neither sector
    has a strong track record in giving to the humanities.
        In sum, NEH grants, together with the nonfederal funding leveraged
    by those grants, represent a significant share of all funding available
    for the humanities. As the president of one major foundation once said,
    ``NEH is by far the most important external source of funding for the
    humanities in the United States. It is no exaggeration to say that the
    decisions made concerning the budget for the NEH ... have an absolutely
    decisive impact on the health and character of the humanities in
    America.''
                        partnerships and administration
        Question. Describe the support that the NEH provides to the
    Institute for Museum and Library Services.
        Answer. An interagency agreement between NEH and IMLS authorizes
    the Endowment to provide to IMLS certain administrative services. Using
    its own staff and resources, NEH provides specific accounting, audit,
    automatic data processing, budget, equal employment opportunity, legal,
    administrative, and personnel services. This method of providing
    services is far less expensive than it would otherwise be for a small
    agency like IMLS to create additional staffing, space, and equipment to
    perform the same services in-house.
        Under the terms of the interagency agreement between the two
    agencies, IMLS reimburses NEH for the actual cost of services provided.
        Question. Describe NEH efforts to leverage federal funds through
    partnerships with other federal agencies.
        Answer. In recent years the Endowment has entered into partnerships
    with a variety of federal agencies [in pursuit of common goals?]:
      --In 1996 and again in 1997, NEH joined with the Voice of America to
            support a national essay contest on themes related to NEH's
            National Conversation initiative.
      --Last year we entered into a short-term working agreement with the
            Library of Congress to share our expertise on the design and
            execution of peer-reviewed grant competitions.
      --We have recently joined forces with the Federal Emergency
            Management Agency to produce a Disaster Recovery Kit, which is
            designed to provide cultural institutions with guidance on the
            preservation of cultural materials that are susceptible to
            damage as a result of floods, fires, hurricanes, and other
            natural disasters.
      --For the past twenty years NEH has been joining with other federal
            agencies to support a number of national data collection
            projects. Among the projects NEH has funded in this way are the
            Survey of Earned Doctorates, the National Museum Survey, and
            the National Study of Postsecondary Faculty.
        Although not all of these projects involve the leveraging of
    additional funds, each represents a concerted effort to advance common
    goals through mutually beneficial partnership arrangements. In this way
    the reach of federal dollars is greatly extended.
        Question. Does the NEH coordinate its materials preservation
    training with other federal agencies engaged in similar work? Briefly,
    please describe any interagency training efforts.
        Answer. We are not aware of any other preservation education and
    training programs similar to the type NEH supports. Indeed, the
    Endowment's support for these activities is intended to address clear
    needs in the preservation field that are not being met by other federal
    agencies. In addition, NEH is also unique in providing support to
    regional field service organizations around the country that offer a
    rich array of preservation educational training services and
    information to libraries, museums, and other humanities-oriented
    institutions in their respective areas.
        Question. Please describe the Endowment's efforts to generate non-
    federal support for preservation activities for endangered materials.
        Answer. The Endowment has played a direct role in stimulating
    nonfederal funding for preservation. Since the establishment of NEH's
    Office of Preservation in 1986, projects supported by the Endowment
    have leveraged over $10.9 million in gifts from private donors and
    foundations. Moreover, the division's grants in the last three years
    generated cost-sharing from grantees totalling $41.6 million.
    Essentially, however, through NEH the federal government is providing
    vital funding and national leadership in an area where private sector
    or other nonfederal support is limited.
        Question. Do you anticipate starting any new interagency efforts in
    fiscal year 1998?
        Answer. One of the key objectives of the Endowment is to forge new
    partnerships with public and private institutions in support of the
    humanities. We do not now, however, have any specific plans to develop
    new collaborations with other agencies of the federal government in
    fiscal year 1998.
        Question. How has the fiscal year 1996 reduction in staffing and
    reorganization from 6 programming divisions to 3 affected the daily
    operations of the NEH?
        Answer. With dramatically fewer internal administrative divisions,
    NEH staff are now routinely working collaboratively, often in ad hoc
    project teams. We believe our new structure is helping us make the most
    efficient and creative use of our drastically reduced resources for
    making grants.
        Question. What lessons have you learned from this streamlining?
        Answer. We have learned to be more collaborative, innovative, and
    flexible. These changes in our procedures and habits of mind probably
    outweigh the changes in our administrative structure.
        Question. Do you have further plans to fine-tune the NEH in terms
    of organizational structure?
        Answer. We are conducting a strategic planning exercise in
    conjunction with our implementation of the Government Performance and
    Results Act (GPRA). All aspects of the Endowment's operations are being
    review exhaustively. However, at present we have no immediate plans to
    alter our current structure.
        Question. Does the NEH seek to learn from and offer insights to
    executives and staff of other endowment and philanthropic organizations
    in the form of details and exchanges?
        Answer. For many years the Endowment took advantage of personnel
    exchange opportunities made possible under the Intergovernmental
    Personnel Act. Under the IPA we were able to bring the fresh
    perspectives of outsiders to the work of the agency, while also
    permitting other organizations to benefit from the Washington-based
    knowledge of our NEH employees. In recent years we were also able to
    make several of our best employees available to the National
    Performance Review for its government-wide review of agency functions
    and operations. In the wake of the significant down-sizing of the
    agency in 1995, however, we have not had the resources necessary to
    continue such exchanges and details.
                              internet and the neh
        Question. How does the NEH benefit from its relationship with the
    Institute of Museum and Library Services? Does this IMLS support
    include a transfer of knowledge of internet programming and access to
    the NEH?
        Answer. Actually, according to a long-standing arrangement, NEH
    provides certain computer and internet services to IMLS. More
    importantly, the programs of NEH and IMLS complement each other in many
    ways, including their use of the new communications technologies to
    make the resources of libraries and museums more accessible to the
    public. For example, IMLS makes grants to state library agencies to
    support the acquisition of computer systems and telecommunications
    technologies, the development of electronic linkages among libraries
    and other cultural institutions, and the provision of information
    services to underserved communities. All of these activities help NEH
    reach a wider and more diverse audience with the education software,
    digitized archival collections, and virtual museum sites on the
    Internet whose development our grants have sponsored.
        Question. What do you see as the future of the humanities on the
    internet?
        Answer. We recently released a special report, NEH in the Digital
    Age, that describes in considerable detail the role we envision for the
    new information technologies in fostering scholarship and learning in
    the humanities.
        The Endowment has joined a public-private partnership with MCI
    Communications Corp. and the Council of Great City Schools to create
    ``EDSITEment,'' a new website that, when it premiers in September 1997,
    will provide one-stop shopping for teachers, students, and parents who
    are searching for high quality humanities resources on the Internet.
    MCI has pledged $500,000 toward the EDSITEment, which will offer the
    best humanities education websites to anyone with internet access. In
    addition, the project will target special programs to 800 high schools
    in 23 Great City School cities, where teachers will receive additional
    help in integrating the resources on EDSITEment into their classroom
    instruction.
        The Endowment has completed the second year of a three-year
    Teaching With Technology initiative designed to support the development
    and implementation in humanities education of a wide array of
    innovative technological applications, including digital audio, video
    and imaging, hypertext and hypermedia, video-conferencing, speech
    processing, and Internet sites. In the first round of grants awarded
    last year, for example:
      --Northwestern University received $185,000 for a multimedia
            relational database on the history of the United States Supreme
            Court. Recently made available on the World Wide Web, ``Oyez,
            Oyez, Oyez'' enables students anywhere to access summary and
            full-text versions of the Court's most significant cases, an
            audio archive of oral arguments in 500 Court cases, audio and
            video materials about all justices since 1920, and much else.
      --The University of Virginia received $215,000 to develop CD-ROM and
            Internet versions of ``In the Valley of the Shadow,'' an
            interactive program that enables students to learn about the
            lives of ordinary people during the Civil War. An extensive
            archive of documents--including newspapers, photographs, census
            and tax records, letters, diaries, photographs, and music--will
            enable students to research daily life during the Civil War in
            two Shenandoah Valley counties located on either side of Mason-
            Dixon Line.
      --Tufts University received $215,000 to develop a digital library on
            ancient Roman culture that will be available both on CD-ROM and
            on the World Wide Web. High school Latin students and
            undergraduates will be able to access texts of all major Roman
            authors up through the death of Augustus either in the original
            or in translation, as well as a virtual museum of maps and
            objects.
        In fiscal year 1998, the Endowment will launch a successor
    initiative to Teaching with Technology. Called ``Schools for a New
    Millennium,'' it will support efforts to help humanities teachers
    become proficient in the use of the new electronic materials and
    formats.
        The Endowment has long been at the forefront of the national effort
    to bring humanities scholarship into the digital age, sponsoring, among
    other things, the development of technical standards for digitally
    encoding texts and the conversion of invaluable research resources into
    digital form accessible on CD-ROM's and the Internet. For example, NEH
    support helped launch the University of California's monumental
    Thesaurus Linguae Graecea project, which has produced a CD-ROM that
    contains the entire extant corpus of ancient Greek texts. Through the
    use of infrared scanning technology, the Ancient Biblical Manuscript
    Center in Claremont, California, is creating digitized images of the
    Dead Sea Scrolls. Because of this NEH-sponsored project, these rarest
    and fragilest of texts will soon be accessible to scholars world-wide
    via CD-ROM and the Internet. Another project recently funded by the
    Endowment is creating a complete facsimile edition of the legal papers
    of Abraham Lincoln on CD-ROM.
        Increasingly, NEH-sponsored programs for the general public are
    reaching bigger audiences in a more engaging and accessible way through
    the use of such rapidly evolving technological innovations as virtual
    museums on the Internet, interactive computer displays, CD-ROM's, and
    videodisks. The Denver Public Library, with NEH support, has digitized
    35,000 photographs from its Western American Collection. This unique
    photo archive is currently accessible on computer workstations at the
    library; but it will one day be available to the whole nation, and to
    world, via the Internet. The Montana Community Foundation recently
    received an NEH grant to plan development of a multimedia CD-ROM on the
    Lewis and Clark expedition. Intended for use either by individuals or
    by museums and libraries, ``Discovering Lewis and Clark'' will
    incorporate selections from The Journals of Lewis and Clark, moving
    pictures, topographical animations, and audio material.
        Question. Are any funds in the Department of Education used for
    this purpose?
        Answer. The Department of Education supports some activities that
    are complimentary to what NEH is doing.
        The Department's Technology Literacy Challenge Fund (fiscal year
    1997, $200 million), which provides formula grants to state education
    agencies, and Technology Innovation Challenge Grants (fiscal year 1997,
    $75 million), which provide matching grants to locally based public-
    private consortia, both support the acquisition of computers and
    telecommunications technologies and the development of technology-based
    curricula. In one such example, the Technology Innovation Challenge
    Grants program has already helped an urban school system on the Great
    Plains to connect its classrooms via the Internet to major museums
    across the country and to develop networked learning content that
    integrates the arts with core subjects including, history, mathematics,
    science, reading, and writing. A variety of other Department of
    Education programs are also contributing to the technology challenge
    grant initiative, including Title I of the Improving America's Schools
    Act, the Eisenhower Professional Development Program, School-to-Work
    Opportunities, Star Schools, the Regional Technology for Education
    Consortia, and the Regional Educational Laboratories.
        Question. Is the internet used by the NEH or its grantees as a way
    to reach underserved communities?
        Answer. Communities that are separated by location or economics
    from the nation's educational and research resources and its cultural
    amenities probably stand to gain the most from the encyclopedic,
    distance-annihilating potential of the Internet. For example,
    ``EDSITEment'', which the Endowment is developing in a partnership with
    MCI, will make the latest and best in history, literature, and foreign
    language sites available to any school, parent, or student with access
    to an Internet connection. MCI is helping to connect 800 schools in 23
    cities as part of this project. In fiscal year 1998, our ``NEH
    Cyberschools'' program will help humanities teachers become proficient
    in the use of the new electronic materials and formats. This initiative
    is explicitly designed to exploit the potential of the Internet not
    only to link participating teachers in a single project but also to
    trigger rapid fire, nationwide dissemination and participation.
                                  initiatives
        Question. Describe the My History is America's History project and
    the projected impact it will have in terms of numbers of participants.
        Answer. NEH is planning an initiative that will encourage Americans
    of all ages to explore their family history and its relationship to the
    larger pattern of community life, migration, settlement, and
    interaction that together make up the nation's history. The role NEH
    will play in this initiative is a new one. Under the auspices of the
    Endowment's Enterprise Office, we will act primarily as a broker of
    partnerships among public and private entities to achieve shared goals
    rather than as a funder of individual projects. Our plans are to join
    with historical societies, archives, libraries, genealogical societies,
    and other repositories of historical information to create national
    Partnerships for America's Story. At a minimum, we would expect to
    contribute $200,000 toward a total project cost of at least $1 million.
    At the same time, we will continue to support humanities research,
    scholarship, education, and public programs on American history through
    our regular grant programs.
        The dimensions of this effort are potentially very large. For
    example, we plan to publish and distribute a family history ``kit''
    along the lines of our National Conversation Kit, which reached nearly
    10,000 community-based organizations. We will know more about the
    likely audience impact of this effort when we have assembled a roster
    of participating organizations and funders.
        Question. Within the funding category of Research and Education,
    you have proposed increasing the funding for American Legacy Editions
    by greater than double its current level of funding. What are some of
    the projects planned for this increase in funding? Are there enough
    projects in the pipeline that all of the funds would be able to be used
    in fiscal year 1998?
        Answer. The American Legacy Editions initiative is designed to
    ensure the survival of some of the most important projects now being
    conducted across the country that are preserving and making available
    cultural and intellectual resources essential to the people of the
    United States. Among the projects that would be included under the
    American Legacy Editionsrubric are: the papers and writings of several
    U.S. presidents, including Washington, Jefferson, Madison, Grant, and
    Eisenhower, as well as the papers and writings of other important
    figures in American history, including Franklin, Twain, Thoreau,
    Elizabeth Cady Stanton and Susan B. Anthony, and Martin Luther King,
    Jr. Other significant documentary editions that would fall within the
    initiative's scope include documents on the ratification of the U.S.
    Constitution and the Bill of Rights, the records of the First Federal
    Congress, the journals of the Lewis and Clark expedition, and documents
    relating to the history of emancipation. Considering that there are
    approximately 50 ongoing documentary editing projects that the
    Endowment has supported in recent years, which would make up the corpus
    of American Legacy Editions, there are indeed enough projects ``in the
    pipeline'' to use all of the funding requested for this initiative in
    fiscal year 1998.
        Question. Is the Teaching with Technology program coordinated with
    the Department of Education?
        Answer. Because NEH's Teaching with Technology program--which
    provides grants for discrete, content-rich projects that help teachers
    use new electronic technologies to enhance students' understanding of
    the humanities--is distinct from the types of education programs
    supported by the Department of Education, there is really no need to
    ``coordinate'' the program with DOE. Staff at NEH and DOE do, however,
    often exchange information about various programs and projects, which
    helps to insure that there is no duplication of effort in the federal
    government's humanities education programming.
        Question. How will the report on A National Conversation on
    American Pluralism and Identity be made available to the public?
        Answer. The report on the National Conversation--One America,
    Indivisible--was published in July and is available from NEH free of
    charge. News of the report's publication was circulated widely, ranging
    from the Chairman's nationally broadcast speech at the National Press
    Club to a feature on the NEH website. Interested listeners and readers
    are invited to call, write, or e-mail their requests for complimentary
    copies.

                              subcommittee recess

        Senator Gorton. The subcommittee will stand in recess until
    9 a.m., Thursday, May 1, when we will receive testimony on the
    fiscal year 1998 budget from the Secretary of the Interior,
    Hon. Bruce Babbitt.
        [Whereupon, at 11:20 a.m., Thursday, April 24, the
    subcommittee was recessed, to reconvene at 9 a.m., Thursday,
    May 1.]

      DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 1998

                                  ----------

                             TUESDAY, MAY 20, 1997

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 9:02 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Slade Gorton (chairman) presiding.
        Present: Senators Gorton, Stevens, Cochran, Domenici,
    Burns, Bennett, Campbell, Byrd, Leahy, Bumpers, Reid, and
    Dorgan.
        Also present: Senator Bond.

                           DEPARTMENT OF THE INTERIOR

                            Office of the Secretary

    STATEMENT OF HON. BRUCE BABBITT, SECRETARY OF THE
                INTERIOR

                                 Budget request

        Senator Gorton. The subcommittee will come to order.
        We are here today to hear testimony in support of the 1998
    budget request of the Department of the Interior, the principal
    department funded by the subcommittee. We are delighted that
    the Secretary has been able to be with us here today, and I
    would just like for him and for members of the subcommittee
    once again to refer to the chart there on my left.
        [The information follows:]

    Interior programs fiscal year 1997 enacted

    Land management programs:
        Forest Service......................................  $2,361,000,000
        National Park Service...............................   1,414,000,000
        Bureau of Land Management...........................   1,090,000,000
        Fish and Wildlife Service...........................     653,000,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total.............................................   5,517,000,000
                        ========================================================
                        ____________________________________________________
    Indian programs:
        Indian Health Service...............................   2,054,000,000
        Bureau of Indian Affairs............................   1,606,000,000
        Navajo-Hopi/IAIA/special trustee/Indian gaming/
          Indian education..................................     119,000,000
                        --------------------------------------------------------
                        ____________________________________________________
            Total...........................................   3,779,000,000
                        ========================================================
                        ____________________________________________________
    Science and minerals management programs:
        Geological Survey...................................     739,000,000
        Office of Surface Mining [OSM]......................     272,000,000
        Minerals Management Service [MMS]...................     163,000,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total.............................................   1,174,000,000
                        ========================================================
                        ____________________________________________________
    Energy programs:
        Energy consrvation R&D..............................     570,000,000
        Fossil energy R&D...................................     365,000,000
        Naval petroleum NPR/reserves........................     144,000,000
        Energy information administration/economic
          regulation........................................      69,000,000
        Alternative fuels production........................      -4,000,000
        Clean coal technology...............................    -123,000,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total.............................................   1,020,000,000
                        ========================================================
                        ____________________________________________________
    Cultural programs:
        Smithsonian Institution.............................     370,000,000
        National Endowment for the Humanities...............     110,000,000
        National Endowment for the Arts.....................      99,000,000
        National Gallery of Art.............................      60,000,000
        Holocust Memorial...................................      31,000,000
        Institute of Museum Services........................      22,000,000
        Memorials...........................................      41,000,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total.............................................     733,000,000
                        ========================================================
                        ____________________________________________________
    Interior departmental offices:
        Interior affairs....................................      88,000,000
        Departmental management.............................      58,000,000
        Solicitor...........................................      35,000,000
        Inspector general...................................      25,000,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total.............................................     207,000,000
                        ========================================================
                        ____________________________________________________
          Total.............................................  12,430,000,000

                               committee funding

        Senator Gorton. It shows where we are for the current 1997
    fiscal year, about $12.5 billion, just over one-half of which
    goes to the Department of the Interior itself. The largest part
    of our money, of course, that green line, goes to the four land
    management agencies, three of which are under the Secretary's
    jurisdiction, and the Forest Service that is not.
        Another very large portion, the second-largest portion, is
    comprised of programs for the benefit of Native Americans,
    primarily the Indian Health Service and the Bureau of Indian
    Affairs. The Indian Health Service is a particularly demanding
    responsibility of the subcommittee because the cost of simply
    maintaining existing levels of medical services increases at a
    rate that is in excess of inflation by a substantial amount.
        The third major grouping of agencies are the cultural
    agencies, the Smithsonian, the National Gallery of Art, the
    Kennedy Center, and the two Endowments. While these agencies
    account for a smaller portion of the total funds appropriated
    in the Interior bill, they are in most cases the agencies
    responsible for the care and protection of our Nation's
    heritage. These programs get very vocal support from across the
    country and from many Senators on both sides. In fact, when we
    had our hearing on the National Endowment for the Arts, I did
    not hear a single Senator on either side of the aisle who
    objected to continued funding of those agencies.
        The fourth group includes agencies that regulate minerals
    development out of our Nation's lands and those that produce
    the science and support management of those lands.
        The fifth grouping is programs within the Department of
    Energy, including energy conservation, research and development
    programs that are a high priority of the administration.
        So, Mr. Secretary, you are up with very, very tough
    competition. We have now agreed on an overall budget agreement
    through the year 2002. The Senate just last night passed a
    budget resolution that reflects that agreement. The increase in
    request on the part of the President is for just over 6 percent
    above the 1997 levels. The budget resolution will allow for an
    increase, but not an increase of that amount. So some
    reductions are going to have to be made, and we are going to
    need your help in setting priorities within your areas.
        You have got a wide range of responsibilities, some of
    which are multiagency such as the everglades restoration
    project and my own Interior Columbia basin ecosystem management
    project, not to mention the results of storm damage in Yosemite
    and elsewhere, and I understand you were there just in the
    course of the last couple of days.
        Some of the priority elements in the budget agreement do
    relate to programs under this subcommittee's jurisdiction.
    There are some of them that I am not completely in sympathy
    with. But I am a strong supporter of the bipartisan budget, and
    as far as I am concerned this subcommittee will meet the
    obligations that have been agreed to between the President and
    the congressional leadership in that connection. That leaves
    many other areas in this appropriations bill unprotected, and
    those priorities will have to be determined by the committee
    with, we hope, your help.
        With that, I would like to turn to my friend and guide in
    many of these things, Senator Byrd.

                        opening remarks of senator byrd

        Senator Byrd. Mr. Chairman, you will not proceed with
    questions until the Secretary has made his statement?
        Senator Gorton. We will let the Secretary make his
    statement.
        Senator Byrd. Well, I just share your sentiments in most of
    what you said. I am not onboard with respect to the so-called
    bipartisan budget agreement because I did not have anything to
    do with it. I did not have any voice in it, and so I am not
    buying onto it yet. But aside from that, the Senator has done
    yeoman's work on it in the budget committee, and I compliment
    him on that.
        I am glad to be here this morning with Secretary Babbitt,
    who has done a fine, fine job as Secretary. He has had
    limitations on appropriations and this has certainly been a
    problem for him and the people in his department. I compliment
    him on his good work, and I am delighted to be here, Mr.
    Secretary, this morning with you, and I look forward to hearing
    your statement.
        Senator Gorton. Senator Stevens, do you have an opening
    statement?
        Senator Stevens. No; I share Senator Byrd's statement. I
    will have some questions later, but I have no opening
    statement.
        Senator Gorton. Thank you.
        Senator Reid.
        Senator Reid. I will save my time for questions.
        Senator Gorton. Thank you.
        Senator Bond.

                        opening remarks of senator bond

        Senator Bond. Thank you, Mr. Chairman, for allowing me to
    join you today. We have in Missouri an ongoing interest in the
    Forest Service, the National Park Service, and the Fish and
    Wildlife Service, but I am here today to talk with the
    Secretary briefly about an area in which the State of Missouri
    has been drawn into a matter with the Interior Department
    against their will. And that is the filing of the petition by
    the Eastern Shawnee Tribe of Oklahoma to take land in southwest
    Missouri that they have purchased into Federal trust for the
    stated purpose of class III gaming.
        The application is now pending before the Secretary. I have
    had very productive discussions with the Secretary about it.
    The people of southwest Missouri are overwhelmingly opposed.
    The Missouri General Assembly has overwhelmingly adopted
    resolutions opposing it, State officials are opposed to it, in
    straw votes or opinion votes taken in the area they are opposed
    to it, and I just want to explore with the Secretary briefly
    the protections a State may have against the imposition of this
    kind of an activity in an area where it is totally
    inappropriate.
        Thank you for giving me the chance to be with you.
        Senator Gorton. Welcome to the club, Senator Bond.
        Senator Burns.
        Senator Burns. That was my line.
        Thank you, Mr. Chairman with your permission I will forgo
    my statement. It focuses mostly with the Park Service, and I
    will await the Secretary. I will await his statement, and I
    will do mine in the form of questions. Thank you very much.
        Senator Gorton. Senator Campbell.
        Senator Campbell. Thanks, Mr. Chairman. I have no opening
    statement. I do have maybe a couple of questions relating to
    parks and several other things, but the Secretary will be
    pleased to know that I am not going to ask him anything or
    buttonhole him about the Animas La Plata today.
        Secretary Babbitt. I do not believe it. [Laughter.]
        Senator Gorton. Mr. Secretary, it is up to you to give us
    your opening statement now.
        Senator Reid. I am going to ask the questions for him.
        Senator Gorton. I will say for my members here we have got
    a good attendance here, and I know that many of the members of
    this subcommittee have other duties, so I will defer my own
    questions until last, and allow my colleagues to ask theirs as
    soon as you have completed your opening statement.
        So please, Mr. Secretary, go forward.

                     summary statement of secretary babbitt

        Secretary Babbitt. Senator and committee members, thank you
    very much. In the spirit of this waiving of statements, I
    propose simply to summarize my opening statement.
        Senator Gorton. Your full statement will be included in the
    record.
        Secretary Babbitt. Thank you.
        I am pleased to come before the committee today in the
    spirit of the budget agreement which has been reached between
    the Congress and the administration, and I am optimistic that
    we are now, in terms of the Department of the Interior and
    these committees, way beyond the divisions of 2 years ago when
    we spent a lot of time in very antagonistic positions debating
    riders and debating fundamental differences over funding
    priorities. I am hopeful that we can work these issues out in a
    spirit of cooperation and bipartisanship, as indeed I think we
    for the most part succeeded in doing last year, to the
    substantial benefit of the Department and our various programs.
        I would at the outset, just briefly once again, underline
    the fundamental operative fact of our budget and operations in
    the Interior Department, and that is that our budget is about
    personnel and salaries. We have the highest percentage of
    personnel costs relative to total budget of any agency in the
    U.S. Government with the exception of the military and the
    Justice Department. And that, of course, means that as we begin
    the budget process each year we swallow 3 to 4 percent of fixed
    costs in terms of salaries, retirement, and benefits. That, in
    turn, has led us to substantial personnel reductions. During my
    tenure as Secretary we have reduced the payroll of the Interior
    Department by 12 percent, including a 15-percent cut in
    overhead in Washington and in other management positions. That
    is the largest percentage cut in personnel of any of the
    domestic cabinet agencies.

                           interior program direction

        Now, just a brief word about the nature of the program
    evolution in the Department. At the beginning of this second
    Clinton administration it might be helpful, very briefly, to
    suggest what the year-to-year additions, changes, and
    subtractions add up to in terms of overall direction. What we
    have been doing, I think consistently and with considerable
    success, is recognizing that in the West and elsewhere, in
    areas of our jurisdiction, we solve problems best by looking at
    the large picture, by looking beyond boundaries, by looking
    beyond the boundaries of agencies, by recognizing that
    increasingly in this complex interrelated world it is very
    difficult to solve problems one at a time. We, in fact, provide
    more conservation values and more resource development
    possibilities by looking across the landscape, bringing in all
    of the stakeholders, many of the Federal agencies, and
    attempting to craft larger solutions.
        That, of course, explains the emerging success in evolution
    of the Florida Everglades ecosystem restoration efforts. It is
    the theory that motivated the President's forest plan in an
    attempt to find an appropriate balance on the landscapes of the
    Pacific Northwest. It is being worked out now in the context of
    the issues in the California bay delta, where we are dealing
    with resource use, fish and wildlife, agriculture, the urban
    water supplies of California communities from San Francisco
    down to the Mexican border.
        There are a number of other efforts under way which have
    received less attention but I think are equally promising in
    their possibilities. I would mention just three. There is a
    large interstate effort under way in the Colorado River Basin
    now, designed to adjust and maximize the water supply resources
    for all of the conflicting claimants in the seven States that
    are covered by that basin. Senator Reid is well aware of the
    implications of that for Nevada. There are major changes under
    way in southern California involving urban users, agriculture
    with major impacts in Colorado and the upper basin States. But
    the important thing is that those efforts involve a
    comprehensive attempt to deal with ground water resources for
    the city of Albuquerque, fish and wildlife issues in Colorado,
    agricultural needs of the Navajo Indians, the administration of
    parks, the Endangered Species Act, water supply, as I
    mentioned, in Nevada, California, and Arizona.
        We will be in Denver probably in the next couple of weeks
    to join with the Governors of Colorado, Wyoming, and Nebraska
    for a major settlement involving the administration of the
    water resources of the entire Platte River basin. Senator
    Gorton mentioned the East Side Columbia environmental impact
    statement process. The two environmental impact statements
    relating to the Columbia River basin will be released within
    the next few weeks. They will begin a year-long process, a very
    public process involving all of the stakeholders of State and
    local governments, in an attempt to see if we can find the
    right management prescription for the Federal lands in the
    Columbia River basin. This will have large implications for
    timber harvest, grazing, the protection of fish, the
    development of lands, and the economies in all of the rural
    areas that are impacted. I have been carefully through the
    studies in the preliminary environmental impact statements. I
    believe we have a major opportunity to reach an important
    consensus about the future of the Federal lands in the four
    States that are impacted in the Pacific Northwest.

                            land management agencies

        Next, I would like to just say a word specifically about
    the budgets of the land management agencies. We have worked
    well with you in past years on these budgets, and I anticipate
    a productive year again this year. With respect to the National
    Park Service I would like to say three things.

                           fee demonstration project

        First of all, the fee demonstration program that was
    authorized by this committee, and indeed pressed upon me with
    considerable vigor by Senator Gorton, who in months leading up
    to the 1996 election called me regularly saying: ``why have you
    not raised fees in national parks on the eve of this
    election?''
        Well, the happy bottom line is that we have raised fees,
    and the public response has been overwhelmingly positive. We
    have had virtually no negative feedback, because I think the
    public understands that these fee increases are going to bring
    tangible improvements in the National Park System. The cause
    and effect relationship makes a lot of sense, and that is
    exactly what we are seeing. That program is now being expanded
    pursuant to the direction of this committee, and I am very
    pleased at your willingness to support that, and indeed to move
    us along at a rapid pace.

                             yosemite flood damage

        Senator Gorton mentioned the Yosemite flood, the
    destruction in the valley and our response in the form of the
    supplemental. Let me just say that the Park Service has done a
    splendid job in getting that park back open. As of the end of
    this week, all of the major access routes into Yosemite, from
    Fresno, Merced, and the northern communities, will be open. We
    still have a major reconstruction task. You can see it in the
    park, and you can see on the roads going in, and in all of the
    infrastructure.

                            transportation in parks

        Third, with respect to the parks, I think it is important
    that we seize the next 4-year period to deal with
    transportation issues as much as we possibly can. Yosemite,
    Grand Canyon, Zion, many of the parks are simply jamming up,
    and the problem is not too many people, it is too many cars.
    That is leading us to a series of management proposals for
    Yosemite, and for Grand Canyon, which I will take briefly as an
    example.
        The Grand Canyon management plan will be out shortly with a
    proposal that visitors will park their cars at the entrance to
    Grand Canyon National Park and move from the entrance into
    Grand Canyon Village on a mass transit system, possibly a light
    rail system. The economics look pretty good. It looks like we
    could actually put out a concession contract and finance that
    kind of system using a combination of the authority we now have
    for entrance fees and financing proposals of that nature.

                             endangered species act

        Let me say a brief word about the Fish and Wildlife
    Service. The major issue of the Fish and Wildlife Service
    obviously is the Endangered Species Act. There are discussions
    going on under the leadership of Senator Kempthorne and Senator
    Chafee that have made considerable progress. I do not know
    where that will end. I would simply say that we are
    aggressively involved in those discussions, and I think that
    the possibility there reflects the success that we have had in
    diffusing most of the issues--not all of them, but certainly
    most of the issues--relating to the Endangered Species Act
    through the use of habitat conservation plans, the evolution of
    the no surprises policy, and the innovations that we have put
    on the ground administratively using the Endangered Species Act
    are reflected in the budget proposals. I would urge you to look
    carefully at those proposals, because the budget requests are
    crucial to keeping the momentum going to resolve these problems
    rather than letting them drift into the courts, and ultimately
    to keep the successes going which I believe provide the
    framework for finding consensus on reauthorization.

                           national wildlife refuges

        There has been a considerable discussion increasingly in
    the national press about the issues in the national wildlife
    refuges. Those issues are reflected in a budget increase of
    approximately 6 or 7 percent. It is an important issue just to
    keep the refuge system moving.

                           bureau of land management

        A word about BLM. There is, Senator Bennett, an increase of
    approximately $5 million for the administration of the Grand
    Staircase-Escalante National Monument, and it has components
    which involve participation by the local communities and the
    play-out of a very intensive 3-year management plan.
        The budget has provisions relating to our efforts with the
    Forest Service to step up our treatment of forest lands through
    the use of thinning and prescribed fire. I will not get into
    that except to say that I believe it represents a major
    departure, and remarkably, an area of emerging consensus that
    has brought together the environmental community, the resource
    users, and the local communities, and I would direct your
    attention to that.

                                indian programs

        Last, a word about the Indian programs. I would make just
    two or three points. First of all, we ought to recognize that
    we have together made genuine progress in reshaping the Bureau
    of Indian Affairs. It is not widely acknowledged, but the fact
    is that we have downsized the Bureau of Indian Affairs more
    than any other agency in the Department. We have reduced the
    personnel in the BIA by 20 percent--20 percent--in the last 4
    years in the nonpolice and nonteacher categories. As a result
    of that, 91 percent of the funding in the Interior Department
    for Indian Affairs flows through directly to the Tribes
    themselves, teachers, and policemen. The administrative
    overhead of the Bureau of Indian Affairs has now been reduced
    to 9 percent. The process is working.

                               prepared statement

        The request for Tribal priority allocation is earmarked, I
    believe, in the budget agreement as a reflection of our concern
    for those issues. The remaining issue is the role of the
    special trustee. I would, rather than going through that in
    detail, be happy to respond to questions. I have expressed
    publicly my concerns about the direction that some of the
    trustee's efforts are taking. I have laid those out in writing.
    I would be happy to provide the committee with a copy of that.
    It is an urgent issue. It needs attention, and I think that it
    absolutely requires the close involvement of this committee,
    because the trustee has a statutory charge that is in some
    degree independent of my oversight. That is the reason that I
    want to very emphatically flag it, because I think we are
    jointly responsible for the outcome of this exercise and that
    it needs a great deal of very careful oversight and
    supervision.
        Mr. Chairman, committee members, thank you.
        [The statement follows:]
                    Prepared Statement of Hon. Bruce Babbitt
        I am pleased to again appear before the Subcommittee on Interior
    and Related Agencies. As the Chairman and senior members know, this is
    my fifth annual appearance before the Subcommittee as Secretary.
        I testify today in support of the fiscal year 1998 budget request
    for the Department of the Interior with cautious optimism. Two years
    ago we were deeply divided over funding priorities and over the
    inclusion of controversial legislative riders in the Interior
    Appropriations bill. Last year, at the end, we were able to come
    together on a bill that was satisfactory in most respects to all of us.
    At the same time, agreement was reached on the authorizing side on the
    important 1996 Omnibus Parks Act and on other natural resource
    legislation, including the California Bay-Delta Environmental
    Enhancement and Water Security Act.
        In the context of an overall budget that reaches balance by 2002,
    the President's 1998 request for the Department builds on the
    foundation of our 1997 agreement. The President's request seeks a total
    of $7.5 billion for the Department in funds subject to annual
    appropriation by the Congress. An additional $2.3 billion will be
    provided by permanent appropriations.
        For Department programs under the jurisdiction of this
    Subcommittee, the request for annual appropriations is $6.6 billion for
    1998. This is an increase of $389 million in current budget authority
    over the regular appropriations provided in the 1997 Interior and
    Related Agencies Appropriations Act. It is an increase of $290 million
    in current authority over total 1997 appropriations available to date,
    including emergency funding released by the President.
        Within these totals, we propose the funding necessary for our
    operational and on-the-ground requirements to ensure that we meet our
    continuing commitments:
      --to the restoration of America's natural and cultural heritage
            through regional partnerships with other Federal agencies,
            State and local governments, community groups, and the private
            sector;
      --to the millions of Americans who use the National Parks, National
            Wildlife Refuges, and public lands every year, and to an
            Endangered Species Act that works;
      --to protecting and encouraging Indian self-determination and meeting
            Federal trust responsibilities to American Indians; and
      --to a program of scientific research that contributes to describing
            and resolving the Nation's resource and environmental issues.
        Our ability to propose a budget that protects these priorities is
    due to the President's commitment to the environment and programs for
    Native Americans and to our aggressive efforts over the last three
    years to streamline the Department, reducing headquarters staffs and
    management layers, and to reengineer our processes and improve the
    efficiency and effectiveness of our customer services.
        As of the end of fiscal 1996, we had reduced our overall employment
    level by nearly 12 percent below 1993. The largest reductions have been
    in headquarters and overhead staffs, so that Interior employment in the
    Washington, D.C. area has been reduced by 15 percent. Our Department-
    wide reduction is second only to the Defense Department among large
    cabinet agencies.
        Partnerships for restoration.--As I look back across the budgets I
    have presented to the Subcommittee, the most striking trend is the
    increasing recognition that natural resource issues cannot be resolved
    on the basis of jurisdictional boundaries or by the work of single
    levels of government, let alone individual agencies. For decades, the
    tendency was to think of natural resources in terms of a conservation
    approach: set aside the ``back forty'' as a nature preserve and it will
    take care of itself. Modern science and modern ecology have taught us
    that the natural world does not work that way. Landscapes are complex,
    living, and integrated systems.
        Three principles must guide our approach to the most pressing
    natural resource problems. First, we cannot solve these problems by
    treating individual symptoms. We must treat them on a landscape scale.
    Second, in seeking solutions we must look across, and beyond, agency
    boundaries. We need to involve all the relevant Federal agencies, as
    well as States, local and tribal governments, industry, non-profit
    groups, and concerned ordinary citizens. Third, our goal should be
    restoration, so as to ensure the long term ecological and economic
    health of communities.
        These three principles are reflected in some of our most important
    1998 proposals:
      --Congress authorized the Everglades National Park to preserve the
            sawgrass prairies, mangrove forests, and abundant wildlife of
            the largest remaining subtropical wilderness in the coterminous
            United States. The Park has since been complemented by the
            establishment of the Big Cypress National Preserve and several
            national wildlife refuges. But this ``back forty'' is not
            thriving. Man-made changes have profoundly altered the flow of
            water from the Kissimmee River to Florida Bay. Water quality
            has been degraded, wading bird populations in Everglades
            National Park have declined by nearly 90 percent, commercial
            fisheries in Florida Bay have collapsed, and non-native and
            exotic plants and animals have proliferated, overwhelming some
            indigenous species.
          Four years ago, we joined together with a broad group of Federal,
            State, tribal, county, municipal, and special purpose agencies
            to save the Everglades. This group is motivated by a consensus
            that restoration of natural hydrologic functions in South
            Florida is essential not only for the parks and refuges in the
            region, but also for the continued health and vibrancy of the
            economy of South Florida.
          The State of Florida has committed major resources to restoration
            of the Everglades. In this budget, we again propose to
            establish an Everglades Restoration Fund. Funding of $100
            million is sought in 1998, with advance appropriations of the
            same amount that would become available in 1999, 2000, and 2001
            for a total of $400 million. These amounts, together with the
            $200 million plus provided by the 1996 Farm Bill, will provide
            an assured funding stream for critical elements of watershed
            restoration, including land acquisition, construction of the
            Modified Water Delivery project for Everglades National Park,
            and scientific research.
      --On the other side of the country in the California Bay-Delta, our
            budget addresses another, very similar problem of a stressed
            landscape. Although not within the jurisdiction of this
            Subcommittee, our request for the Bay-Delta demonstrates the
            necessity for comprehensive, long-term approaches to the
            complex and interrelated problems of an entire landscape.
          The region where the Sacramento and San Joaquin Rivers meet the
            San Francisco Bay once sheltered a stunning variety of fish and
            wildlife and still provides habitat for 120 species, including
            some listed as threatened or endangered. The region is also
            critical to California's economy, providing water to two-thirds
            of all homes and businesses in the State and irrigating more
            than four million acres of farmland where, among other crops,
            45 percent of the Nation's fruits and vegetables grow.
          For the past 150 years, dredging and channelization, flood
            control, unscreened diversions, pollution, and large-scale
            water exports have contributed to the degradation of the Bay-
            Delta ecosystem. As a result, the Bay-Delta has reached the
            point where it cannot reliably meet the water needs of
            California residents, businesses, and agriculture while
            protecting environmental resources.
          In 1994, Federal and State officials signed the historic Bay-
            Delta Accord. The Accord recognizes that a comprehensive
            package of actions is required to strike a fair balance among
            competing uses, restoring and protecting the Bay-Delta
            ecosystem while strengthening the State's long-term economic
            health. Last September, 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 ecosystem and for other water resources activities in
            California.
          Our request for the Bureau of Reclamation in the Energy and Water
            Development Appropriations bill seeks the $143.3 million
            authorized for 1998 in the Bay-Delta Act. The requested funds
            will be distributed among participating agencies based on plans
            to be developed by the CALFED group, a consortium of the
            Federal and State agencies with management and regulatory
            responsibilities in the Bay-Delta. These funds will match non-
            Federal funding under the terms of a cost sharing agreement now
            being developed.
      --In the Pacific Northwest, the budget proposes to continue the
            funding for the President's Forest Plan, the first of our major
            partnerships for restoration.
          At the beginning of this decade the northern spotted owl
            triggered a crisis in the old growth forests of the Pacific
            Northwest. Yet, like a sneeze, the owl was only a symptom
            warning us that the entire Northwest forest system was sick,
            over stressed, and in need of treatment. Science told us that
            we needed to prescribe treatment for the whole forest,
            providing unbroken corridors textured by a mixed canopy of
            trees varied by age, size, and species, and maintaining wide
            stream buffers along fish bearing streams, from headwater to
            tidewater.
          The Plan is not just about owls, salmon, and other wildlife. It
            directly addresses the economic issue: Healthy forests are
            important for a healthy, forest-based economy. If we destroy
            our old growth forest, we will lose jobs in salmon fishing and
            tourism and eventually in our timber industry as well.
          Under the Plan, logging has been scaled back from the
            unsustainable levels of the 1980's. At those cut levels, the
            forests (and the forest economy) would be destroyed within a
            generation, just as they were in earlier times in New England
            and the upper Midwest. By scaling back to a sustainable level,
            we ensure a steady, predictable supply of timber for loggers
            and mills in the century ahead. And we ensure that the forest
            towns will continue to diversify, with new people and new
            industries seeking the quality of life and the health of the
            natural landscape.
          The Plan is working, with the help of funding provided by the
            Subcommittee to the Bureau of Land Management and Fish and
            Wildlife Service. Unemployment in the Northwest forest
            communities has hit the lowest level in generations. We didn't
            lose 100,000 jobs, as some critics predicted, we created jobs.
          For 1998, we request $71.1 million, an increase of $2.9 million
            over the 1997 enacted level. This level will allow the Bureau
            of Land Management to meet its 1998 timber target of 211
            million board feet, as part of the Plan's overall annual
            sustainable harvest target of 1.1 billion board feet. It will
            also allow the Fish and Wildlife Service to continue a
            streamlined Endangered Species Act consultation process, to
            negotiate additional habitat conservation plans, and to
            implement the 4(d) rule, which will relieve spotted owl
            prohibitions for 30,000 owners of small tracts of land.
        In addition to these major initiatives, the budget supports
    numerous other partnerships across the country, including support for
    numerous habitat conservation plans outside of the Pacific Northwest,
    increased funding for partnerships to clean up mine drainage in the
    Appalachian States, and start-up funding for the nine new heritage
    areas partnerships authorized by the Omnibus Parks bill. An increase of
    $1 million in the Park Service will fund technical assistance
    partnerships with communities to assess and restore watersheds affected
    by non-point source pollution and wetlands loss.
        Managing fire.--Last year, fires burned over six million acres,
    including almost five million acres in the public land states of the
    West and Alaska. As has been the trend in recent years, the wildland
    fires in forests and on ranges burned hotter, bigger, and faster--
    growing ever more lethal, destructive, and expensive to fight. Two
    decades ago, we spent an average of $100 million each year to put out
    wildfires; last year we spent $1 billion.
        This explosion of fire--and cost--is in large measure the ironic
    product of our success over the past 90 years in suppressing fire.
    Healthy, low-intensity natural fires that once burned across the forest
    floor have, as a matter of policy, been ``out by 10 a.m.''
        Last February, Secretary Glickman and I released the Wildland Fire
    Policy Review directing managers to place greater emphasis on fuels
    reduction as a tool for protecting forest and rangeland resources. Our
    1998 budget addresses the practical problem of implementing this
    policy. In the Interior wildland fire account, the budget proposes an
    increase of $4.8 million for a combination of prescribed fire and
    mechanical treatment to reduce fuels. This will bring the total
    Department of the Interior hazardous fuels reduction program to $12.8
    million, which will treat half a million acres. The Forest Service
    program for 1998 is proposed to total $30 million and treat at least
    800,000 acres. This proposal establishes the foundation for a long-term
    effort to address our fuels management needs through the budget.
        Land management operations.--As has each of our budgets during this
    Administration, the 1998 budget proposes the funding we believe
    necessary to adequately operate the National Park Service, Fish and
    Wildlife Service, and Bureau of Land Management and to preserve our
    parks, refuges, and public lands so that future generations may have
    the same opportunity to experience our natural and cultural heritage
    that we have had.
        The increases requested in the budget reflect the continuing
    popularity of national park and wildlife refuge systems, as well as the
    public lands in the West; park visitation is projected at over 275
    million people in 1998, and hunting, recreation, and other visits to
    the public lands and wildlife refuges will continue to increase. The
    increases also reflect the personnel intensive nature of operating and
    maintaining 374 parks, 509 wildlife refuges, and 200 BLM districts and
    resource management units. The costs for the staffing necessary to
    provide services to the public and properly maintain natural and
    cultural resources range between 50 and 60 percent of land management
    bureau operational costs, five to six times the average for all Federal
    agencies.
        The budget proposes an increase of $65.7 million for the Operation
    of the National Park System account. This increase includes across-the-
    board increases so that all parks can maintain their current level of
    services and targeted increases for 63 parks to cover new
    responsibilities and previously unfunded needs. Among the 63 parks are
    the five new areas added to the National Park System by the Omnibus
    Parks Act.
        An area of emphasis in the Park Service's operations budget is
    additional funding to maintain irreplaceable cultural and historic
    resources of the Park System. Increases are proposed for historic
    structures stabilization, cultural cyclic maintenance, and museum
    cataloguing, as well as for a Vanishing Treasures initiative. This
    initiative recognizes the highly specialized maintenance needs of the
    Anasazi and other Native American sites in the arid southwest, over 60
    percent of which have been severely impacted by weathering and erosion.
    It will provide $3.5 million to bring these resources to a point where
    they can be sustained by routine preservation treatment programs. As
    part of the initiative, the Park Service will train a new generation of
    specialists to take over the task of preserving this unique cultural
    heritage as many of the current specialists retire over the next few
    years.
        For the Fish and Wildlife Service, proposed increases in the
    Resource Management account include $13.2 million over 1997 for
    operation and maintenance of the highest priority units of the National
    Wildlife Refuge system. This will allow greater opportunities for
    compatible, wildlife-dependent recreation, reduce operational backlogs,
    and provide additional habitat restoration. Specific projects have been
    selected using a ranking system, the Refuge Management Information
    System, which will ensure the most efficient distribution of limited
    resources to meet the highest priority refuge needs.
        An increase of $11.8 million in BLM's Management of Land and
    Resources account emphasizes improvements in recreational programs at
    highly visited sites such as Red Rock, Nevada, where visitation has
    grown 13 percent a year for five years, and the strengthening of BLM's
    resource protection capabilities, including an additional $3 million
    for the cleanup of abandoned hardrock mine sites in Montana and
    Colorado, and an additional $1 million to combat invasive weed species
    that threaten the health and productivity of public lands. Funding for
    the new Grand Staircase-Escalante National Monument is proposed at $6.4
    million, an increase of $5 million over 1996 base funding for the area,
    to ensure a planning process that fully involves the people of Utah and
    other stakeholders, and to provide services for an expected increase in
    visitors.
        Increases in the MLR account are partially offset by decreases in
    other MLR programs, primarily the Automated Land and Mineral Records
    System, which is moving from the development phase to the operation and
    maintenance phase. We intend to give ALMRS its operational test in New
    Mexico this Spring and are currently planning to bring on-line all of
    the BLM States over the next 20 months. We have put in place a seasoned
    management team at this critical juncture, including the appointment of
    BLM's first chief information officer. The system holds great promise
    for providing land and mineral information to State and local
    governments, industry, and the public.
        Recreation fees.--In an era of constrained budgets, we cannot
    expect the general Treasury to meet all of the needs of our public
    lands. In 1996, the Subcommittee supported in authorizing a
    demonstration program to test fee collection levels and methods at
    parks, refuges, and public land sites. We are in the process of
    implementing that authority. Demonstration fee programs are in place at
    over 100 sites and an additional 50 sites are in the process of being
    designated. In 1998, we expect to collect over $50 million to
    supplement regular appropriations.
        This new revenue will be applied to maintenance and infrastructure
    needs to improve the quality of the visitor's experience. At the
    largest parks with the highest visitation, we will be able to achieve
    dramatic results. At the Grand Canyon, visitors on the busiest days can
    wait as many as two hours for a parking space. The experience at the
    Rim of the Canyon is one of urban traffic, not majestic solitude. With
    demonstration fee revenue, we will help provide a new inter modal
    transportation hub away from the Rim, along with a light-rail system or
    a fleet of clean, quiet shuttle buses for visitors.
        The President's budget proposes legislation for a permanent fee
    program based on the demonstration program. The budget also commits the
    Administration to work with the Congress to reform Park Service
    concession fees.
        Endangered species.--The President's budget proposes $78.8 million
    to continue our efforts to administer the Endangered Species Act to
    provide effective protection for species while minimizing economic
    effects, assuring fair treatment for landowners, and reducing delay and
    uncertainty for States, local governments, private industry, and
    individuals. This is an increase of $11.4 million from 1997.
        With the requested level of funding, the Fish and Wildlife Service
    will be able to pay for 292 projects to keep declining species off of
    the endangered and threatened lists and work on 100 habitat
    conservation plans. The Service will also be able to manage an
    increasing Section 7 consultation workload, including 38,000 technical
    assistance consultations (up nine percent from 1997), 900 formal
    consultations (up six percent), and 1,500 programmatic consultations
    (up 76 percent).
        Bureau of Indian Affairs Programs.--My biggest disappointment in
    the otherwise sound compromise on 1997 appropriations was that we were
    unable to agree on a higher level of funding for programs that support
    tribal self-determination. The claim of Native Americans to a fair
    share of attention and resources is very great, and I do not believe
    that claim was met over the past two years.
        The budget requests an increase of $114.4 million for the Bureau of
    Indian Affairs. Of this total, $76.5 million or 67 percent, is for the
    Tribal Priority Allocations budget activity, the part of the budget
    that Tribes allocate according to their own locally-based priorities.
    Among other things, this increase will allow Tribes to maintain an
    additional 1,250 miles of reservation roads; to hire another 400 law
    enforcement staff; and to fund an additional 220 child welfare cases
    each month. However, even with the increase, the overall level of TPA
    funding will be only two percent higher than it was in 1995.
        An increase of $16.8 million is proposed for elementary and
    secondary school operations to provide funds for an anticipated three
    percent increase in enrollment to a total of 52,400 and for statutorily
    mandated pay increases.
        In the President's budget, TPA and education programs together
    comprise 82 percent of the BIA operating budget. Other reservation-
    based programs account for nine percent. Only nine percent of the
    operating budget pays for administration of the Bureau. In 1998,
    Central and Area Offices and other support functions are funded at a
    level about $26 million lower than three years ago, a reduction of more
    than 20 percent. The BIA's staffing level will continue at its current
    level, the lowest in 15 years.
        Office of the Special Trustee.--The budget proposes to continue
    efforts to ensure that the Federal Government fulfills its Indian trust
    management responsibilities. The 1998 request for the Office of the
    Special Trustee is $39.3 million, a $5.2 million increase over the 1997
    enacted level. With funds appropriated in 1997, the Special Trustee
    should initiate reform efforts and begin to make critically needed
    improvements to Individual Indian Money accounting systems, policies,
    practices, and procedures. In 1998, a total of $16.7 million will be
    available for continued implementation of Indian trust management
    systems improvements.
        The Special Trustee recently submitted his Strategic Plan to reform
    Indian trust management to the Administration and the Congress for
    consideration. The plan represents his views, independent from the
    Department and the Administration. I have significant concerns
    regarding the plan. Most importantly, it seems to lack a fundamental
    understanding of the relationship of sovereign tribal governments and
    Federal trust responsibilities. I am also concerned that the plan
    expands the Federal Government's investment functions and that it
    identifies large, new budget outlays without the identification of
    alternative courses of action and analysis of the cost, benefits,
    advantages, and disadvantages of alternatives.
        While I have concerns regarding the Special Trustee's plan, I do
    not want these concerns to slow our progress in improving trust
    systems. The Administration has allocated what we believe to be
    substantial resources for implementation of trust systems improvements
    during fiscal year 1997 and 1998. I intend to hold the Special Trustee
    accountable for implementing improvements. I feel confident that,
    through careful priority setting, we will be able to make the most
    critically needed reform efforts.
        The work of the Office of the Special Trustee is directed towards
    improving systems for the present and future. The question of past
    account deficiencies continues to be addressed separately. The
    Administration will shortly be sending a comprehensive report outlining
    our recommendations on settling tribal claims, and within the next few
    months, it is my expectation that we will submit a legislative proposal
    to the Congress that would establish a comprehensive process to provide
    for a fair settlement of these claims. The proposed legislation is a
    direct outcome of the five-year tribal reconciliation project
    initiated, funded, and overseen by the Subcommittee. As you know, the
    reconciliation effort did not extend to Individual Indian Money
    Accounts. In this area, we are working closely with the Justice
    Department to see if we can reach a settlement of a class action suit
    involving the management of these individual accounts.
        Science.--At the beginning of the current fiscal year, we
    successfully completed consolidation of the former National Biological
    Service into the U.S. Geological Survey. Over the years, the
    Department's earth science and biological research have provided the
    critical science needed for sound resource management. I am confident
    that the synergy between biological and earth sciences in the ``new''
    USGS will build on and expand this tradition.
        The 1998 budget for USGS is a net increase of $5.3 million over the
    1997 level. Within this total, we propose a $9 million increase in the
    National Water Quality Assessment program that will use the NAWQA model
    to provide information on water quality conditions for streams and
    acquifers of 75 of the Nation's key metropolitan areas, including the
    largest city in each State, as part of the President's initiative to
    provide the public information about toxics. Increases are also
    proposed for better operation and maintenance of the USGS portion of
    the Global Seismographic Network and for enhanced technical assistance
    to address priority biological research needs identified by the
    Department's land managing bureaus. The USGS and its research partners
    will also refocus $1.2 million in 1998 to a program to establish
    historic mapping and modeling databases for the New York, Chicago,
    Philadelphia, and Portland, Oregon metropolitan regions.
        The increases in USGS are partially offset by programmatic
    decreases resulting from Reinventing Government II initiatives and from
    scaling back other programs, including the Water Resource Institute
    program.
                                   conclusion
        I believe that the 1998 budget for the Department of the Interior
    supports priorities on which we can reach consensus. I hope that over
    the next several months we can have a dialogue to achieve that
    consensus.
        This concludes my statement. I will be happy to answer any
    questions you may have.

                                interior history

        Senator Gorton. Senator Stevens, as chairman of the overall
    committee, I will defer to you first.
        Senator Stevens. Thank you very much, Mr. Chairman.
        Would someone please give the Secretary that one piece of
    paper?
        Mr. Secretary, I must tell you that the last few months
    have been sort of traumatic, because this is your fifth year,
    is it not?
        Secretary Babbitt. That is correct.
        Senator Stevens. I spent 5 years in the Interior
    Department.
        Secretary Babbitt. And you had the good sense to move on.
        Senator Stevens. No; Mr. Nixon lost an election.
    [Laughter.]
        But while there, I worked on Mission 66, 10-year
    improvement of the Park Service. I drafted the Fish and
    Wildlife Coordination Act of 1958, which really opened up the
    conservation movement for that period of time. I lost an
    election in 1962 because I was called to be too green. Now I
    find myself trying to find some way to deal with the issues
    that affect the future of my State. So I want to show you
    something.

                              revised statute 2477

        This is a map that we had prepared with regard to the State
    and native lands of Alaska based upon the Revised Statute 2477
    problem. The shaded areas are the areas that were withdrawn in
    1980 and added to the Park System and the Fish and Wildlife
    System. The green are the rights-of-way that were identified
    prior to 1969, when your predecessor Secretary Udall withdrew
    the whole State and there could be no further rights created
    after that day under this law.
        In 1976, Congress passed an act, the FLPMA Act, that
    repealed the Revised Statutes. When we did, we added a
    provision three places in the bill that said valid existing
    rights were preserved.
        In 1994, I was informed that your office had promulgated a
    new regulation dealing with Revised Statute 2477, and I have
    asked them to give to you a sheet of paper, and I hope each
    member of the committee has one, that shows this. We put a
    moratorium in the National Highway System Act. It was placed in
    1994, but actually it did not become law until 1995. It was a
    prohibition prohibiting a regulation addressing rights-of-way
    pursuant to section 2477 as such act was in effect before 1976,
    October 1976 and that was sunsetted on September 30.
        Then we had a general provision in the 1996--September 30,
    1996. We had a general provision in the 1996 bill prohibiting
    use of funds, that is the Interior bill of this committee, and
    then we had in an omnibus bill that we passed last year, the
    omnibus consolidated appropriations bill for 1997, there was a
    general provision with no sunset which said no final rule or
    regulation of any agency of the Federal Government pertaining
    to recognition or management or validity of rights-of-way
    pursuant to Revised Statute 2477 shall take effect unless
    expressly authorized by act of Congress subsequent to the date
    of the enactment of this act.
        Now, you have not submitted any legislation, have you?
        Secretary Babbitt. I have not.
        Senator Stevens. And we have had some up for consideration,
    but we have not been able to get that out of committee, as I
    understand it.
        The problem now is that, as I understand it, you have now
    announced a new policy of revision of a 1998 policy that would
    state that on any of these rights-of-way they are valid only if
    they were created by vehicular traffic, is that correct?
        Secretary Babbitt. Senator, that is not correct.
        Senator Stevens. That is my understanding. What is the
    difference?
        Secretary Babbitt. The only action that I have taken in
    this respect was to write a letter withdrawing a letter which
    had been written by Secretary Hodel with which I disagreed and
    which did not reflect my views on this matter.
        Now, if I may clarify, there is, as you well know, a
    proposed set of regulations which have been prepared in
    considerable detail and circulated and which have been put on
    hold by this language. The regulations are currently in limbo
    pending direction or money or authorization from this
    committee.
        Senator Stevens. This is a direction to your agency. It is
    in a letter dated January 1997.

        The agency shall evaluate whether the alleged right-of-way
    constitutes a highway. A highway is a thoroughfare used prior
    to October 21, 1976, by the public passage of vehicles carrying
    people or goods from place to place. If the agency determines
    that the alleged right-of-way does not constitute a highway,
    the agency will recommend that the Secretary deny the claim.

                                 rights-of-way

        Now, that puts us into a conflicting position, as I see it.
    We have several rights-of-way that were used by railroads that
    are now extinct. The Kennicott Railroad, for instance, I take
    it that we could rebuild it, the Kennicott Railroad, under your
    letter, but we could not build--let me have those little
    charts, please.
        One of these rights-of-way is out to Hooper Bay, which is
    out on the west coast of Alaska.
        This is Hooper Bay. I have been there several times. It is
    a very interesting little community. It is not totally ethnic.
    It is native and non-native. It is basically a fishing
    community. All of their access is by a road which is across
    Federal land.
        This shows even more how the airport is out here
    [indicating], and this [indicating] is their road. We want to
    improve that road. It is a Revised Statute 2477 road. It was
    created by dogsleds.
        We have a whole series of other roads that were created by
    dogsleds, particularly down in Paminto Flats area. All of these
    roads that are in here were dogsled trails. As a matter of
    fact, one of them is the historic Iditarod trail.
        Mr. Secretary, the policy that you have announced is
    guiding upon your land agencies, and accomplishes even more
    than you would by the regulation. Because it in effect creates
    a Federal position on a matter that historically has been
    determined by State law.
        The next paragraph of your letter says role of State law:
    In making its recommendation, the Secretary shall apply State
    law in effect on October 21, 1976, to the extent it is
    consistent with Federal law. The agency in no case will
    recommend approval of claims that do not comply with
    requirements of applicable State law. But, Mr. Secretary, there
    is no Federal law.
        Secretary Babbitt. Senator, there most certainly is. It is
    Revised Statute 2477.
        Senator Stevens. Well, Revised Statute 2477 was repealed in
    1976.

                                 federal rights

        Secretary Babbitt. Well, but the rights that vested under
    it are Federal rights which have accrued and are in effect
    today pursuant to that law.
        Senator Stevens. But those were only determined by State
    law up till 1976. There was no Federal law in 1976 other than
    one sentence which was Revised Statute 2477. It did not have
    the word vehicular in it. You are now stating in your letter
    you are only going to recognize vehicular traffic created
    rights-of-way. That certainly was never involved prior to 1976.
        Secretary Babbitt. Well, Senator, I disagree with your
    interpretation of the Federal law. It is a stand alone Federal
    law. It does not reflect a Federal policy of deferring to State
    law. That does not appear in Revised Statute 2477, it does not
    appear in FLPMA, and it is, in my judgment, not the law as it
    stands today.
        Senator Stevens. Well, let me ask you this: Let us go back
    to my first statement. Having spent 5 years in your agency, I
    find myself now spending years combating with the agency that I
    really enjoyed serving at. Why is it we cannot get a proposal
    from you for review by Congress to establish a Federal law, if
    that is what you want?
        Secretary Babbitt. Senator, I believe that our proposal is
    set out in considerable detail in the proposed regulations.
        I would be ready and willing to do either one of two
    things, get the leave of this committee to promulgate the
    regulations, or, in the alternative, to use them as the basis
    for drafting a law to be passed by the Congress. I am ready and
    willing to do either one of those.

                            roads in national parks

        I do not accept the position, and would never support a
    Federal law which simply deferred this issue to the States. For
    example, the State of Alaska passed a statute saying there will
    be rights-of-way under State law along every section line in
    the State of Alaska. That would create 950,000 miles of roads,
    including 150,000 miles of new roads in the National Park
    System. I cannot support that.
        Senator Stevens. Now, Mr. Secretary, you have said that
    before. No national park in Alaska is surveyed. There are no
    section lines in any park in the State of Alaska. Did you know
    that?
        Secretary Babbitt. Well, Revised Statute 2477 and the
    Alaska statute does not turn on that issue. The Alaska claim is
    section lines, including 150,000 miles in national parks.
        Senator Stevens. But by definition, there are no section
    lines in national parks because you have never approved surveys
    in national parks in Alaska.
        Secretary Babbitt. Well, Senator, there are section lines.
    They have not been surveyed in many parks, as indeed they have
    not been in many parts of Alaska.
        Senator Stevens. There has never been a Revised Statute
    2477 right-of-way across a line that was not surveyed. Now, I
    am an ex-solicitor. You had better check with your solicitor.
    That is the fact. So I think we are arguing about something,
    and I would hope you would not accuse me of trying to build
    900,000 miles--do you know that all of the U.S. Federal Highway
    System is 960,000 miles?
        Secretary Babbitt. That is precisely my point. That is the
    reason we oppose Alaska's claims.
        Senator Stevens. Do you believe these gentleman are going
    to give us money for that? There are Federal highways in
    Alaska, but do you think we are going to get money for 900,000
    miles of road? Mr. Secretary, that is the kind of rhetoric that
    throws me up a tree. How can I explain to my people at home
    that I am not bringing home that kind of money? [Laughter.]
        Secretary Babbitt. Well, if that constitutes a waiver of
    Alaska's claim to rights-of-way on unsurveyed section lines, I
    certainly accept that.
        Senator Stevens. You had better hope, Mr. Secretary, that
    that State law is upheld. Because if you look at this, you will
    see that the rights-of-way to get into the national parks are,
    in fact, Revised Statute 2477 rights-of-way across State and
    native lands. The Federal Government will own 67 percent of our
    State when all of the selections are over, and the access to
    all the Federal lands requires access across the State and
    native lands. The statute was passed by the State of Alaska to
    assure that as lands went out of Federal ownership the concept
    of these lands--they are surveyed when they come out of Federal
    ownership, and the section lines are created then, and they
    give you and the people who use Federal lands rights-of-way
    across State and native lands. As a matter of fact, the Native
    people are now objecting because they seem to think that we are
    creating new rights-of-way across their lands. We are merely
    preserving rights-of-way.

                   supplemental appropriations veto proposal

        But, Mr. Secretary, here is the problem, and I am taking a
    lot of time of this committee, I am now chairman of this
    committee, and I have got a provision that is in this bill
    which is no different really from the three that were already
    negotiated. And, as a matter of fact, the only difference is it
    applies to a statement of policy instead of a rule or
    regulation. You have informed me by letter that this will be
    vetoed, that our bill will be vetoed if it stays in there. But
    it is there because your Department has not proposed, as
    Congress has directed now since 1995, to create a law with
    regard to section--to Revised Statute 2477 throughout the West.
    Not just Alaska, but throughout the West.

                           rights-of-way legislation

        I am here this morning to try to see if we can find some
    way to get, and I use this word advisedly, a commitment from
    you that you will not pursue that policy, but you will pursue
    what you have just stated, and that is submitting legislation
    so that we can review it. It will go through the legislative
    committees and our committee will not have to be involved in
    this on a year-to-year basis in order to try to protect the
    rights of the West, as they see them, from an administrative
    determination of what is Federal law as compared with what
    would come. I believe, that we would pass a law which would
    state very clearly that we are not going to allow national
    parks to have roads built through them, wildlife refugees to
    have roads built through them, except to this extent, that they
    are needed for access to airports, to hospitals, to rivers, to
    the people who live in rural Alaska and rural America, and that
    there is no other right-of-way available.
        Now, I am perfectly willing to go forward and help support
    such a law. But I am not willing to go forward and allow an
    administrative letter to establish a new body of Federal law
    which, as far as I am concerned, does not exist. Now, would you
    give us a commitment that if we proceed that you will not
    pursue this policy administratively until Congress has had a
    reasonable time to review it? If we cannot get bills through,
    obviously you are going to have to do something sometime along
    the line, I am aware of that. That is why we have had these
    provisions. But that last provision is general law. You cannot
    issue the rule or regulation. You may be able to issue the
    policy statement, but I think that would lead to interminable
    legislation in every State of the West, particularly mine.
        Incidentally, Mr. Secretary, we have 1,900 rights-of-way,
    the State tells me, and the State tells me that 560 of them
    would probably be pursued by the State. So my State has already
    eliminated almost three-fourths of the rights-of-way that would
    qualify under Revised Statute 2477's existing right provision.
    Now, that may or may not be--you might not even accept the
    final 560, but we are talking about basic rights of rural
    people. We do not need these to get to Anchorage or Fairbanks
    or the airport in Juneau or Ketchican. We need to get to them
    so that we can consolidate four or five villages up there.
        There are 50 villages up there in what I call the cusp of
    the Yukon fan, a separate airport for each one. We could
    consolidate those with roads, we could have one school instead
    of four schools, we are forced into a lot of economic changes
    now in our State. But if you insist that we can only have a
    road where there was vehicular traffic, we will not have those
    highways created.
        Now, I would like to secure a way right here to, on the
    basis of a commitment from you not to pursue this policy stated
    in your letter and to work with us to create a bill--if you
    draft a bill I will even introduce it, I will tell you that. I
    will introduce the bill. I may not support it all, but I will
    introduce it and see that it comes before the Congress and see
    that we try to get this resolved for the whole West. But I
    cannot, in due conscience, hold up a bill that has got so many
    things for people who are disaster victims in the West. You
    know we have more disasters than any State in the Union. On the
    other hand, I cannot in good conscience, as Senator from
    Alaska, take it out until we get some kind of an understanding
    how we are going to proceed from here.
        Secretary Babbitt. Senator, I would be happy to deliver to
    you today a draft bill. It will consist of the final proposed
    regulations. I believe it would be an appropriate piece of
    legislation. I will deliver it to you today.
        Senator Stevens. And if I introduce that today or tomorrow,
    will you not pursue on your administrative letter and enforce
    that policy until we have had a reasonable time to consider it?

                              rights-of-way policy

        Secretary Babbitt. Senator, let me explain the purpose of
    this letter, if I may. It has become a sort of symbolic
    flashpoint for a lot of abstract disputation. The only
    significance of this letter is what should I do by way of
    response to a specific, urgent, we have got to do it now,
    application. This is not 560 applications from Alaska or 1,000
    from Utah. This is a specific we have got to have a right-of-
    way right now in this township or this county. I need a policy
    by which to make those judgments. I have not been asked to make
    any, and my guess is that there will be relatively few.
        The reason that I rescinded the Hodel letter is because it
    said the policy was to pass on those applications by reference
    to State law. That is not my position.
        If I get an application, I will use this policy as an
    interim guide.
        Now, let me just say that if there is a railroad right-of-
    way or a sled track or whatever in Alaska in the interim that
    needs my attention as a question not of abstract policy but
    specific need, I will consider that and I view myself as free
    to be reasonable. These guidelines talk about recommendations
    from my agencies. If you have a specific problem with a
    railroad in Alaska or something like that, I will be happy to
    respond to you in a spirit of reason designed to solve the
    problem.
        Senator Stevens. I am not sure I really got an answer yet,
    Mr. Secretary. We have only had 1 mile--1 mile--of road
    approved in Alaska as a Revised Statute 2477 application since
    1976. Did you know that? 1 mile. They are all staggered in the
    Department somewhere seeking approval.
        Now, if in the interim your people start denying our
    applications--and, by the way, most people understand that they
    are applications of my State for rights-of-way to proceed under
    the Federal Highway System. Now, I would hope that we--I see
    here--no, I do not want to get into that. I do not have time
    for that right now. That is another process. That is a problem
    with NEPA and all of the rest of it that goes in here, and that
    is another thing.
        But if in the interim your people deny my State's--any of
    my State's applications based upon this determination, then we
    have lost. Now, I want an assurance you are not going to deny
    any State application under Revised Statute 2477 while Congress
    tries to work out a new Federal law dealing with the subject.
    If you will give us that, I will introduce the bill today.
        Secretary Babbitt. Senator, I cannot give you that. But I
    think that is an abstract request, because what I am saying is
    if in the applications submitted by Alaska there are action
    items that need my attention, I am prepared to personally sit
    down with you and go through each and every one of them and get
    a reasonable result.
        Senator Stevens. Mr. Secretary, I was in the Department too
    long. You have got hundreds of people out there handling these
    applications. They are out there, out in the BLM office in Nak-
    Nak or in Fairbanks or down in Utah somewhere, and they have
    got your letter. And you say you have rescinded that.
        By the way, the Hodel letter was prepared by all the
    agencies. He just signed the letter approving it. You have
    disapproved a basic memorandum of all the land agencies of
    Interior that was approved by Secretary Hodel. You did not get
    something to take its place. What you did was issue a new
    statement of a Secretary which said none of these old rights-
    of-way have any validity under State law. That is the way it is
    being interpreted out there. Now, I understand you are saying
    that is not what you're saying, but your agencies are turning
    these down now.
        Secretary Babbitt. Senator, I would be happy to straighten
    out my agencies. No. 1, these issues are not determined
    pursuant to State law. They are determined pursuant to Federal
    law. We are ready and willing to pass on them under Federal
    law, and what I am telling you is I think the policy is
    reasonable.
        Now, if there are specific problems, I am willing to get
    into them, because if you have legitimate rights-of-way issues
    my job is to get them out.
        Senator Stevens. Mr. Secretary, I am sorry to say we have
    wasted our time. And I thank you very much.
        Thank you, Mr. Chairman.
        Senator Gorton. Senator Byrd.

                               rights of congress

        Senator Byrd. Mr. Chairman, Alexander Pope said--I think he
    asked a very appropriate question: Who shall decide when
    doctors disagree? Now, here we have two of my best friends in
    Government disagreeing, one in the executive branch, one in the
    legislative, one a Republican and one a Democrat. What am I
    supposed to do?
        Senator Stevens. You had better protect the rights of the
    Congress, Senator, however you do that.

                     national conservation training center

        Senator Byrd. However you do that, to the best of my
    ability.
        Mr. Secretary, rapid progress is being made toward
    completion of a National Conservation Training Center in
    Shepherdstown, WV. This is a state-of-the-art training facility
    that will benefit natural resource professionals of the Fish
    and Wildlife Service, as well as other resource managers of the
    Interior Department, and our conservation partners. It is my
    understanding that the facility will be completed this fall,
    and I am looking forward to the time when you and I both may be
    able to dedicate this training center. Is everything still on
    track with respect to the completion of the facility?
        Secretary Babbitt. Senator, I anticipate that the facility
    will be ready for use in the full sense of the word in
    September. We have scheduled a dedication, I believe, in early
    December. I intend to be there, and I can tell you that the
    staffing is going along well. We are offering courses right
    now. We will have a full menu of courses.
        Senator Byrd. And you have sufficient funds to equip the
    facility?
        Secretary Babbitt. Senator, we have a small additional
    request in the President's budget. I can give you the detail. I
    think it is approximately $4 million for the operational side.
        Senator Byrd. And you will be able to award a contract for
    construction of the third dorm?
        Secretary Babbitt. Senator, we anticipate awarding that
    contract probably about the end of the summer, and that would
    lead to completion about 1 year from then, in about September
    1998.
        Senator Byrd. To what extent is the Fish and Wildlife
    Service already signing up participants to undergo training at
    the facility once it is opened?
        Secretary Babbitt. Senator, I think that is a key question,
    because the full utilization of this center really depends upon
    a strong interagency commitment from the Corps of Engineers and
    the Department of Defense, Forest Service, and marine
    fisheries. The Forest Service has a full-time program officer
    now assigned to the center, and that is reflected in the
    training courses. Obviously, we have high hopes that courses
    will continue to develop--I believe they will--on a
    reimbursable basis.
        Senator Byrd. I understand that it is already booked to
    full capacity for fiscal year 1998, for the 100 dorm rooms that
    will be available. Is that true?
        Secretary Babbitt. Senator, I am not absolutely certain,
    but I will check that out and get back to you. I am satisfied
    that we have a strong menu of programs and reservations. I am
    not sure of the exact number.
        [The information follows:]

                     National Conservation Training Center

        The total number of participants scheduled for classes at
    the National Conservation Training Center (NCTC) in fiscal year
    1998 at the present time is approximately 5,064. This
    translates into approximately 25,320 student days. The NCTC
    housing capacity for fiscal year 1998 is 100 rooms, which
    translates into 25,000 student days. Overflow students will be
    lodged at hotels in Shepherdstown, WV and will travel to NCTC
    during the day for courses. Approximately 500 NCTC participants
    have booked offsite accommodations in fiscal year 1998 at this
    time.
        The NCTC has additional classroom space available, and
    continues to discuss facility usage opportunities with
    interested parties, with the understanding that these
    participants would use offsite lodging. The addition of a third
    lodging unit will increase the use of these additional
    facilities. As students begin to arrive in September, we are
    confident that word of the facility will quickly spread, and
    customer demands will increase rapidly.

                                    training

        Senator Byrd. You mentioned some of the agencies with which
    the Fish and Wildlife Service have been working in order to
    ensure that the training center will be used fully. Will these
    agencies cover their costs when they use the facility?
        Secretary Babbitt. Senator, that is our intention, to, in
    effect, operate this on a cost-sharing basis, with the agencies
    reimbursing their proportionate share of room, board, and
    tuition, if you will.
        Senator Byrd. To what extent has the Service already begun
    outreach and conducted training with the parties that will be
    using the center once it is completed?
        Secretary Babbitt. Well, we are under way with the training
    curriculum. I might also add that we have had a good response
    in the nongovernmental community. We have been working with the
    Conservation Foundation and others to see if we can put up a
    nongovernmental set of programs. We actually have some of those
    courses and some utilization under way right now. I think it is
    an important component.
        Senator Byrd. What kind of feedback are you getting from
    the participants?
        Secretary Babbitt. Senator, it is very positive. It is an
    extraordinary facility, and it is really working very well. One
    reason is that we actually can get people to the training
    resources but keep them out of Washington, which is a major
    benefit. What it means is you can really have a training
    program rather than people hanging around. There is no where to
    go when class is over except back to your dorm and to the
    dining hall, and it is perfect for training, perfect.
        Senator Byrd. Mr. Secretary, you are preaching the sermon I
    have been making for many years here, in the face of some
    obstinate critics. And I think you and I are both right, as we
    will prove it at Terrapins Neck in Shepherdstown, which is the
    oldest city in the State of West Virginia.

                     canaan valley national wildlife refuge

        Let us shift just a moment now to Canaan Valley. In recent
    years Congress has provided funding at a rate of about $2
    million annually to allow for continued land acquisition in
    support of this, which is our Nation's 500th national wildlife
    refuge, located at Canaan Valley. This year there is no funding
    requested to continue the acquisition program. Has all of the
    land within the designated boundaries of the refuge been
    acquired? If not, how many acres remain to be acquired?
        Secretary Babbitt. Senator, there is a substantial amount
    of land to be acquired. I think about 20,000 acres. But as you
    know, the land acquisition budget is a complex issue. The
    priorities are fought over internally, externally, in the
    appropriation process, and the rank ordering this year does not
    include acquisition funds. We need, I think, probably about $40
    million to complete the process over the coming years.
        Senator Byrd. And at the rate we have been going, that
    would require 20 years, $2 million a year. Are there willing
    sellers interested in selling their land for inclusion in the
    refuge?
        Secretary Babbitt. Yes; there is no problem on that score.
        Senator Byrd. If additional funds were provided, then, to
    continue with the acquisition program, would the Department be
    able to expend these dollars to acquire additional land for the
    refuge?
        Secretary Babbitt. Yes.
        Senator Byrd. An increase of $85,000 is proposed in the
    budget to begin habitat evaluation and monitoring. Will the
    increased funds proposed in the 1998 budget be sufficient to
    allow a custodial level of refuge operations to be established?
        Secretary Babbitt. Senator, that is a difficult question,
    because we have that question at every single unit of the
    national wildlife system. The levels of supervision and
    management at most refuges are premised on a relatively low
    visitor demand. What we are finding, of course, is that the
    visitation to refuge units is bumping up very rapidly and we
    are kind of behind the curve. So I think the answer is we think
    at the proposed level that we can protect the resource. It is
    not ideal.
        Senator Byrd. What level of funding would be necessary to
    establish a base staff located closer to the refuge and begin
    the necessary activities associated with managing a refuge,
    habitat protection, monitoring of fish and wildlife
    populations, visitor contacts, and development of partnerships,
    and so on.
        Secretary Babbitt. Senator, I would have to answer that in
    writing, which I would be happy to do.
        [The information follows:]

                     Canaan Valley National Wildlife Refuge

        New refuges progress through different activity levels as
    staff, land, and facilities are acquired over time. New refuges
    start at a custodial level of operation, providing protection
    and preservation of a limited number of public trust resources
    as directed by the station's establishing legislation. Staff
    initially focus on habitat stabilization, biological
    inventories, and development of partnership activities with the
    local communities to support public use and biological
    management goals. A custodial station has up to three staff, a
    refuge manager, maintenance worker, and an administrative
    assistant and may operate from local rented space, or a
    remodeled building purchased in the course of land acquisition.
        Initial start up costs include funds to develop a
    Comprehensive Management Plan, with full public involvement,
    baseline biological and Archaeological Resources Protection Act
    (1979) surveys, as well as office furnishings and refuge signs.
        Base funding for Canaan Valley NWR was created by leaving
    positions vacant at other refuges. Delayed hires at most
    stations have ``spread the pain out,'' primarily having an
    impact on public use and habitat restoration programs. Base
    funds cover only the Refuge Manager's salary and other small
    office expenses. The office is co-located with the West
    Virginia Field Office, 35 miles from the refuge in Elkins, WV.
        The Service has identified $500,000 as the level of funding
    needed for Canaan Valley NWR to operate at full capacity. This
    level of funding would enable the refuge to hire a maintenance
    worker, a refuge operations specialist, an administrative
    assistant, and an outdoor recreation planner. It would provide
    basic biological equipment, vehicles and office furniture. With
    these funds the refuge staff would gather basic biological data
    necessary for the development of a Comprehensive Management
    Plan, and archaeologists would conduct an initial
    Archaeological Resources Protection Act survey. The funds would
    also provide information kiosks and designated parking areas
    for hikers, wildlife watchers, and hunters. The funding would
    enable the Service, with assistance from the State, to
    establish a more fully functioning refuge by protecting unique
    natural resources, providing for appropriate public use, and
    educating the local community and tourists alike about the
    wetland and wildlife values of Canaan Valley.

                             canaan valley funding

        Senator Byrd. If the budget deal provides additional
    resources but directs them to land acquisition only, how would
    the Department manage the additional responsibilities that
    accompany the owning of land if increased operational dollars
    are not forthcoming in the next several years?
        Secretary Babbitt. Senator, it depends on the nature of the
    land acquisition. To the extent that we are acquiring in-
    holdings in existing units, it does not necessarily translate
    into additional administrative expense. To the extent that we
    deal with the New World Mine issue at Yellowstone, that gets
    folded into the base of administration in the Gallatin National
    Forest. To the extent that we do the headwaters deal in
    California, well, I do not know. That would probably be an
    additional expense. I think it depends very much on the nature
    of the land acquisition and whether or not you are creating a
    new unit or simply folding into an existing one.

                          harper's ferry national park

        Senator Byrd. What is the status of the recovery efforts at
    Harper's Ferry?
        Secretary Babbitt. Senator, we are moving along pretty
    well. I was up there with Mr. Stanton some months ago, and it
    is by no means finished. But I believe we have sufficient
    appropriations to in fact finish the job.

                           george washington parkway

        Senator Byrd. In response to concerns about safety along
    the George Washington Parkway, and I drive it every day, twice,
    the National Park Service announced a plan to proceed with a
    number of improvements intended to improve safety, and they are
    certainly needed. What is the status of the Park Service's
    efforts to make some of these safety improvements, and have the
    necessary concurrences been obtained so that the work can
    proceed?
        Secretary Babbitt. Senator, I believe we are under way with
    the median modifications--that is the barriers. I do not know
    whether they are jersey barriers. I am not sure it will be nice
    stonework.
        Senator Byrd. Yes; that work is under way.
        Secretary Babbitt. That is under way. I think we are OK on
    that front. We are also stepping up patrols out there, because
    for reasons I do not fully understand it is a little out of
    hand. I do not know why that situation developed, but we are
    attempting to do both things, get the median barriers up and
    increase the patrols.
        Senator Byrd. What funding is necessary to address the
    safety concerns in a more permanent manner?
        Secretary Babbitt. Senator, I cannot answer that. I would
    be happy to do that in writing.
        Senator Byrd. Very well, if you please.
        [The information follows:]

             George Washington Memorial Parkway Safety Improvements

        The George Washington Memorial Parkway needs approximately
    $90 million to complete all safety and rehabilitation
    improvements. This estimate is based on an engineering study of
    the George Washington Memorial Parkway completed by the Federal
    Highway Administration in 1989. The estimated cost for
    improvements in that study totaled $95,443,832. This figure
    includes the cost to make improvements between Spout Run and
    Theodore Roosevelt Bridge at $6.2 million dollars and permanent
    safety improvements to the roadway from Spout Run to Route 123
    ($16 million), the area where most of the accidents have
    occurred. The 1989 study will be updated soon to more
    accurately reflect the needs and costs since it has been almost
    10 years since the study was last completed.
        The 1989 study recommended a variety of improvements and
    rehabilitation that is too lengthy to include. The study is
    three volumes long and upon request a copy can be made
    available in a matter of days.
        Finally, additional operations funding in the amount of
    $650,000 is also needed to increase law enforcement patrols by
    U.S. Park Police from three patrol units to five. This will
    enable the Park Police to hire an additional 10 officers to
    fill critical personnel needs which currently exist at the
    George Washington Memorial Parkway station. A more consistent
    police presence would be maintained and monitoring and response
    to incidents will be increased.

                      eastern shawnee tribe trust petition

        Senator Byrd. Mr. Secretary, thank you, and I want to thank
    the chairman for yielding to other members. It goes to show how
    much of a responsibility the chairman really has when he stays
    and listens to all the other members and then has to pose his
    questions at the last. Thank you very much.
        Senator Gorton. Thank you.
        Senator Bond.
        Senator Bond. Thank you very much, Mr. Chairman.
        Mr. Secretary, what is the current status of the trust
    petition of the Eastern Shawnee Tribe with respect to the land
    in Missouri?
        Secretary Babbitt. Senator, it is under consideration in
    the Bureau of Indian Affairs.
        Senator Bond. Now, what does that mean? Are you going to
    have--is the decision going to be made there, or are you going
    to make the decision at your level?
        Secretary Babbitt. Senator, let me say the decision will
    not be made without my careful attention in the device and
    input.
        Senator Bond. What are the key factors that you as
    Secretary must take into consideration in acting on a petition
    such as this one?
        Secretary Babbitt. Senator, the key factor, of course, is
    the applicable laws enacted by this Congress. I know you do not
    take much consolation in that because the laws are not entirely
    consistent, and they are fairly vague.
        The real issue here, it seems to me, is of a law that
    relates to the acquisition of land to be taken in trust for
    gaming purposes. If those acquisitions are made after a cutoff
    date in the law, I believe that gubernatorial concurrence is
    required.
        Senator Bond. Does it also require reference to the views
    of other public officials and the constituents in the area?
        Secretary Babbitt. Senator, there is a series of
    regulations that the Bureau uses in assessing it, and I believe
    that is in fact one of the written criteria in the regulations,
    yes.
        Senator Bond. Is it of significance that there are no
    recognized Indian tribes in Missouri, no land-based casinos in
    Missouri, and the Missouri constitution does not allow land-
    based casinos? Is that a relevant consideration?
        Secretary Babbitt. There is not a specific criterion of the
    nature you describe, but I think it all falls into the Bureau's
    obligation to assess the opinions of the affected community.
        Senator Bond. In our prior discussion, we talked about the
    desire of the Missouri congressional delegation, particularly
    my colleague Senator Ashcroft, and the Congressman from the
    area, Congressman Roy Blunt, to meet with appropriate people in
    the Department of the Interior prior to a final decision. Can
    you give us some idea when would be the appropriate time for
    such a meeting? When will the matter ripen to the stage that we
    could present our case to the Department?
        Secretary Babbitt. Senator, you are speaking to the
    appropriate official to meet with, and I have committed to you
    that I will do that. I will get back to you in writing about
    timelines. This issue is not at the front of the pipeline right
    now, but I will give you plenty of notice, and we will have a
    chance to discuss this.
        Senator Bond. Good.
        Mr. Secretary, I understand after all the discussions we
    have had, the many, many diverse issues that you have to deal
    with. And frankly, having talked with several of my colleagues
    both who serve on this subcommittee and elsewhere, I realize
    how serious a question this is in many States. And I can tell
    you that having visited the area concerned around Seneca, MO,
    and areas around Nixa and Christian County where there have
    been other purchases by Indian tribes, the fear, the concern,
    and the outright opposition of the people in those areas to
    what they view as a real and serious threat to the quality of
    their life makes this a top priority for me. And from what you
    have said, and I understand that the statute is vague and not
    consistent, I look forward to an opportunity to work with my
    colleagues to draft an improvement to that statue so that with
    all of the other challenges you face you will not be forced to
    apply what may be a vague or inconsistent statute in matters
    where the whole lifestyle of the community, the well being of
    the community, is at risk.
        I think legislation clarifying, tightening up, and making
    clear the rights of the people to be free of casino gambling is
    something that we should seek to achieve. We would welcome your
    input and your guidance on doing it, but I think this is so
    serious that we also must pursue a legislative solution, based
    on what you have said.
        Secretary Babbitt. Senator, I would only add that you
    should also be working closely with the Governor, because he
    does have a veto power under the statute.
        Senator Bond. I have no doubt that he will use that.
        Thank you very much, Mr. Chairman and members of the
    committee, I appreciate the time.
        Senator Gorton. Senator Reid.
        Senator Reid. Mr. Chairman, I would also just give a word
    of advice to my friend, Senator Bond, before he leaves. Good
    luck with the legislation. We have been trying that for a lot
    of years.

                                  nevada land

        Mr. Secretary, I say to everyone here Senator Stevens
    lamented the fact that he would wind up with 63 percent of his
    State owned by the Federal Government. Of course, as you know,
    87 percent of the State of Nevada is now owned by the Federal
    Government.
        Mr. Secretary, I am not going to go into the many things
    that I think have occurred during your tenure as Secretary of
    Interior that have been helpful to the State of Nevada. You
    have been very good to the State of Nevada, and I acknowledge
    that and appreciate it. I have enjoyed working with you. But I
    do say that my concern, and I would like to direct your
    attention and the committee's attention to this, is that we
    have some things that we need to look at on a funding level.

                        nevada bureau of land management

        I am very concerned about the Bureau of Land Management in
    the State of Nevada. I am concerned because we have the land
    and realty fund on a national level being reduced, and as you
    know, with the rapidly growing area of Las Vegas, we simply
    have not been able to meet the demands of the people in
    southern Nevada who need things done by the Bureau of Land
    Management. It is overwhelming, and if there is one negative, I
    get more complaints about the Bureau of Land Management in Las
    Vegas than I do the Internal Revenue Service, and the big
    complaint is they do not have people to do the work.
        Processing is behind in not a matter of weeks, months, but
    years, and I have tried to work with the State office about the
    understaffing, and this is a quote, ``they just do not have
    enough funds for additional people.'' But I would direct the
    Secretary's attention to the fact that there the State office,
    the office 500 miles from Las Vegas, has been increased by $2
    million, while Las Vegas has not been.
        So I would ask that you would personally take a look at the
    misapplication of funding of the Bureau of Land Management in
    Las Vegas. Would you do that?
        Secretary Babbitt. Certainly.
        [The information follows:]

                     Funding Allocations to Southern Nevada

        Recognizing the importance of being responsive to the
    increasing demands for services in southern Nevada, the Bureau
    of Land Management has taken a number of positive steps
    outlined below:
        Organization and Budget.--Through the Nevada reorganization
    in 1996, the administration of about 4.3 million acres of
    public land in what was formerly the Caliente Resource Area of
    the Las Vegas Field Office was transferred to the Ely Field
    Office. This had a very positive effect on the Las Vegas Field
    Office in that there were no reductions in Las Vegas personnel
    as a result of that change, and the Las Vegas Field Office
    could then focus its efforts on urban issues. Between fiscal
    year 1995 and fiscal year 1997, the appropriated budget for the
    Las Vegas Field Office was increased by 22 percent. An
    additional $2 million in contributed funding was also utilized
    to support the Las Vegas Field Office during that timeframe.
        Recreation Program.--Las Vegas is initiating fee collection
    at the Red Rock National Conservation Area. One hundred percent
    of the revenue that is generated at the fee site will be
    returned to the Las Vegas District to augment its resources for
    management of the recreation program.
        In fiscal year 1997, $539,000 was appropriated for the
    remodeling and upgrading of facilities at the Red Rock Visitor
    Center. Some of this work being completed with this funding
    includes remodeling of the visitor exhibit, audio tour
    replacement, access road enhancement, gates and new signing,
    and computer system upgrade. The existing restroom will be
    remodeled and a new restroom facility added in 1998. Design
    work has been completed and a plan approved for the phased
    construction of a new Visitor Center that will enable BLM to
    accommodate the increasing public use of the facility. Initial
    work on that facility is expected to begin in 1998 pending the
    availability of construction funding.
        Partnerships continue to play a key role in the public
    services provided at Red Rock. A partnership with the Clark
    County School District has allowed BLM to utilize local
    teachers in providing interpretive programs for area students.
    The Friends of Red Rock volunteer organization provides
    valuable assistance to BLM in areas such as signing and trail
    maintenance and construction. The Red Rock Interpretive
    Association, which is working with BLM to develop a new
    visitor's exhibit, continues to play a very important role in
    providing quality visitor information. Improvement of the space
    for the Interpretive Association is a very high priority for
    BLM at the Visitor Center.
        Lands Program.--The Las Vegas Field Office has one of the
    BLM's most complex land and realty programs, given the
    pressures resulting from the rapid growth in population and
    associated demands for public land. Much of the casework
    involves complicated legal issues which frequently require
    close coordination with the regional solicitor's office.
        Seven new positions have been added to the lands staff in
    the Las Vegas Field Office. Four of those positions have
    recently been filled, and selection is pending on the remaining
    three. In addition, Nevada Power has placed an individual in
    the Las Vegas office full time to assist in the processing of
    right-of-way applications. Las Vegas will be looking to extend
    this opportunity to other entities that have numerous
    applications pending and who may want to assist us in
    expediting the processing of those actions. Las Vegas also
    continues to work with its major clients to prioritize pending
    workloads, so that BLM can be responsive to their individual
    needs.
        Significant progress continues to be made in the processing
    of lands transactions such as exchanges and Recreation and
    Public Purposes leases to meet the growing demand for land for
    community development, schools, and parks. A moratorium was
    placed on new land exchanges in fiscal year 1997 to enable Las
    Vegas to concentrate its efforts on six pending high priority
    exchanges. One major land exchange has been completed, as have
    the first phases of two others. Close work with Clark County
    and the other local governments has resulted in increased
    coordination on land tenure adjustments, data sharing for GIS,
    flood control and other right-of-way needs.
        In anticipation of continuing demands for the disposal of
    lands in the Las Vegas valley, all lands identified for
    disposal in the land use plan have been segregated from mineral
    entry. Similar action is being taken for public lands in the
    Laughlin and Mesquite areas. The Las Vegas office is also
    working hard to meet the increasing needs of the local
    government and the public for sand and gravel for construction
    purposes.
        Process improvements (e.g., programmatic environmental
    assessment, cultural resource agreement, desert tortoise
    agreement) continue to be developed within the lands program to
    expedite case processing and meet customer demands. Increased
    emphasis is being placed on the use of outside consultants in
    the preparation of environmental work. In addition, other
    agencies such as the Forest Service and Fish and Wildlife
    Service are being tasked with some of the work required to
    process lands transactions such as exchanges where they are the
    beneficiary.
        Las Vegas expects to have achieved a 50-percent reduction
    in right-of-way case backlog by the end of this year. This has
    been accomplished through the diligence of the current staff as
    well as the efforts of several individuals who were temporarily
    detailed from other BLM offices to assist. In addition, a GS-13
    employee with extensive realty experience was assigned to the
    Las Vegas for about a year. During fiscal year 1996, $200,000
    was added to Las Vegas' budget to fund these details. State
    Director priorities for fiscal year 1998 provide for continued
    assistance from other offices as necessary to further reduce
    the backlog of realty actions.

                wild horses program funding versus parks funding

        Senator Reid. I would also say that one of the things, Mr.
    Secretary, that just--I do not know how else to say it other
    than we spend $17 million a year, and I say that to the
    committee, $17 million a year on wild horses; over 10 years,
    $170 million. We have problems throughout government dealing--
    and I understand the importance of wild horses and how
    difficult the problem is to work with, and I am not diminishing
    the importance, but we have people--people--that are suffering.
    We have problems in our national park in Nevada, in our
    recreation areas, people do not have places to go to the toilet
    in our recreation areas and our national parks.
        I have been trying to get a few dollars each year out of
    this committee so that we can put in new toilets. I hate to
    harp on this subject, but when you have an area that is growing
    by 7,000 people a month and they are going up into Mount
    Charles and Red Rock and these other recreation areas that we
    have a responsibility to take care of, and I explained to them
    we are spending $17 million a year on horses, wild horses, and
    we cannot provide money for people to take care of their basic
    needs, something is wrong with the process.
        I do not know what we are going to do. I have devoted
    tremendous amounts of my time to this wild horse program. We
    tried these sanctuaries for them. That was a big flop. We have
    tried doing something on birth control of horses, and that was
    also a flop. And so for $17 million a year, we have got to take
    a look at this program. It just simply is a failure. It is not
    working. And I know we are now trying to auction the horses,
    and that may work a little better, but without going into a lot
    of detail here today, we need you, this Interior Department, to
    give us some relief on this horse problem.
        The reason I am so concerned is the vast majority of the
    horses, maybe as many as 80 percent of the horses, are in
    Nevada. And we did not get nearly that much of the $17 million
    spent there. I think frankly a lot of the $17 million goes to
    other programs than for the wild horses.
        So I would hope that we would take a look at the inequality
    of the distribution of moneys we passed with this committee
    last year and ask you to come back with a report as to why the
    inequality was so pronounced. That was knocked out in
    conference, but I think in fairness you still should have come
    back to this committee with that information.
        I have asked a series of questions, rambling in nature, as
    much as I hate to acknowledge it, but these are concerns that I
    have that really need your personal focus.
        Secretary Babbitt. Senator, I will do my best to respond.
    The wild horse and burro issue is very simple. These are very
    prolific creatures. The fertility rate among the horses in your
    home State of Nevada is approximately 18 percent.
        Senator Reid. We have some people that are prolific, too,
    and they need some money, too.
        Secretary Babbitt. Well, the horse issue is very
    impressive.
        There are only two ways of dealing with this issue that
    have proven to be acceptable to the public, adoption, which is
    a very complex and very expensive process, and contraception
    which we are struggling with. I mean, surely, we ought to be
    able to find an effective contraceptive agent. I will do my
    best to personally see if I can have a look at these issues.
    They are complex.
        [The information follows:]

                          Wild Horse and Burro Program

        The Bureau of Land Management places a high priority on
    ensuring that appropriated funds for the wild horse and burro
    program be expended in direct support of the program. In
    February 1997, the Office of the Inspector General (OIG)
    released its report on ``Expenditures Charged to the Wild Horse
    and Burro Program, Bureau of Land Management'' (No. 97-I-375).
    The purpose of the report was to review and determine whether
    the BLM expenditures charged to the wild horse and burro
    program were spent for activities related to the program. In
    that report, the OIG concluded that BLM had recorded and
    generally spent funds for program purposes in accordance with
    its accounting procedures.
        In fiscal year 1997, the rangeland management; soil, water
    and air; and riparian programs provided financial support to
    facilitate wild horse and burro management. These funds were
    used to implement gatherings which will aid in restoring
    rangeland health.
        Nevada currently provides habitat for approximately, 56
    percent of the wild horses and burros living on public lands
    (1996 national population: 42,138; 1996 Nevada population:
    23,483). This percentage has decreased during the past five
    years as Nevada makes progress on reducing wild horse and burro
    populations to within appropriate management levels. Nevada
    typically is funded to remove 66 percent of the total excess
    animals removed each year Bureauwide. In all states except
    Nevada, the wild horse and burro funding covers the cost of
    field management, gathering, preparing the animals for
    adoption, and adoption. Nevada receives funding for the
    management of wild horses and burros on the ground and for
    gathering of excess animals. The costs for preparing Nevada
    wild horses and burro for adoption and adopting them are born
    by other offices. In particular, the Eastern States Office
    adopts virtually all of the excess animals removed from Nevada
    rangeland.
        Because of the large population of wild horses and burros,
    Nevada has been and will continue to be the focal point of the
    program. During the past five years, all BLM funded research on
    fertility management, development of a population model and
    studies of birth and mortality rates have been conducted in
    Nevada.

                                funding problem

        Senator Reid. Without airing all of our linen here before
    the committee, I also would ask you to take a look at this
    funding problem we have in the State. It is just simply unfair,
    unfair to the business community and southern Nevada, and I
    think unfair to the Federal Government to get so much bad
    feeling as a result of I think a misapplication of funding.
        Senator Gorton. Thank you.
        Senator Campbell.
        Senator Campbell. Thank you, Mr. Chairman. I have a couple
    of questions, but time is running on. I would like to submit
    them to the Secretary, concerning PILT and MMS.
        Senator Reid. Would the gentleman yield? I also ask
    permission to submit a number of questions in writing to the
    Secretary.
        Senator Gorton. Each member will have that right.
        Senator Campbell. I would like to associate myself with the
    comments of Senator Reid, and later on with Senator Bond, too.

                                  wild horses

        Mr. Secretary, you come from the West, and I do not think
    anybody needs to tell you how bad the wild horse problem can
    get. We have sort of a national love affair with the horses.
    Heck, we raise them on our ranch. I am sure you did, too. And I
    do not think anyone supports the kind of mistreatment that we
    have heard about or read about in newspapers, the horse
    roundups and the abuse of them when they are going to the
    killers and so on. But by the same token, you go out in that
    western country, and you said yourself, 18 percent growth rate
    per year, it is just tearing up a lot of country, and those
    wild horses, particularly stallions, can do an awful lot of
    damage, as you know.
        About 5 or 6 years ago, we recommended to the BLM that they
    initiate a process of neutering at least the stallions. And I
    do not know if that was ever even implemented, frankly, but my
    gosh, we do it on our ranch when we are raising horses, and it
    is not that big of a deal. I cannot understand the amount of
    money we are spending, $17 million a year, on this horse
    problem and it is getting bigger all the time, why we cannot
    implement that. But I just wanted to throw that in, since
    Senator Reid had brought that up.

                           tribal self determination

        I would like to say that I certainly appreciate your
    mentioning the BIA, and would hope that through your efforts
    that we prioritize those programs which help tribes become more
    self sufficient through economic enterprises. And I know that
    many tribes are doing that, with the help of the Bureau. Some
    are doing it in spite of the Bureau. But I think that is the
    new direction that they want.

                                 indian gaming

        I also would like to maybe mention a couple of things
    concerning Senator Bond's comments, I guess because I chair the
    Indian Affairs Committee. I am obviously a big supporter of
    self determination. But the issue Senator Bond is talking
    about, I really worry about it setting a bad precedent, ending
    up pitting tribes against tribes, and I think that it really
    makes the 1988 Indian Gaming Act somewhat unstable. That act
    required compacts between States and tribes, and it seems to me
    that the issue that Senator Bond was talking about is the
    equivalent of one State acquiring land in another State, and
    then annexing it for the purpose of starting a casino, and
    there is just something wrong with that, and I hope you take a
    very careful look at that and recognize it could create some
    real problems of tribes trying to leapfrog over each other,
    strictly buying land or getting it in whatever way, putting it
    in trust for the purpose of starting a casino in downtown
    Minneapolis or somewhere else. I think that that could create
    more problems than we want to deal with.

                                  rim rock run

        I know you are involved all the time in some very, very
    difficult issues that require an awful lot of study and a lot
    of difficult decisionmaking. But I had one that is not really
    probably specific or urgent on your list, but it is on ours.
    Senator Allard and I are going to have a meeting with the
    interim head of the Park Service this Wednesday concerning it,
    but I would like to make you aware of it and see if I could get
    your help on it.
        In Colorado, in the Colorado National Monument, every year
    for over the last 10 years there has been a marathon run called
    the Rim Rock Run, and it is similar to the ones that are done
    in many other places. Here in the District of Columbia we have
    the Marine Corps Marathon and in Hawaii they have the Iron Man
    Marathon, and these things are not really uncommon. The Park
    Service has lent themselves to these things a number of times.
        Well, just this year, rather unexpectedly, the
    Superintendent decided that this run was not within the mission
    of the Park Service, and denied the application to the runners
    that put this run on. This is in Colorado National Monument
    near Grand Junction. It has been done many, many times, has
    terrific support by the community, and is a great attraction.
    It does not damage or degrade the area at all, as near as I can
    tell, and what we are going to ask is to try to find a solution
    to this. We do not want to do something that is not in keeping
    with the Park Service, but since this is done very often we are
    going to ask the head of the Park Service if he would give them
    a 1-year conditional approval to run it this year, and on the
    condition that the runners come up with some kind of a plan,
    submit a plan, that is compatible with the Park Service for any
    succeeding permits to run it. Is that something you could
    support in giving us conditional 1-year interim approval?
        Secretary Babbitt. Senator, that seems like an entirely
    reasonable approach. I think you are correct that this is not
    an issue of degrading the park resources. As I understand it,
    this marathon is being run on the main road outside of Grand
    Junction.
        Senator Campbell. On the pavement, that is correct.
        Secretary Babbitt. And I think what the Superintendent was
    concerned about was simply shutting down the access to the
    public for the time that the marathon was run. I concede that
    that is the only issue.
        Senator Campbell. And that may be true. It might for a few
    hours. In that country it is great for runners and cyclists. As
    you might guess, the State of Colorado, as an example, just
    about 100 miles from there, going from Durango over the top of
    the Red Mountain Pass, they close the State highway for a half
    a day for a bicycle marathon. It does not seem to upset many
    people. I mean, the number of people that are attracted to it
    and are enjoying it far outweigh the few people that might have
    been discomforted.
        Secretary Babbitt. As long as they are not doing it for
    motorcycle marathons.
        Senator Campbell. Unfortunately, they are not given the
    same kind of consideration, but bicycles and running seem to
    get it. But I did want to ask you that, and I wanted you to
    know that this is not a permanent thing, it would be just a 1-
    year conditional access to it so we can get this thing done
    this year and then sit down when we have more time to try and
    find a solution that is compatible with both the Park Service's
    mission and to see if we could keep that run going.
        Secretary Babbitt. Senator, that is a reasonable request. I
    would be happy to join you in petitioning the independent
    sovereign nation of the National Park Service. [Laughter.]
        Senator Campbell. Thank you very much, Mr. Secretary.
        Thank you, Mr. Chairman. That is the only question I had.
        Senator Gorton. Senator Bumpers.
        Senator Bumpers. Thank you, Mr. Chairman.

                          revised statute 2477 history

        Mr. Secretary, first of all, let me say that I regret being
    late this morning. I understand I missed a very interesting
    question and answer session. And I just want to say that you
    are on the side of the angels. I know that the administration
    does not intend to back away from their opposition to the
    Revised Statute 2477 concept, and to remind you that we came
    within two votes of taking that position in the U.S. Senate.
    Because of extrinsic matters that had nothing to do with that,
    we lost by two votes. As I say, I know you are going to hang
    tough on that.

                               budget resolution

        On another matter, the budget committee has reported out a
    budget. This budget does not make any reference to what so-
    called corporate welfare programs, or corporate loopholes, are
    going to be closed to offset $50 billion of the gross tax cuts.
    To rephrase it so the record will be clear, it is my
    understanding we are going to cut taxes by $115 billion gross.
        Senator Gorton. $135 billion.
        Senator Bumpers. Oh, that is right, $135 and a net of $85,
    and the difference is going to be made up by reinstating the
    airline ticket tax and another $20 billion from somewhere.
    There is no reference in the budget as to what those might be,
    not even the airline ticket tax.

                                mining royalties

        I assume that during the negotiations between Senator
    Domenici and some of his colleagues with the President, at some
    point you were called upon for your input into that whole
    process. I am curious as to whether or not, if you know,
    reclamation fees, mining royalties, elimination of the
    depletion allowance, maintenance fees, I wonder if any of those
    things were discussed, and where we are going to find this $50
    billion.
        Secretary Babbitt. Senator, I really do not know the answer
    to that question. We have had, obviously, continuing
    discussions with the Office of Management and Budget about the
    fiscal implications of reforming the Mining Act of 1872. I am
    not entirely clear how that translates into the so-called
    razors in the budget agreement.
        Senator Bumpers. The President's budget requested a 5-
    percent net smelter royalty on unpatented land which is worth
    $175 million. The President also asked for an extension of the
    claim in maintenance fees, which is worth $135 million, and
    elimination of depletion allowance which is worth $468 million.
    Now, if the President asked for those things in his budget, it
    seems only reasonable he would want those items to be used when
    determining where the $50 billion in loopholes were going to be
    closed. Would you agree with that?
        Secretary Babbitt. Absolutely.
        Senator Bumpers. And you agree with it?
        Secretary Babbitt. The time is surely at hand for dealing
    with the necessary changes of the Mining Law of 1872.
        Senator Bumpers. In all fairness, Mr. Secretary, a number
    of Senators from Western States have told me, and hopefully we
    are going to meet this week or possibly next week to sit down
    and see if we can reach some sort of an accommodation on that.
    I do not want to be derogatory or anything, but they seem
    really genuinely concerned about trying to work out a solution
    to this, and certainly I am going to operate in good faith, and
    I trust that they are, too, and perhaps we will be able to
    resolve something.
        Now, my bill, as you know, adds a reclamation fee which you
    did not ask for. That is worth $750 million over the next 5
    years.
        Well, Mr. Secretary, I am not going to belabor this. I
    think you are doing an outstanding job. Your tenacity on
    Revised Statute 2477 lands, on mining, on mining fees,
    royalties, reclamation, all of those things, is most admirable.
    And I hear comments around here, well, I do not trust the
    Secretary. I trust you implicitly and I think you are doing a
    fine job.
        Secretary Babbitt. Thank you.

                           hot springs national park

        Senator Bumpers. And finally, let me just say, Mr.
    Chairman, that I have about three parochial questions.
        Senator Leahy. What? What? In this committee? A parochial
    question. [Laughter.]
        Senator Bumpers. Do not go blabbing that. [Laughter.]
        Hot Springs National Park is, I think, the oldest national
    park in America. They have approximately 55 buildings there.
    They have had no significant increase in operations funding in
    the past 10 years, and I am asking the chairman in his mark to
    give us some small assistance on that.

                 lower mississippi delta region heritage center

        I am also asking the chairman to help us do a feasibility
    study on something that will benefit the lower Mississippi
    delta region, and at the same time use a facility, Eaker Air
    Force Base, which was closed by the last BRAC Commission, and
    that is a small $65,000 request, to do a feasibility study on a
    possible archeological heritage center, at the site.

                       fort smith national historic site

        And finally, we have begun finally to do a rehabilitation
    project at the Fort Smith National Historic Site, the site of
    old Judge Parker's court house and old Fort Smith. It is a
    magnificent place. It is really surprising to people who see
    that for the first time how historical it is and how well kept
    it is. But we have started the first phase of that, and of
    course, the second phase we hope to begin. We hope to get the
    money in 1998 to do the second phase at $3.4 million.
        I will submit questions on those three items to you in
    writing, and ask for your comments.
        Secretary Babbitt. I would be happy to respond.
        Senator Bumpers. I will copy you also with a letter, Mr.
    Chairman.
        Senator Domenici.
        Senator Domenici. I think it is Senator Burns' turn.
        Senator Burns. You go ahead. You are a busier man than I. I
    will not be done before about 3:30 or 4 p.m. [Laughter.]
        Senator Domenici. Thank you.
        First, I want to welcome the Secretary. Mr. Chairman, I
    also want to join Senator Byrd in commending you on the
    handling of the committee, permitting Senator Stevens, our
    chairman, to proceed first, as he did. I think we on this side,
    I hope on that side also, are rather thrilled to have Ted
    Stevens as our chairman. I would suggest that there may be a
    new era upon us with reference to the appropriators, and in
    particular our chairman, all of which I think will be for the
    better for the committee and the country.

                          budget resolution--user fees

        Mr. Secretary, let me answer Senator Bumpers' question, if
    you would not mind.
        Senator Bumpers, just by way of a quick comment regarding
    budget negotiations and negotiations with reference to user
    fees. Some of the items you talked about were user fees; those
    were handled completely separately from the issue of how do we
    get to the $135 billion for the gross tax cut. Some user fees
    are found in the proposal. Many of those recommended by the
    administration are not found in the proposal. Very few are
    found in the reconciliation instructions, because most of those
    not in the reclamation area that were asked for have been
    proposed for 8, 10, or 12 years and have never been
    accomplished. So we did not believe we ought to try them again.
        The issue of where the committees will find the money
    within the Tax Code to fill that additional amount beyond the
    $85 billion net tax cut is left totally up to the tax-writing
    committees of jurisdiction. The administration has a long list,
    and the committees have short lists, but no item was negotiated
    between the committees and the administration with reference to
    specific ways to fund that $50 billion shortfall other than $30
    billion of it would probably come from the extension of the
    airline ticket tax, which is an event that has already occurred
    for the rest of this fiscal year.

                  indian relationship with federal government

        Now, Mr. Secretary, I want to, as quickly as I can, go
    through three or four things. In the first part, and I hope you
    will take this as constructive on my part, but I frequently
    think I represent 21 States because I have my State of New
    Mexico, and then I have within my State 18 Indian Pueblos who
    govern themselves and three large Indian reservations, a
    portion of Navajo being in my State. I respect their governance
    authority and their relationship directly to the national
    government.
        I believe the Indian relationship with the Federal
    Government is the worst I have seen in my 25 years in the
    Senate. I am not laying blame, but it is in a state of chaos,
    in my opinion. Any notion that the Bureau of Indian Affairs is
    doing a better job, is false. I tell you, I just met Saturday
    for 3 hours, Senators, with 15 of these Indian groups. There is
    a unanimous absolute--everybody agrees that the Bureau of
    Indian Affairs is in shambles.
        I am not going to go beyond these general statements other
    than to urge that you do a couple of things: Mr. Secretary, you
    and the President desperately, desperately need an Assistant
    Secretary in charge of Indian Affairs. You need to send us
    somebody quickly. If you need help from Republicans, you might
    ask for suggestions. I told the tribes it probably has to be a
    Democrat. They raised their hand and said why? We need a
    manager, they said, of high, high repute in that job.
        They are even talking about whether the Department is so
    big that BIA gets the appropriate attention, and whether the
    Secretary could even give BIA the kind of attention it
    deserves. Vacancies are all the way up and down the Bureau of
    Indian Affairs. I do not know, Mr. Chairman, if you are now
    aware that the rules of the Bureau of Indian Affairs are found
    in 43 volumes of Bureau interpretations, by number, and they
    would probably stretch from you to the end of this table if you
    put them side by side.
        Now, these people that run the Indians' business can find
    anything to satisfy anything, or to say the opposite, within
    these 43 volumes. In fact, the Indians are so confused they
    have asked us to repeal them all--just pass a bill and repeal
    them all.
        I do think we did a couple of things in the budget
    agreement, Mr. Secretary, that are helpful. I do not know
    whether our chairman likes it, but we did. If anybody is
    wondering at whose suggestion, I will tell you, at my
    suggestion we made the $757 million in tribal priority funds an
    absolute priority that the leadership says, Mr. Chairman, you
    have to fund in your allocation--out of your allocation.
        When we told that to the Indian people, they said that is
    not interesting. If we were to ask the Bureau of Indian Affairs
    what our share of it is and what we are supposed to get, they
    told me, Mr. Secretary, that nobody would be able to tell them,
    or come even close to telling them what they are going to get
    out of this $75 million increase in this fund.
        I can drop the subject at this point and say I was pleased
    to tell you this. I hope I did not tell it to you in a way that
    is intended to fall disproportionately on your shoulders. I did
    not intend it that way. The whole process has got to be fixed.
    It will not be fixed until somebody in the administration,
    perhaps your new Assistant Secretary, just decides that they
    have got to take on reform, really do something with it, and
    take a lead.

                                 indian schools

        I will give you examples of some things you would be
    embarrassed about--the status, physical status of the schools
    we run, which serve only about 14 percent of the Indian kids.
    The backlog of facilities needs is enormous, and the condition
    of many of the schools are so inferior that if public school
    kids went there, they would close them down. Somebody has got
    to grab the attention of the country and the Congress and get
    something done in these areas.

                          southwest willow flycatcher

        I want to ask you if you would do me a favor on another
    issue. In the State of New Mexico under the Endangered Species
    Act we have a threatened or endangered songbird called the,
    Southwest Willow Flycatcher. What has actually happened is that
    the Fish and Wildlife Service has no specific recommendations
    about this songbird, in response to BLM's section 7
    consultation. The Bureau of Land Management is negotiating with
    one active group, Sam Hih in New Mexico, whom you know, and his
    group. They are negotiating with them, and nobody else is in
    the negotiations. This group is suggesting at least 5 miles
    around every songbird nest--I see some people nodding
    incredibly in the audience who know something about it.
        I would merely ask if it is possible that BLM would also
    bring in the other interested parties as they talk about this
    particular songbird. Would you give that some consideration,
    Mr. Secretary?
        Secretary Babbitt. Certainly.
        Senator Domenici. I would very much appreciate that.

                             u.s. geological survey

        With reference to other things in my State, I want to thank
    you and the USGS. You alluded to that when you were speaking of
    the macro things that you try to help with, and we are
    cooperating in putting up our money. USGS is adding to its
    reputation by going down into this huge basin that supplies
    water to Albuquerque to try to tell us and everybody what its
    real nature is. I thank the chairman for helping us with that.
    U.S. Geological Survey deserves my highest accolades; and they
    are very professional.

                         petroglyphs national monument

        I have a couple of things that worry me: Petroglyphs
    National Monument, and I will not talk about the road
    legislation. We will do that at another time. This park unit
    has been pending for a long time in terms of land acquisition,
    and you asked for nothing in this budget. The chairman will
    give me some money, but maybe your Department could work with
    OMB. Maybe they leave me out, because nothing in New Mexico got
    funded in the budget. I do not know, it is very interesting.
        Senator Gorton. Except by the chairman.
        Senator Domenici. Except by the chairman. Maybe it is
    because I am not your favorite Senator or you are not my
    favorite cabinet member, I do not know.
        Secretary Babbitt. Senator, you are tied for my favorite
    Senator with 99 others. [Laughter.]
        Senator Domenici. That is what I figured, and that means I
    could very well be 100. I understand that. I will not say it is
    mutual, because I do not feel that way about anybody. But such
    things as the petroglyphs, when we get not a single
    administration request when Congress has funded it 2 or 3 years
    in a row. We have to buy the rest of that land.

                           southwest fisheries center

        We also have a Southwestern Fisheries Technology Center. It
    is 85 percent completed. You asked for no money for it. Maybe,
    again, whoever is putting the budget together, because they do
    not like it, maybe they figure our good friend the chairman
    will fund it anyway. This has not been a good year for funding
    projects in New Mexico.
        Nevertheless, I thank you, and I just want you to know that
    we are getting along pretty well in spite of it. We are coming
    out of this appropriations process pretty well, even without
    the recommendations finding themselves in your budget.

                             secretarial accolades

        I am going to leave on a positive note, Mr. Secretary. You
    feel very strongly and have certain philosophies on governance.
    I do want to say to you, I believe, considering that that is
    how you feel, that you have become much better at managing
    those kinds of events. I think you have been more inclusive as
    you progress through this tenure. I thank you for that--
    everything from range management to other things that you and I
    do not see eye to eye on. I think it has come to the point
    where everybody understands that there is not just one group of
    Americans that is interested in solving these problems.
        Thank you very much, Mr. Chairman.
        Senator Gorton. Senator Leahy.
        Senator Leahy. I will try to follow the example of my
    friend from New Mexico, and I will try not to use the full 5
    minutes allotted for the questions. But I found the first 20
    minutes of it very instructive, Pete, and I appreciate it. I
    learned a lot. I will know what to do with our Indian problem
    now in Vermont.
        Senator Domenici. Well, you barely made it, so do not
    complain. [Laughter.]

                         connecticut river partnership

        Senator Leahy. I understand that I missed some of the
    excitement before. We do not have those problems in Vermont.
    And I want to thank the Secretary for a lot of the attention he
    has given to States in the Northeast, and some of the areas
    important to us, especially your help in ensuring the
    Connecticut River Partnership has continued to receive support
    from the National Park Service. That has been important to a
    lot of us. Vermont has only one national park, but the rivers
    and trails program and the partnership it supports are
    essential for protecting our special areas, and it improves
    access to Vermont's trails, lakes, and rivers.
        The Connecticut River Partnership demonstrates the
    commitment that local communities have to protecting the
    Connecticut River watershed. In fact, I believe the river has
    been nominated for recognition as an American heritage river
    under the President's new initiative. I want you to know I
    wholeheartedly endorse that. The Connecticut River, as you
    know, comes down and divides between Vermont and that eastern
    State, New Hampshire. It keeps our western State of Vermont
    safe. But I think you will find that both New Hampshire and
    Vermont would support it.

                        land and water conservation fund

        You have recognized the importance of the two acid
    deposition monitoring stations in Vermont, and I appreciate
    that very much, and the funding for the National Atmospheric
    Deposition Program. The land and water conservation fund is one
    I have long supported. And I see the budget agreement
    includes--or I am told--includes increased use of the fund. In
    the Northeast, we are at a significant disadvantage tapping
    into it, because we have so little public land. But when it was
    operational, the State side of the fund was critical in
    helping. And so I would urge the administration to restart the
    State side of the land and water conservation fund as part of
    an effort to bolster the fund, because it helps us protect our
    streams and our parks and our lakes and so on.

                          supplemental appropriations

        Now, we are going to pass a supplemental appropriations
    bill. I am sure there is going to be allocations for Fish and
    Wildlife Service facilities that were lost or damaged during
    the floods, and the Department is going to now start moving
    those out of flood plains. That is a policy that should be
    implemented nationwide, not just where the most recent floods
    were.

                      missisquoi national wildlife refuge

        We have only one national wildlife refuge headquarters
    sited in our State of Vermont, but it is located in the flood
    plain of the Missisquoi River--that is M-i-s-s-i-s-q-u-o-i. I
    know the reporter, the official recorder of these things, would
    like that.
        The facility floods regularly, has no insulation and
    provides minimal office space.
        In fact they have started, the two-person staff, have
    started holding environmental education programs in a boat
    shed, because the regular facility is in such poor shape. Now,
    last year, you included one-quarter of a million dollars for
    the highest priority operations and maintenance needs to
    address what is a $3.3 million backlog. So we have a $3.3
    million backlog; $250,000 was included to help out on it. By
    the time it got done, only $50,000 showed up. Can we get some
    kind of similar funding in the fiscal year 1998 budget for the
    Missisquoi?
        [The information follows:]

                      Missisquoi National Wildlife Refuge

        The proposed fiscal year 1998 operations and maintenance
    budget for Missisquoi National Wildlife Refuge is $258,000, an
    increase of $6,000 over fiscal year 1997. Of this total,
    approximately $50,000 will be spent directly on maintenance
    staff salaries or supplies and materials to perform routine
    maintenance. Missisquoi NWR, like many other refuges throughout
    the Nation, has had a shortfall in operations and maintenance
    funding which is gradually creating a substantial backlog in
    both areas. The Service plans to continue to address the need
    for maintenance and improved operational capability at all
    refuges throughout the Nation by prioritizing the needs of all
    refuges, selecting those with the greatest need for the earlier
    funding.

                                     floods

        Secretary Babbitt. Senator, I will certainly have a look at
    it and respond to you. I am not familiar with that particular
    line item in the request. But I would be happy to look at it.
        Senator Leahy. I do not expect you to know all those line
    items, Mr. Secretary. I do not know how you keep up with all
    the things you do. But I had a feeling that if it was mentioned
    at this hearing, that it might somewhere pop out. I know in the
    Senate, Senators are merely constitutional impediments to their
    staffs, and so often we will mention something that the staff
    will actually look at. So I would hope that yours might on
    this.

                                invasive species

        We also have the problem of invasive species into our
    waters. The U.S. Geological Survey has set aside $750,000 to
    address this. In our Lake Champlain, that magnificent lake that
    goes from Canada, straight down through, and separates Vermont
    from New York--you know, Vermont likes these waterways that
    kind of define who we are--we have had the problems of zebra
    mussels, which is now becoming a serious problem, because it is
    growing there, not just in the Great Lakes. We also face the
    spread of sea lamprey and water mill foil. We reauthorized the
    National Invasive Species Act to address these problems.
        Do you know offhand the amount allocated in the USGS budget
    that would go to fighting aquatic invasive species?
        Secretary Babbitt. Senator, it is a very modest amount. I
    think it is one-half million dollars or something like that.
    And that is not to deny the seriousness of the problem. I mean
    you have got purple loosestrife running wild across New
    England. The zebra mussel you have mentioned, and a whole
    variety of others. But that is the reality.
        Senator Leahy. I would mention, on Lake Champlain, if you
    could look carefully at this, outside of the Great Lakes, it is
    the largest body of fresh water in the United States. That is a
    very, very significant lake. It has one of the most remarkable
    biological systems in the lake, with all the different things,
    but we are being hurt by these particular areas. And if you
    could have your folks look at it. And I would be glad to meet
    with anybody from your office that might be doing that.
        And my other questions, Mr. Chairman, I will submit for the
    record.
        Senator Gorton. Thank you, Senator Leahy.
        Senator Leahy. Thank you very much. But if we could follow
    up on that and the Lake Champlain.
        Secretary Babbitt. Senator, I will. Thank you.
        Senator Leahy. And I am delighted you are here.
        Secretary Babbitt. Thank you.
        Senator Gorton. Senator Burns.
        Senator Burns. Is that zebra mussel an endangered specie?
    [Laughter.]
        [The information follows:]

                        Lake Champlain Invasive Species

        The Fish and Wildlife Service is involved in efforts to
    preserve Lake Champlain, as well as other lakes in the
    northeastern United States, from nonnative aquatic nuisance
    species such as the zebra mussels. The zebra mussel explosion
    has reached a critical stage that is becoming an economic and
    ecological catastrophe. Zebra mussels can have a devastating
    impact on all aquatic life, birds and mammals by changing water
    quality, disrupting the food chain and predator-prey
    relationships, and altering physical habitat.
        Zebra mussels are found throughout Lake Champlain at
    densities of 60,000 to 109,000 mussels per cubic meter, with
    some concentrations as high as 134,000 mussels per cubic meter
    which is nearly as high as populations in the Great Lakes. This
    invasive species poses a serious risk to the water resources of
    Vermont and New York. It has caused a serious economic burden
    not only to the industrial and potable water systems along the
    lake, but also to the entire ecosystem of Lake Champlain.
        The Service, other Federal agencies, Vermont and New York's
    environmental agencies, and many private organizations have
    joined in the battle to control zebra mussels in Lake
    Champlain, and have identified the control of zebra mussel as
    one of their highest priority actions. Current management
    actions have focused on controlling the mussel's attachment to
    surfaces and water intake pipes and preventing further spread.
    The Service's Lake Champlain Fish and Wildlife Resource Office
    is working with the public and private sector to develop and
    implement a Comprehensive Management Program for Nuisance
    Nonnative Aquatic species in the Lake Champlain Basin. The
    Management Program will evaluate and demonstrate zebra mussel
    control strategies in order to halt the mussel's uncontrolled
    spread and impact on the region's economy and fisheries.

                   national park service maintenance backlog

        Senator Burns. Mr. Secretary, thank you for coming this
    morning. And I have a couple of questions that I think will
    require--you will have to respond to in writing. It has to do
    with the repair work and the infrastructure of our National
    Park System. I would like some kind of report of the backlog
    that you have now, as far as infrastructure.
        I was in Glacier National Park on Saturday. We dedicated,
    or recognized, the partnership that has been formed between the
    local group and Flathead County in the restoration of the
    chalets in Glacier National Park. It was a very nice affair. We
    see that when local partnerships are formed, we can do some
    very positive things about the accommodations of people.
        You know we tend to look at parks, and we forgot that we
    are in the people business. That is just as important as some
    other things that we do.
        If you could supply me with that backlog. I would like to
    help you with that. Because we have some very serious problems
    in transportation and roads in Yellowstone Park, and we will
    try to help you with that situation.
        [The information follows:]

                                                          RECAPITALIZATION OF THE NATIONAL PARK SYSTEM
                                        [Preliminary list of unfunded capital construction needs, alphabetically by park]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Gross
                         Park                                  Project title               construction     Package        Reg.      Objective    Work type
                                                                                             estimate        number
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Acadia National Park.........................  Upgrade restrooms, water, sewer,            5,750,000          232          NAR            1            U
                                                    power.
    Acadia NP....................................  Rehabilitate historic structures.....       8,500,000          320          NAR            2            B
    Acadia NP....................................  Rehabilitate tour loop roads and           24,000,000          287          NAR            2            R
                                                    bridges.
    Acadia NP....................................  Replace visitor center and construct       16,560,000          233          NAR            4            B
                                                    park entrance.
    Acadia NP....................................  Improve McFarland Hill Headquarters..       9,960,000          234          NAR            3            B
    Acadia NP....................................  Alternative transportation modes.....       1,320,000         2006          NAR            5            R
    Adams National Historic Site.................  Rehabilitate Beale Estate............       2,020,000          108          NAR            2            B
    Agate Fossil Beds National Monument..........  Construct employee housing and              1,950,000          198          MWR            5            H
                                                    recreation facilities.
    Alaska parks (multiple)......................  Rehabilitate historic/building New          3,960,000          135          AKR            2            B
                                                    Backcountry cabins.
    AlibateS Flint Quarry NM.....................  Construct visitor contact station....       4,320,000          105          SWR            4            B
    Allegheny Portage National Historic Site.....  Staple Bend Tunnel stabilization/           3,000,000          225          MAR            3            R
                                                    development.
    Allegheny Portage National Historic Site.....  ALPO/JOFL Development Program........      11,760,000          226          MAR            5            L
    Amistad National Recreation Area.............  Construct visitor contact stations          3,000,000          117          SWR            5            B
                                                    and boat launch.
    Amistad NRA..................................  Reconstruct roads....................       2,640,000          180          SWR            3            R
    Antietam National Battlefield................  Stabilize/restore historic battle           2,400,000          315          NCR            2            B
                                                    structures.
    Antietam NB..................................  Construct new roads for scene               2,886,000          271          NCR            2            R
                                                    restoration.
    Apostle Islands National Lakeshore...........  Protect lightstation from shoreline         4,642,400          839          MWR            2            L
                                                    erosion.
    Apostle Islands NL...........................  Renovate employee quarters in               1,440,000          248          MWR            3            H
                                                    historic lightstations.
    Arkansas Post NM.............................  Construct maintenance/storage               1,200,000          116          SWR            5            B
                                                    facility.
    Assateague Island National Seashore..........  Rehabilitate historic structures/           9,000,000          263          MAR            2            L
                                                    stabilize national resources.
    Assateague NS................................  Reconstruct roads and parking, MD and       6,600,000          231          MAR            3            R
                                                    VA.
    Assateague NS................................  Redevelop parking--chnctg............       3,432,000          233          MAR            3            R
    Aztec Ruins NM...............................  Construct administrative ctr./              4,680,000          133          SWR            5            B
                                                    operations complex.
    Badlands NP..................................  Rehabilitate 30 miles of main road...      24,156,000          120          RMR            3            R
    Baltimore-Washington Memorial Parkway........  System completion project............      31,680,000         1006          NCR            5            R
    Bandelier NM.................................  Relocate facilities from Frijoles          15,700,000          214          SWR            2            B
                                                    Canyon.
    Bandelier NM.................................  Rehabilitate Ponderosa Campground....       1,320,000          109          SWR            3            L
    Bandelier NM.................................  Rehabilitate trails..................       3,600,000          210          SWR            2            L
    Bandelier NM.................................  Construct water storage and                   840,000          246          SWR            3            U
                                                    distribution.
    Bering Land Bridge National Preserve.........  Construct multiagency visitor center.       5,564,000        100NO          AKR            4            B
    Big Bend NP..................................  Rehabilitate Chisos Basin Campground.       3,200,000          274          SWR            3            L
    Big Bend NP..................................  Reconstruct major park roads.........      19,008,000          223          SWR            3            R
    Big Bend NP..................................  Construct addition to park visitor         10,680,000          114          SWR            5            B
                                                    center.
    Big Bend NP..................................  Modernize/expand Panther Junction           3,200,000          132          SWR            1            U
                                                    water system.
    Big Bend NP..................................  Relocate overhead utility lines......       4,200,000          169          SWR            3            U
    Big Bend NP..................................  Improve/expand Panther Junction             2,400,000          160          SWR            3            B
                                                    maintenance area.
    Big Bend NP..................................  Rehabilitate/expand campgrounds (RGV-       2,400,000          166          SWR            3            L
                                                    CA).
    Big Bend NP..................................  Construct resource management               2,400,000          276          SWR            5            B
                                                    facility.
    Big Bend NP..................................  Rehabilitate and expand sewage              3,200,000          278          SWR            1            U
                                                    treatment.
    Big Cypress Nat Preserve.....................  Scenic corridor visitor safety hwy.         4,800,000            1          SER            1            R
                                                    improvements.
    Big Cypress NPRes............................  ADditional lands operation facility..       1,720,000            2          SER            4            B
    Big Thicket NPRes............................  Construct park visitor center/              8,280,000          107          SWR            4            B
                                                    headquarters.
    Big Thicket NPRes............................  Construct trails, trailheads, water        13,200,000          111          SWR            2            L
                                                    access.
    Big Thicket NPRes............................  Stabilize roads......................       2,112,000          113          SWR            3            R
    Bighorn Canyon NRA...........................  Provide safe recreation area at OK-A-         254,400          222          RMR            3            L
                                                    BEH.
    Blackstone River Valley NHCC.................  Rehabilitate Slater's Mill Historic         5,400,000          105          NAR            2            B
                                                    Structures and Site.
    Blue Ridge Parkway...........................  Fisher Peak Mountain Music Center....       4,000,000          507          SER            5            B
    Blue Ridge Parkway...........................  Tunnels-lined........................       6,204,000          132          SER            3            R
    Blue Ridge Parkway...........................  Grade separations....................       3,564,000          521          SER            3            R
    Blue Ridge Parkway...........................  Resurface 25 miles of parkway........      87,912,000          503          SER            3            R
    Booker T. Washington NM......................  Construct maintenance. shop and             1,822,800          161          MAR            5            B
                                                    expand visitor center.
    Boston Afro-American NHS.....................  Complete rehabilitation of Smith            1,175,000          102          NAR            2            B
                                                    School.
    Boston Nat Historic Park.....................  Charlestown Navy Yard road safety           3,630,000          154          NAR            1            R
                                                    improvements.
    Boston NHP...................................  Rehabilitate Bunker Hill structure            859,200          106          NAR            2            L
                                                    and site.
    Boston NHP...................................  Preserve/rehabilitate historic              4,800,000          130          NAR            2            B
                                                    commandant's house.
    Bryce Canyon NP..............................  Reconstruct roads parkwide...........      25,080,000          106          RMR            3            R
    Bryce Canyon NP..............................  Rehabilitate 206 camping sites in           1,700,000          103          RMR            3            L
                                                    park.
    Bryce Canyon NP..............................  Rehabilitate visitor and education          4,400,000          125          RMR            3            B
                                                    center.
    Buffalo National River.......................  Construct Tyler Bend employee housing       2,760,000          109          SWR            4            H
    Buffalo NR...................................  Improve river camp sites, launches,        12,360,000          185          SWR            4            L
                                                    and roads.
    Buffalo NR...................................  Construct park headquarters and             5,520,000          240          SWR            4            B
                                                    visitor center.
    Buffalo NR...................................  Develop Pruitt public use/operations        1,800,000          113          SWR            4            B
                                                    facilities.
    C&O Canal NHP................................  Restore historic Monocacy aqueduct...       8,000,000          100          NCR            2            L
    C&O Canal NHP................................  Reconstruct historic wide-water               630,000           01          NCR            1            L
                                                    towpath.
    C&O Canal NHP................................  Rehabilitate deteriorating historic           660,000          101          NCR            2            B
                                                    complex.
    C&O Canal NHP................................  Restore deteriorated historic               1,800,000           29          NCR            2            B
                                                    tidelock.
    C&O CANAL NHP................................  GREAT FALLS ENTRANCE STATION ROAD....         660,000           77          NCR            3            R
    CANAVERAL NS.................................  CONSTRUCT HQ, VC, STORAGE, and              4,207,200          105          SER            5            B
                                                    EXHIBIT COMPLEX.
    CANYON DE CHELLY NM..........................  REHABILITATE CANYON ROADS............       1,200,000          172          SWR            3            R
    CANYON DE CHELLY NM..........................  REHABILITATE PARK ROADS..............       1,980,000          169          SWR            3            R
    CANYONLANDS NP...............................  REPAIR 225.4 MILES ROAD..............      16,368,000          183          RMR            3            R
    CAPE COD NS..................................  REHABILITATE EIGHT BEACH FACILITIES..       9,100,000          226          NAR            1            B
    CAPE COD NS..................................  REHABILITATE DORMITORY AND SEASONAL        11,850,000          225          NAR            1            H
                                                    HOUSING UNITS.
    CAPE COD NS..................................  REHABILITATE SALT POND AND                  4,896,000          228          NAR            2            B
                                                    PROVINCELAND VISITOR CENTER.
    CAPE COD NS..................................  REHABILITATE PARK ROADS AND PARKING..       2,640,000          210          NAR            3            R
    CAPE HATTERAS NS.............................  REPAIR/REPLACE EMPLOYEE HOUSING......       8,400,000          801          SER            3            H
    CAPE HATTERAS NS.............................  CONSTRUCT PROTECTIVE GROIN...........       2,000,000          301          SER            2            L
    CAPE HATTERAS NS.............................  RELOCATE LIGHTHOUSE..................      10,530,000          175          SER            2            L
    CAPULIN VOLCANO NM...........................  EXPAND/IMPROVE MAINTENANCE AREA......       1,800,000          154          SWR            5            B
    CARLSBAD CAVERNS NP..........................  REHABILITATE/REPLACE ELEVATOR SHAFT         2,000,000          198          SWR            1            B
                                                    STEEL.
    CARLSBAD CAVERNS NP..........................  PROVIDE CAVE HANDRAIL................       1,200,000          199          SWR            1            L
    CARLSBAD CAVERNS NP..........................  REPLACE WATER TRANSMISSION and              3,600,000          191          SWR            3            U
                                                    STORAGE.
    CARLSBAD CAVERNS NP..........................  RESURFACE ENTRANCE ROAD AND PARKING..         660,000          180          SWR            3            R
    CASTLE CLINTON NM............................  REHABILITATE CASTLE CLINTON NATIONAL       26,040,000          105          NAR            5            B
                                                    HISTORIC SITE.
    CATOCTIN MOUNTAINS PARK......................  REPLACE FAILING ELECTRICAL SYSTEM....         721,810          989          NCR            3            U
    CEDAR BREAKS NM..............................  RECONSTRUCT PARK ROADS...............       3,036,000          114          RMR            3            R
    CHACO CULTURE NHP............................  CONSTRUCT HOUSING, CAMPGROUND, WATER/      11,040,000          204          SWR            5            B
                                                    SEWER SYS.
    CHACO CULTURE NHP............................  CONSTRUCT ADDITION TO MAINTENANCE             840,000          207          SWR            5            B
                                                    SHOP.
    CHANNEL ISLANDS NP...........................  CONSTRUCT 8 EMPLOYEE HOUSES AT SANTA        3,458,400          671          WER            4            H
                                                    ROSA.
    CHATTAHOOCHEE NRA............................  CONSTRUCT DAY USE FACILITIES, TRAILS,       3,885,600          101          SER            5            B
                                                    COMFORT STATION.
    CHICKAMAUGA and CHATTANOOGA..................  RELOCATE US HWY 27 WITHIN PARK (GA)..      30,360,000          142          SER            3            R
    CHICKAMAUGA and CHATTANOOGA..................  IMPROVE PARK ROADS, SHOULDERS, and          6,732,000          102          SER            3            R
                                                    DRIVEOUTS.
    CHICKAMUAGA and CHATTANOOGA..................  REPLACE TWO BRIDGES-ALEXANDER BRIDGE        2,196,000          165          SER            1            R
                                                    ROAD.
    CHICKASAW NRA................................  IMPROVE CAMPGROUNDS..................      11,540,000          215          SWR            3            L
    CHICKASAW NRA................................  CONSTRUCT VISITOR CTR./HEADQTRS./           4,560,000          208          SWR            5            B
                                                    MTNCE. COMPLEX.
    CHICKASAW NRA................................  DEVELOP VETERANS LAKE VISITOR               2,400,000          209          SWR            5            R
                                                    FACILITIES.
    CHICKASAW NRA................................  REHABILITATE VETERANS DAM (REPAY BUR.         600,000          206          SWR            3            L
                                                    OF RECLAMATION).
    CHIRICAHUA NM................................  UPGRADE UTILITIES, HEADQUARTERS, and        1,200,000          241          SWR            3            B
                                                    CAMPGROUND.
    CHIRICAHUA NM................................  REHABILITATE MAIN PARK ROAD..........       9,372,000          103          WER            3            R
    CITY OF ROCKS NM.............................  CONSTRUCT RV CAMPGROUND, ROADS,            23,160,000          101          PNR            2            B
                                                    TRAILS, RESTROOMS.
    COLONIAL NHP.................................  CONNECT JAMESTOWN WATER SYSTEM TO             959,000          400          MAR            1            U
                                                    MUNICIPAL SYSTEM.
    COLONIAL NHP.................................  PROTECT JAMESTOWN ISLAND FROM EROSION      18,000,000          248          MAR            2            L
    COLONIAL NHP.................................  CONSTRUCT JAMESTOWN VIS. CTR. and          14,040,000          154          MAR            5            L
                                                    COLLECTION STORAGE.
    COLONIAL NHP.................................  BUILD COLONIAL PARKWAY BICYCLE and         24,000,000          249          MAR            5            L
                                                    WALKING TRAIL.
    COLONIAL NHP.................................  REALIGN PARK PORTION OF HIGHWAY 238..       3,699,600          127          MAR            5            R
    COLONIAL NHP.................................  YORKTOWN ROADS AND BRIDGES...........       4,752,000          317          MAR            3            R
    COLONIAL NHP.................................  REHABILITATE JAMESTOWN ROADS.........       1,320,000          321          MAR            3            R
    COLONIAL NHP.................................  REPAIR/REHABILITATE COLONIAL PARKWAY.      13,200,000          251          MAR            3            R
    COLORADO NM..................................  REHABILITATE 23 MILES OF RIMROCK            7,920,000          110          RMR            3            R
                                                    DRIVE.
    CONGAREE SWAMP NM............................  CONSTRUCT PERMANENT FACILITIES.......       9,000,000          101          SER            4            B
    COULEE DAM NRA...............................  EXPAND KELLER FERRY CAMPGROUND              2,400,000          203          PNR            5            B
                                                    FACILITIES.
    COULEE DAM NRA...............................  RESURFACE ROADS AND PARKING--PARKWIDE       2,040,000          266          PNR            1            R
    COULEE DAM NRA...............................  RESURFACE ROADS AND PARKING..........       1,716,000          266          PNR            1            R
    CRATER LAKE NP...............................  CONTRUCT ACTIVITY CENTER, PARKING,         60,000,000          274          PNR            2            B
                                                    AND ROADS.
    CRATER LAKE NP...............................  CONSTRUCT EMPLOYEE HOUSING AND              5,800,000          275          PNR            5            H
                                                    SUPPORT FACILITIES.
    CRATER LAKE NP...............................  CORRECT CLEETWOOD COVE PARKING              1,000,000          276          PNR            1            R
                                                    FACILITIES.
    CRATER LAKE NP...............................  RESURFACE ANNIE SPRINGS TO WEST             5,544,000          235          PNR            1            R
                                                    BOUNDARY ROAD.
    CRATER LAKE NP...............................  RESURFACE 6.1 MILES OF ROUTE 7--            1,452,000          253          PNR            1            R
                                                    PINNACLES ROAD.
    CRATER LAKE NP...............................  RESURFACE CLOUDCAP TO HEADQUARTERS          3,960,000          256          PNR            1            R
                                                    ROAD.
    CRATERS OF THE MOON NM.......................  CONSTRUCT VISITOR CENTER, ROADS, AND        5,400,000          153          PNR            5            B
                                                    UTILITIES.
    CUMBERLAND GAP NHP...........................  SYSTEM COMPLETION PROJECT............      47,520,000         1007          SER            5            R
    CUMBERLAND ISLAND NS.........................  CONSTRUCT VISITOR CENTER, EXHIBITS,         3,494,400          112          SER            5            B
                                                    UTILITIES, MTNCE. FACILITIES.
    CURECANTI NRA................................  REPLACE WATER TREATMENT PLANT AND ADD       1,729,200          272          RMR            3            U
                                                    RESERVOIR.
    CUYAHOGA NRA.................................  RECONSTRUCT RIVER VIEW RD............       1,320,000          203          MWR            3            R
    CUYAHOGA NRA.................................  RECONSTRUCT WHEATLEY ROAD............       1,848,000          206          MWR            3            R
    CUYAHOGA VALLEY NRA..........................  CONTINUE CLEANUP OF KREJCI DUMP SITE.       5,400,000          260          MWR            1            L
    DAYTON AVIATION HERITAGE NHS.................  REHABILITATE HISTORIC HOOVER BLOCK...       4,941,600          100          MWR            2            B
    DEATH VALLEY NP..............................  CONSTRUCT EMPLOYEE HOUSING AT DEATH        19,807,200          388          WER            1            H
                                                    VALLEY.
    DEATH VALLEY NP..............................  REPLACE COW CREEK MAINTENANCE               5,187,600          500          WER            1            B
                                                    FACILITY.
    DEATH VALLEY NP..............................  REHABILITATE BADWATER ROAD and SPUR        14,916,000          283          WER            3            R
                                                    ROADS.
    DEATH VALLEY NP..............................  RECONSTRUCT ROUTES 8 and 35..........      19,932,000          105          WER            3            R
    DEATH VALLEY NP..............................  SURFACE 7 MILES OF N ENTRANCE ROAD--        1,848,000          257          WER            5            R
                                                    ROUTE 8.
    DEATH VALLEY NP..............................  REHABILITATE MUD CANYON and DAYLIGHT       12,144,000          348          WER            3            R
                                                    PASS ROADS.
    DEATH VALLEY NP..............................  RECONSTRUCT/REALIGN GRAPEVINE CANYON       10,032,000          352          WER            3            R
                                                    ROAD.
    DELAWARE WATER GAP NRA.......................  REPAIR/REPLACE NEW JERSEY VISITOR USE      24,120,000          264          MAR            3            B
                                                    FACILITIES.
    DELAWARE WATER GAP NRA.......................  STABILIZE HISTORIC STRUCTURES AT 40        22,320,000          111          MAR            2            B
                                                    SITES.
    DELAWARE WATER GAP NRA.......................  REPAIR/REPLACE PENNSYLVANIA VISITOR        22,476,000          263          MAR            3            L
                                                    USE FACILITIES.
    DELAWARE WATER GAP NRA.......................  REHABILITATE WEYGADT FACILITIES and        19,200,000          319          MAR            4            B
                                                    BUILD VISITOR CTR.
    DELAWARE WATER GAP NRA.......................  REHABILITATE/REPAIR ROUTE 209 (22MI)       52,800,000          292          MAR            3            R
                                                    and 6 BRIDGES.
    DENALI NP....................................  CONSTRUCT FIRE-EMERGENCY SERVICES and       1,620,000          105          AKR            5            B
                                                    HEADQTRS. BLDG.
    DENALI NP....................................  REHABILITATE ENTRANCE AREA UTILITIES--      3,410,000          120          AKR            3            U
                                                    WATER and SEWER.
    DENALI NP....................................  RESTORE 77.6 MILES OF GRAVEL ROAD          13,200,000          258          AKR            1            R
                                                    SURFACE.
    DENALI NP....................................  CONSTRUCT TOKLAT REST STOP FACILITIES       1,120,000        100TO          AKR            4            B
    DENALI NP....................................  REPAIR 77.6 MI GRAVEL RD.............      13,200,000          258          AKR            3            R
    DENALI NP....................................  ALTERNATIVE TRANSPORTATION MODES.....       1,320,000         2007          AKR            5            R
    DINOSAUR NM..................................  RECONSTRUCT/REHABILITATE 3 FAILING         12,000,000          216          RMR            3            B
                                                    STRUCTURES.
    DINOSAUR NM..................................  CONSTRUCT MUSEUM COLLECTION/RESEARCH        4,700,000          204          RMR            5            B
                                                    BUILDING.
    DINOSAUR NM..................................  RECONSTRUCT ROADS PARKWIDE...........       9,636,000          191          RMR            3            R
    DRY TORTUGAS NM..............................  REHABILITATE PORTIONS OF FORT              14,400,000          103          SER            2            L
                                                    JEFFERSON.
    EDISON NHS...................................  DEVELOP EDISON CENTER and                  29,600,000          170          NAR            1            B
                                                    REHABILITATE LAB. COMPLEX.
    EISENHOWER NHS...............................  STABILIZE/REPAIR FARM STRUCTURES.....       8,620,000          130          MAR            2            B
    EL MALPAIS NM................................  DEVELOP MULTIAGENCY VISITOR CENTER          5,520,000          105          SWR            4            B
                                                    (PHASE 2.
    EVERGLADES NP................................  REPLACE 20 PLUS OBSOLETE WATER and         14,600,000          191          SER            1            U
                                                    SEWER SYSTEMS.
    EVERGLADES NP................................  MODIFY WATER DELIVERY SYSTEM.........      80,000,000          193          SER            2            L
    EVERGLADES NP................................  REPAVE MAIN PARK ROAD................       7,128,000          111          SER            3            R
    FEDERAL HALL NAT MEMORIAL....................  REHABILITATE FEDERAL HALL............      10,104,000          105          NAR            1            B
    FIRE ISLAND NS...............................  CONSTRUCT SUSTAINABLE STUDENT               2,800,000            1          NAR            3            B
                                                    DISCOVERY CAMP.
    FIRE ISLAND NS...............................  CONSTRUCT VISITOR CENTER, MTNCE., and       6,000,000          169          NAR            4            B
                                                    ADMIN. FACILITY.
    FIRE ISLAND NS...............................  PRESERVE/REHABILITATE HISTORIC FLOYD        3,600,000          174          NAR            5            B
                                                    ESTATE.
    FLORISSANT FOSSIL BEDS NM....................  CONSTRUCT INITIAL PARK FACILITIES....       9,500,000          103          RMR            4            B
    FORT DONELSON NB.............................  CONSTRUCT BYPASS ROAD................       1,980,000          127          SER            5            R
    FORT LARNED NHS..............................  CONSTRUCT VISITOR CENTER.............       7,291,200          198          MWR            5            B
    FORT MCHENRY NM and HIST SHRINE..............  COMPLETE HISTORIC SEAWALL REPAIRS....       2,210,000            1          MAR            2            L
    FORT MCHENRY NM and HIST SHRINE..............  REPLACE UNSAFE VISITOR CENTER........       8,520,000          277          MAR            5            B
    FORT NECESSITY NB............................  REHAB/DEVELOPMENT OF FORT NECESSITY..      12,024,000          230          MAR            4            L
    FORT POINT NHS...............................  REPAIR EARTHQUAKE DAMAGE and REPOINT        2,140,000          393          WER            2            B
                                                    BRICKWORK.
    FORT SCOTT NHS...............................  PROVIDE FIRE PROT. SYSTEMS FOR              1,244,400          227          MWR            2            B
                                                    HISTORIC STRUCTURES.
    FORT SUMTER NM...............................  CONSTRUCT TOUR BOAT FACILITY --             7,100,000          105          SER            5            B
                                                    DOCKSIDE II.
    FORT UNION NM................................  CONSTRUCT CURATORIAL, AUDIO-VISUAL,           720,000          102          SWR            5            B
                                                    and OFFICE AREAS.
    FREDERICKSBURG N MILITARY PARK...............  PROTECT PARK BOUNDARY................         800,000          106          MAR            2            L
    FREDERICKSBURG NMP...........................  STABILIZE HISTORIC STRUCTURES, RUINS,       3,855,600          107          MAR            2            L
                                                    and EARTHWORKS.
    FREDERICKSBURG NMP...........................  ENLARGE VISITOR CENTER/RESTORE HIST.       14,400,000          271          MAR            3            L
                                                    ROAD TRACES.
    FREDERICKSBURG NMP...........................  REHABILITATE PARK ROADS..............       7,128,000          230          MAR            3            R
    GATEWAY NRA..................................  REHABILITATE FLOYD BENNETT FIELD, FT.      12,300,000          169          NAR            1            U
                                                    TILDEN UTILITIES.
    GATEWAY NRA..................................  COMPLETE REHABILITATION OF JACOB RIIS      12,100,000          147          NAR            1            B
                                                    PARK.
    GATEWAY NRA..................................  COMPLETE GREAT KILLS PARK                   2,800,000          149          NAR            4            B
                                                    REHABILITATION.
    GATEWAY NRA..................................  REHABILITATE BATTERY WEED SEAWALL and       3,280,000          219          NAR            2            L
                                                    DOCK.
    GATEWAY NRA..................................  PRESERVE/REHABILITATE FORT HANCOCK        120,000,000          123          NAR            2            B
                                                    STRUCT. and UTIL.
    GATEWAY NRA..................................  REHABILITATE FORT WADSWORTH FOR            48,000,000          191          NAR            1            B
                                                    VISITOR and NPS USE.
    GATEWAY NRA..................................  REHABILITATE SANDY HOOK MAIN ROAD....       8,580,000          111          NAR            1            R
    GATEWAY NRA..................................  REHABILITATE MILLER FIELD ROAD AND          4,224,000          115          NAR            3            R
                                                    PARKING.
    GATEWAY NRA..................................  REHABILITATE PARK ROADS..............      21,780,000          185          NAR            1            R
    GEO. WASHINGTON MEML PKWY....................  REHABILITATE GLEN ECHO FACILITIES....       2,000,000          171          NCR            3            B
    GEO. WASHINGTON MEML PKWY....................  RESTORE THEODORE ROOSEVELT MEMORIAL..       1,765,000          181          NCR            2            L
    GEO. WASHINGTON MEML PKWY....................  CandO VIEWSHED-REMOVE/REHABILITATE         19,752,000          172          NCR            2            L
                                                    STRUCT. and LNDSCP.
    GEO. WASHINGTON MEML PKWY....................  RECONSTRUCT SPOUT RUN PARKWAY (PHASE        7,440,000          836          NCR            1            R
                                                    IV).
    GEO. WASHINGTON MEML PKWY....................  PRESERVE ARLINGTON HOUSE HISTORIC             420,000          103          NCR            2            B
                                                    FURNISHINGS.
    GEO. WASHINGTON MEML PKWY....................  SPROUT RUN TO 123....................       6,600,000          461          NCR            1            R
    GEO. WASHINGTON MEML PKWY....................  123 TO SPROUT RUN....................       6,600,000          461          NCR            1            R
    GEORGE WASHINGTON MEML PKWY..................  REHABILITATE MEMORIAL AVENUE BRIDGE..       3,300,000          464          NCR            3            R
    GEORGE ROGERS CLARK NHP......................  REHABILITATE HISTORIC MEMORIAL              1,560,000          122          MWR            2            B
                                                    TERRACE.
    GETTYSBURG NMP...............................  PROTECT HISTORIC STRUCTURES..........       2,500,000            1          MAR            2            B
    GETTYSBURG NMP...............................  REPAIR 22 HISTORIC MONUMENTS.........       2,012,000            2          MAR            2            L
    GETTYSBURG NMP...............................  REHABILITATE VISITOR CENTER..........       4,280,000          296          MAR            1            B
    GETTYSBURG NMP...............................  REHAB PARK ROADS.....................       8,316,000          106          MAR            3            R
    GLACIER BAY NP...............................  CONSTRUCT MTNCE. FACILITIES/                1,700,000        100BC          AKR            1            U
                                                    REHABILITATE UTILITY SYS.
    GLACIER BAY NP...............................  CONSTRUCT PARK EMPLOYEE HOUSING......       3,100,000          130          AKR            4            H
    GLACIER BAY NP...............................  REHABILITATE MAIN PARK ROAD..........       6,204,000          170          AKR            3            R
    GLACIER NP...................................  UPGRADE UNSAFE WATER AND SEWER SYSTEM       9,500,000          165          RMR            1            U
    GLACIER NP...................................  REHAB GOING TO THE SUN ROAD, 55 MILES      78,144,000          303          RMR            3            R
    GLACIER NP...................................  REHABILITATE SUBSTANDARD BACKCOUNTRY        2,800,000          357          RMR            3            B
                                                    CHALETS.
    GLACIER NP...................................  REHABILITATE LAKE MCDONALD/APGAR           18,673,200          264          RMR            3            B
                                                    CONCESS. FACILITIES.
    GLACIER NP...................................  REPLACE OBSOLETE HOUSING PARKWIDE....      18,765,600          399          RMR            3            H
    GLEN CANYON NRA..............................  CONSTRUCT FEE COLLECTION STATIONS and      10,616,400          210          RMR            4            B
                                                    EMPL. HOUSING.
    GLEN CANYON NRA..............................  UPGRADE SUBSTANDARD PARK HOUSING.....      18,726,000          421          RMR            3            H
    GLEN CANYON NRA..............................  CORRECT MARINA CONSTRUCTION                 1,176,000          434          RMR            3            U
                                                    DEFICIENCIES.
    GLEN CANYON NRA..............................  REHABILITATE STATE LINE ROADS........       3,168,000          341          RMR            3            R
    GLEN CANYON NRA..............................  REHABILITATE BULL FROG ROADS.........       5,544,000          342          RMR            3            R
    GLEN CANYON NRA..............................  RECONSTRUCT MARINA ACCESS ROAD.......       1,980,000          380          RMR            3            R
    GOLDEN GATE NRA..............................  REHABILITATE/REPAIR FORT MASON PIER..      25,152,000          282          WER            2            B
    GOLDEN GATE NRA..............................  REPLACE RESTROOMS....................       3,301,200          357          WER            5            B
    GOLDEN GATE NRA..............................  STABILIZE ALCATRAZ HISTORIC                 5,030,400          167          WER            2            B
                                                    STRUCTURES.
    GOLDEN GATE NRA..............................  REHABILITATE MARIN DISTRICT ROADS....      10,032,000          857          WER            3            R
    GOLDEN GATE NRA..............................  REHABILITATE SAN FRANCISCO DISTRICT         4,620,000          858          WER            3            R
                                                    ROADS.
    GRAND CANYON NP..............................  CONSTRUCT REPLACEMENT HOUSING........      16,800,000          143          WER            1            H
    GRAND CANYON NP..............................  REPLACE NORTH RIM PIPELINE and             11,800,000          319          WER            1            U
                                                    TREATMENT SYSTEM.
    GRAND CANYON NP..............................  LANDFILL CLOSURE.....................       6,300,000          190          WER            1            L
    GRAND CANYON NP..............................  CONSTRUCT SOUTH RIM ORIENTATION......      21,900,000            1          WER            5            B
    GRAND CANYON NP..............................  REHABILITATE SUBSTANDARD HOUSING.....       7,545,600          348          WER            1            H
    GRAND CANYON NP..............................  SAFETY RECONSTRUCTION OF WEST RIM           7,388,400          196          WER            1            R
                                                    DRIVE.
    GRAND CANYON NP..............................  CONSTRUCT PUBLIC RESTROOMS...........       3,301,200          121          WER            5            B
    GRAND CANYON NP..............................  REALIGN/REPAIR EAST RIM ROAD.........      11,352,000          272          WER            3            R
    GRAND CANYON NP..............................  RECONSTRUCT SOUTH RIM ROADS..........      50,160,000          110          WER            3            R
    GRAND CANYON NP..............................  RECONSTRUCT WEST RIM DRIVE...........       7,128,000          196          WER            1            R
    GRAND PORTAGE NM.............................  REMOVE HOUSING and MTNCE. ACTIVITIES        3,240,000          106          MWR            2            B
                                                    FROM HIST. RES.
    GRAND PORTAGE NM.............................  CONSTRUCT VISITOR CENTER/                   4,380,000          105          MWR            5            B
                                                    ADMINISTRATIVE FACILITY.
    GRAND PORTAGE NM.............................  RELOCATE ROADS.......................       1,716,000          108          MWR            2            R
    GRAND TETON NP...............................  COMPLETE FINAL SURFACE FOR 31.7 MILES      14,784,000          328          RMR            3            R
                                                    OF MAIN ROAD.
    GRAND TETON NP...............................  REPAIR UTILITY SYSTEMS PARKWIDE......      30,000,000          102          RMR            3            U
    GRAND TETON NP...............................  REPLACE PARK HOUSING TO MEET               25,836,000          148          RMR            3            H
                                                    STANDARDS.
    GREAT BASIN NP...............................  REPAIR ROAD SURFACE and SHOULDERS....       5,940,000          197          WER            3            R
    GREAT SAND DUNES NM..........................  EXPAND VISITOR CENTER THRU                  1,900,000          103          RMR            5            B
                                                    PARTNERSHIP.
    GREAT SAND DUNES NM..........................  WIDEN and REHABILITATE ROAD..........       2,640,000          126          RMR            3            R
    GREAT SMOKY MOUNTAINS NP.....................  CONSTRUCT OCONOLUFTEE VISITOR CENTER.       8,000,000          129          SER            5            B
    GREAT SMOKY MOUNTAINS NP.....................  REPLACE FOUR BRIDGES.................       3,696,000          319          SER            3            R
    GREAT SMOKY MOUNTAINS NP.....................  COMPLETE 33.5 MILES OF FOOTHILLS           34,980,000          109          SER            4            R
                                                    PKWY. and ASSOC. FAC.
    GREAT SMOKY MOUNTAINS NP.....................  CONST INTERP CTR, PICNIC AREA, RDS         22,680,000          314          SER            5            B
                                                    and UTI.
    GREAT SMOKY MOUNTAINS NP.....................  REHAB ABRAMS, GREENBRIER, BIG CREEK         1,452,000          324          SER            3            R
                                                    RDS.
    GUADALUPE MOUNTAINS NP.......................  CONSTRUCT TRAIL SYSTEM (PHASE 4......       1,200,000          110          SWR            2            L
    GUADALUPE MOUNTAINS NP.......................  CONSTRUCT PINE SPRINGS CAMPGROUND....       1,560,000          202          SWR            4            L
    GUADALUPE MOUNTAINS NP.......................  SURFACE DOG CANYON ENTRANCE ROAD.....       1,056,000          207          SWR            3            R
    HAGERMAN FOSSIL BEDS NM......................  CONSTRUCT RESEARCH CENTER/MUSEUM.....      16,800,000          101          PNR            4            B
    HALEAKALA NP.................................  REHAB HOUSE OF THE SUN VIS. CTR. and        3,144,000          105          WER            3            B
                                                    COMFORT STATION.
    HALEAKALA NP.................................  CONSTRUCT KIPAHULA WATER SYS.,              4,087,200          153          WER            4            B
                                                    RESTROOM, ADMIN. FAC.
    HAMILTON GRANGE NAT MEML.....................  REHABILITATE and RELOCATE HAMILTON         13,080,000          105          NAR            2            B
                                                    GRANGE.
    HAMPTON NHS..................................  RESTORE DETERIORATED HISTORIC               9,600,000          209          MAR            2            B
                                                    STRUCTURES.
    HARPERS FERRY NHP............................  STABILIZE HISTORIC STRUCTURES........       2,673,600          118          NCR            2            B
    HARRY S TRUMAN NHS...........................  REHAB TRUMAN AND NOLAND HISTORIC            1,200,000          200          MWR            2            B
                                                    HOUSES.
    HAWAII VOLCANOES NP..........................  REHABILITATE CRATER RIM DRIVE........       6,996,000          211          WER            3            R
    HERBERT HOOVER NHS...........................  CONSTRUCT FARM ROAD..................       1,848,000          162          MWR            3            R
    HERBERT HOOVER NHS...........................  CONSTRUCT MAINTENANCE FACILITY.......         840,000          743          MWR            5            B
    HERBERT HOOVER NHS...........................  STABILIZE and ADAPTIVELY RESTORE 8          2,880,000          110          MWR            2            B
                                                    HISTORIC HOUSES.
    HOME OF FDR NHS..............................  RESTORE/REHABILITATE FDR HOME AND           7,042,000          137          NAR            2            B
                                                    SITE.
    HOME OF FDR NHS..............................  REHABILITATE ROADS, BRIDGES, and            6,204,000          138          NAR            3            R
                                                    PARKWAY.
    HOPEWELL FURNACE NHS.........................  COMPLETE PRESERVATION OF FURNACE            6,000,000          195          MAR            2            L
                                                    RESOURCES.
    HORACE ALBRIGHT TRAINING CTR.................  REHABILITATE TRAINING CENTER COMPLEX.       6,241,000            1         WASO            3            B
    HOT SPRINGS NP...............................  REHABILITATE/RESTORE BATHHOUSE ROW         10,100,000          145          SWR            2            B
                                                    STRUCTURES.
    HOT SPRINGS NP...............................  UPGRADE GULPHA GORGE CAMPGROUND......       2,400,000          245          SWR            3            L
    HOVENWEEP NM.................................  BUILD VISITOR CENTER/RANGER STATION         3,670,000          134          RMR            4            B
                                                    and SUPPORT FAC.
    HUBBELL TRADING POST NHS.....................  CONTROL EROSION IN PUEBLO COLORADO            840,000          158          SWR            2            L
                                                    WASH.
    HUBBELL TRADING POST NHS.....................  IMPROVE VISITOR USE, MTNCE., and            3,000,000          107          SWR            4            B
                                                    CURATORIAL FACILITIES.
    INDEPENDENCE NHP.............................  IMPROVE/REHABILITATE UTILITIES.......      80,000,000          412          MAR            1            U
    INDEPENDENCE NHP.............................  REHABILITATE INDEPENDENCE MALL WALKS       18,600,000          168          MAR            1            L
                                                    AND WALLS.
    INDIANA DUNES NL.............................  REMOVE ASBESTOS FROM 250 STRUCTURES..       6,960,000          510          MWR            1            B
    INDIANA DUNES NL.............................  CONSTRUCT WEST UNIT ACCESS ROAD......       7,920,000          288          MWR            5            R
    INDIANA DUNES NL.............................  IMPROVE PARK ROADS (INCLUDES PKG 295.      29,040,000          294          MWR            3            R
    ISLE ROYALE NP...............................  REPLACE ELEVATED WATER TANK..........       3,520,000          188          MWR            1            U
    ISLE ROYALE NP...............................  REHABILITATE RANGER III..............       2,300,000          319          MWR            1            L
    ISLE ROYALE NP...............................  CONSTRUCT EMPLOYEE HOUSING DUPLEX....         786,000          400          MWR            1            H
    ISLE ROYALE NP...............................  CONSTRUCT 3 EMPLOYEE HOUSING DUPLEXES       2,280,000          117          MWR            5            H
    JAMES A. GARFIELD NHS........................  REHABILITATE FIRE and INTRUSION ALARM       7,308,000          103          MWR            2            B
                                                    SYSTEMS.
    JAMES A. GARFIELD NHS........................  RECONSTRUCT ROAD and PARKING.........         924,000          164          MWR            3            R
    JEAN LAFITTE NHP and PRES....................  PROVIDE THIBODEAU LANDSCAPING and           1,920,000          178          SWR            4            L
                                                    PARKING.
    JEFFERSON NAT EXPANSION MEML.................  REPLACE ARCH HANDICAPPED ACCESS RAMPS       2,340,000          241          MWR            1            B
    JEFFERSON NAT EXPANSION MEML.................  CONSTRUCT PARKING GARAGE and GROUNDS        1,560,000          220          MWR            5            B
                                                    MTNCE. FAC.
    JOHN D. ROCKEFELLER MEM PKWY.................  DEVELOPMENT OF FLAGG RANCH FACILITIES      16,300,000          131          RMR            5            B
    JOHN DAY FOSSIL BEDS NM......................  CONSTRUCT VISITOR/RESEARCH CENTER....      14,400,000          105          PNR            5            B
    JOSHUA TREE NM...............................  RECONSTRUCT ROADS, PARKING, and            27,720,000          173          WER            3            R
                                                    CAMPGROUND ROADS.
    JOSHUA TREE NM...............................  REHABILITATE OASIS VISITOR CENTER and       4,873,200          388          WER            3            B
                                                    ADMIN. BLDG.
    JOSHUA TREE NM...............................  RECONSTRUCT/REHABILITATE NARROW            17,160,000          174          WER            3            R
                                                    UNSAFE ROADS.
    KATMAI NP....................................  CONSTRUCT LAKE CAMP FACILITIES.......       1,726,000          102          AKR            4            L
    KATMAI NP....................................  RELOCATE BROOKS CAMP FACILITIES/           10,600,000        100BC          AKR            2            B
                                                    REPAIR VTS ROAD.
    KENAI FJORDS NP..............................  CONSTRUCT VISITOR CENTER/HEADQUARTERS      11,500,000        100SW          AKR            3            U
                                                    FACILITY.
    KENAI FJORDS NP..............................  IMPROVE ACCESS AND VISITOR FACILITIES       2,800,000        100EG          AKR            3            B
    KEWEENAW NHP.................................  STABILIZE CORE BUILDINGS.............       4,716,000          100          MWR            2            B
    LAKE CLARK NP and PRES.......................  CONSTRUCT HOUSING and SUPPORT               6,939,000        100PA          AKR            4            B
                                                    FACILITIES.
    LAKE MEAD NRA................................  UPGRADE WATER TREATMENT AT KATHERINE.       3,095,000           69          WER            1            U
    LAKE MEAD NRA................................  MITIGATE STRUCTURAL FLOODING PROBLEMS      29,600,000          853          WER            1            L
    LAKE MEAD NRA................................  SAFETY RECONSTRUCTION LAKESHORE ROAD.      32,340,000          242          WER            1            R
    LAKE MEAD NRA................................  REHAB NORTH SHORE ROAD and CONNECT         55,440,000          457          WER            1            R
                                                    ACCESS.
    LAKE MEAD NRA................................  ENTRANCE STATION PROGRAM.............      15,248,400          594          WER            5            B
    LAKE MEAD NRA................................  IMPROVE ROAD TO PRINCESS COVE........       2,508,000          700          WER            3            R
    LAKE MEREDITH NRA............................  RECONSTRUCT/RECONNECT/REPAIR WATER          4,400,000          210          SWR            1            U
                                                    SYSTEM.
    LAKE MEREDITH NRA............................  REHABILITATE/CONSTRUCT CAMPGROUNDS         33,480,000          110          SWR            3            L
                                                    and RESTROOMS.
    LAKE MEREDITH NRA............................  RECONSTRUCT ACCESS ROADS and PARKINGS       7,788,000          185          SWR            3            R
    LAKE MEREDITH NRA............................  CONNECT PARK TO FRITCH WATER SYSTEM..         960,000          192          SWR            3            U
    LASSEN VOLCANIC NM...........................  UPGRADE HEADQUARTERS UTILITY SYSTEMS.       4,244,400          325          WER            3            U
    LASSEN VOLCANIC NM...........................  REPAIR MAIN PARK ROAD................      13,596,000          101          WER            3            R
    LASSEN VOLCANIC NM...........................  PAVE BUTTE LAKE ACCESS and CAMPGROUND       1,716,000          312          WER            3            R
    LAVA BEDS....................................  RECONSTRUCT SOUTHEAST ENTRANCE ROAD..       5,940,000          302          WER            3            R
    LAVA BEDS NM.................................  RECONSTUCT S.E. ENTRANCE and MEDICINE       5,940,000          302          WER            3            R
                                                    LAKE ROADS.
    LINCOLN BOYHOOD NM...........................  RELOCATE COUNTY ROADS A and B/UPGRADE       2,772,000          126          MWR            3            R
                                                    PARKING.
    LINCOLN HOME NHS.............................  STABILIZE/RESTORE STUVE HOUSE........       3,144,000          403          MWR            2            B
    LITTLE BIGHORN NB............................  CONSTRUCT INDIAN MEMORIAL............         900,000          147          RMR            5            L
    LOWELL NHP...................................  COMPLETE BOOTT MILL..................         958,000          117          NAR            2            B
    LOWELL NHP...................................  REHAB VISITOR CENTER PARKING.........         660,000          101          NAR            4            R
    LYNDON B. JOHNSON NHP........................  CONSTRUCT MAINTENANCE/BUS SERVICE           3,600,000          135          SWR            5            B
                                                    AREA.
    LYNDON B. JOHNSON NHP........................  REHABILITATE PARK ROADS..............       1,980,000          193          SWR            3            R
    LYNDON B. JOHNSON NHP........................  EXTEND WATER SYSTEM TO JUNCTION               600,000          198          SWR            2            U
                                                    SCHOOL.
    MAMMOTH CAVE NP..............................  RENOVATE VISITOR CENTER..............       5,327,000          171          SER            3            B
    MAMMOTH CAVE NP..............................  CONSTRUCT NEW ADMINISTRATION BUILDING       9,720,000          185          SER            5            B
    MANASSAS NAT BATTLEFIELD PARK................  RESTORE DISTURBED STUART'S HILL             6,828,000          225          NCR            2            L
                                                    BATTLEGROUND.
    MANASSAS NAT BATTLEFIELD PARK................  PRESERVE HISTORIC RESOURCES FOR             1,382,000          155          NCR            2            L
                                                    VISITOR USE.
    MESA VERDE NP................................  STABILIZE AND RESTORE PREHISTORIC          12,000,000          239          RMR            2            B
                                                    STRUCTURES.
    MESA VERDE NP................................  COMPLETE WATERLINE REPLACEMENT.......       4,500,000          223          RMR            3            U
    MESA VERDE NP................................  CONSTRUCT ENTRANCE STATION and              1,542,000          120          RMR            5            B
                                                    COMPLETE ROAD.
    MESA VERDE NP................................  CORRECT ENTRANCE ROAD FAILURE........       9,636,000          278          RMR            3            R
    MESA VERDE NP................................  RECONSTRUCT WETHERILL ROAD...........       7,920,000          225          RMR            3            R
    MINUTE MAN NHP...............................  PRESERVE/REHABILITATE 29 HIST. BATTLE       7,200,000          171          NAR            1            B
                                                    RD. STRUCTURES.
    MISSISSIPPI NAT RIVERandRECR. AREA...........  DEVELOP PARTNERSHIP EDUC. FAC. IN           2,564,000          110          MWR            4            B
                                                    SCIENCE MUSEUM.
    MISSISSIPPI NR&RA............................  CONSTRUCT PARTNERSHIP EDUCATION             4,281,000          114          MWR            4            B
                                                    CENTER.
    MONOCACY NB..................................  RESTORE STRUCTURE FOR PRESERVATION          5,940,000          337          NCR            2            B
                                                    TRAINING.
    MONTEZUMA CASTLE NM..........................  DEVELOP MONTEZUMA WELL INFRASTRUCTURE       2,940,000          100          SWR            4            B
                                                    & FAC.
    MORRISTOWN NHP...............................  REHABILITATE PARK TOUR ROADS.........       7,128,000          187          NAR            3            R
    MOUNT RAINIER NP.............................  REHABILITATE JACKSON VISITOR CENTER..       4,400,000          399          PNR            3            B
    MOUNT RAINIER NP.............................  REPLACE SUNRISE LODGE................       5,400,000          315          PNR            1            B
    MOUNT RAINIER NP.............................  REHABILITATE HIGHWAY 410.............       6,864,000         349A          PNR            1            R
    MOUNT RAINIER NP.............................  CONSTRUCT TAHOMA WOODS ENTRANCE/            1,800,000          311          PNR            5            B
                                                    CONTACT STATION.
    MOUNT RAINIER NP.............................  REHABILITATE PARADISE INN and ANNEX..       8,400,000          370          PNR            3            B
    MOUNT RAINIER NP.............................  REHABILITATE HIGHWAY 123.............      25,080,000         349B          PNR            1            R
    MOUNT RAINIER NP.............................  REHABILITATE CARBON RIVER FACILITIES.       6,000,000          316          PNR            2            B
    MOUNT RAINIER NP.............................  RECONSTRUCT BACKBONE RIDGE VIADUCT...       3,036,000          386          PNR            1            R
    MOUNT RUSHMORE N MEML........................  REPLACE WASTEWATER TREATMENT SYSTEM..       8,989,000          182          RMR            3            U
    MOUNT RUSHMORE N MEML........................  CONSTRUCT EXHIBITS and MTNCE. FAC./        12,000,000          182          RMR            5            B
                                                    REHABILITATE STUDIO.
    NATCHEZ TRACE PARKWAY........................  CONSTRUCT PARKWAY....................      55,440,000          300          SER            5            R
    NATCHEZ TRACE PARKWAY........................  CONSTRUCT NORTH VISITOR CENTER and          6,000,000         300A          SER            5            B
                                                    MAINTENANCE AREA.
    NATCHEZ TRACE PARKWAY........................  CONSTRUCT FOUR OVERPASSES............       5,280,000          238          SER            5            R
    NATCHEZ TRACE PARKWAY........................  REPAIR/REPLACE BRIDGES...............      17,556,000          264          SER            3            R
    NATCHEZ TRACE PARKWAY........................  RESURFACE VARIOUS SECTIONS OF PARKWAY      99,000,000          250          SER            3            R
    NATIONAL CAPITOL AREA........................  CONSTRUCT MUSEUM/ARCHEOLOGICAL             16,000,000         323A          NCR            5            B
                                                    STORAGE FACILITY.
    NATIONAL CAPITOL AREA........................  REHABILITATE and ADD SPACE TO              17,488,800          730          NCR            3            B
                                                    HEADQUARTERS BUILDING.
    NATIONAL CAPITOL PARKS-CENTRAL...............  RESTORE LINCOLN AND JEFFERSON              15,400,000          758          NCR            2            B
                                                    MEMORIALS.
    NATIONAL CAPITOL PARKS-CENTRAL...............  STABILIZE AND PRESERVE WASHINGTON          18,000,000          448          NCR            2            B
                                                    MONUMENT.
    NATIONAL CAPITOL PARKS-CENTRAL...............  REPAIR MONUMENT CORES AND SEAWALLS...      78,600,000          731          NCR            1            L
    NATIONAL CAPITOL PARKS-CENTRAL...............  PROVIDE FORDS THEATRE HANDICAPPED           7,900,000          790          NCR            2            B
                                                    ACCESS.
    NATIONAL CAPITOL PARKS-CENTRAL...............  IMPROVE WASHINGTON MONUMENT ACCESS...       9,690,000          430          NCR            3            L
    NATIONAL CAPITOL PARKS-CENTRAL...............  MEMORIAL CORE-RECONSTRUCT EAST BASIN        4,356,000          450          NCR            1            R
                                                    DRIVE.
    NATIONAL CAPITOL PARKS-CENTRAL...............  REHABILITATE LINCOLN CIRCLE AREA/           5,502,000          825          NCR            2            R
                                                    PROVIDE VIS. ACCESS.
    NATIONAL CAPITOL PARKS-CENTRAL...............  REHABILITATE H-1 PARK POLICE STABLE         3,000,000          827          NCR            3            B
                                                    and CORRECT DRAINAGE.
    NATIONAL CAPITOL PARKS-CENTRAL...............  MEMORIAL CORE-RECONSTRUCT INDIANA and            405E          NCR            1            R
                                                    MAINE AVENUES.
    NATIONAL CAPITOL PARKS-CENTRAL...............  DC MALL--ALTERNATIVE TRANSPORTATION         2,640,000         2005          NCR            5            R
                                                    MODES.
    NATIONAL CAPITOL PARKS-CENTRAL...............  RECONSTRUCT INDIANA and MAINE AVES.,       29,172,000          405          NCR            3            R
                                                    EASTBOUND.
    NATIONAL CAPITOL PARKS-CENTRAL...............  RECONSTRUCT JEFFERSON DRIVE..........       2,904,000         405B          NCR            3            R
    NATIONAL CAPITOL PARKS-CENTRAL...............  RECONSTRUCT ROADS, EAST POTOMAC PARK.       5,016,000         405C          NCR            3            R
    NATIONAL CAPITOL PARKS-CENTRAL...............  RECONSTRUCT LINCOLN MEM. CIRCLE and         3,960,000         405D          NCR            1            R
                                                    APPROACHES.
    NATIONAL CAPITOL PARKS-CENTRAL...............  RECONSTRUCT CONSTITUTION AVE.........       7,128,000         405G          NCR            3            R
    NATIONAL CAPITOL PARKS-EAST..................  RESTORE FORT WASHINGTON..............       4,940,000          106          NCR            2            B
    NATIONAL CAPITOL PARKS-EAST..................  REHABILITATE FREDERICK DOUGLASS HOME        1,800,000          738          NCR            2            B
                                                    VISITOR CENTER.
    NATIONAL CAPITOL PARKS-EAST..................  RECONSTRUCT RENO ROAD OVERPASS             10,560,000          315          NCR            3            R
                                                    (SUITLAND PKWY).
    NAVAJO NM....................................  CONSTRUCT PEDESTRIAN TRAIL TUNNEL....         840,000          141          SWR            3            L
    NAVAJO NM....................................  REHABILITATE ENTRANCE AND CAMPGROUND          660,000          144          SWR            3            R
                                                    ROADS.
    NEW JERSEY COASTAL HER. TRAIL................  INITIAL INTERPRETIVE DEVELOPMENTS....       7,800,000          102          NAR            4            L
    NEW RIVER GORGE NR...........................  STABILIZE/PRESERVE/ADAPT THURMOND          33,000,000          126          MAR            4            L
                                                    HIST. STRUCT./SITE.
    NEW RIVER GORGE NR...........................  DUN GLEN/SOUTHSIDE JUNCTION                 3,240,000          155          MAR            4            L
                                                    DEVELOPMENT.
    NEW RIVER GORGE NR...........................  GRANDVIEW CULTURAL HERITAGE CENTER         36,000,000          158          MAR            4            L
                                                    DEVELOPMENT.
    NEW RIVER GORGE NR...........................  KAYMOOR DEVELOPMENT..................       3,600,000          156          MAR            4            L
    NEW RIVER GORGE NR...........................  HEADQUARTERS DEVELOPMENT (PHASE IV)..       2,700,000         108E          MAR            4            L
    NEW RIVER GORGE NR...........................  MIDDLE GORGE ACCESS..................       3,100,000          154          MAR            4            L
    NEW RIVER GORGE NR...........................  REHABILITATE PARK ROADS..............       2,640,000          138          MAR            3            R
    NEZ PERCE NHS................................  CONSTRUCT WHITEBIRD INTERP FACILITIES         960,000          160          PNR            4            B
    NEZ PERCE NHS................................  REPLACE SPALDING ROADS and PARKING...       1,056,000          159          PNR            3            R
    NORTH CASCADES NP............................  REPAIR/STABILIZE GOLDEN WEST VISITOR        2,486,000          107          PNR            3            B
                                                    CENTER.
    NORTH CASCADES NP............................  REPLACE NEWHALEM and HARLEQUIN              6,072,000          404          PNR            1            R
                                                    BRIDGES.
    NORTH CASCADES NP............................  PROVIDE STEHEKIN EMPLOYEE HOUSING....       1,200,000          369          PNR            5            H
    NORTH CASCADES NP............................  DEVELOP JOINT US/CANADIAN UTILITIES         3,000,000          391          PNR            4            U
                                                    AT HOZOMEEN.
    NORTH CASCADES NP............................  DEVELOP/IMPROVE HIGHWAY 20 FACILITIES       2,160,000          388          PNR            1            R
    NORTH CASCADES NP............................  RECONSTRUCT CASCADE RIVER ROAD.......         792,000          343          PNR            1            R
    NORTH CASCADES NP............................  REHABILITATE STEHEKIN ROAD...........       1,980,000          344          PNR            1            R
    NORTHWEST ALASKA AREAS.......................  CONSTRUCT VISITOR CTR./HEADQTRS. and       10,510,000        100KZ          AKR            4            B
                                                    MTNCE. FACILITIES.
    NORTHWEST ALASKA AREAS.......................  CONSTRUCT KOTZEBUE EMPLOYEE HOUSING..       4,690,000          130          AKR            4            B
    OLYMPIC NP...................................  ELWHA DAM REMOVAL/RESTORATION........     126,600,000          404          PNR            2            L
    OLYMPIC NP...................................  EXPAND VISITOR FACILITIES AT HOH            4,080,000          405          PNR            5            B
                                                    RAINFOREST.
    OLYMPIC NP...................................  CONSTRUCT KALALOCH VISITOR CENTER....      10,200,000          360          PNR            5            B
    OLYMPIC NP...................................  RECONSTRUCT EAST BEACH and LOG CABIN        4,752,000          311          PNR            1            R
                                                    RESORT ROADS.
    OLYMPIC NP...................................  CONSTRUCT TWIN CREEK BRIDGE..........         924,000          406          PNR            2            R
    OLYMPIC NP...................................  REPLACE FINLEY CREEK BRIDGE..........       1,056,000          407          PNR            3            R
    ORGAN PIPE CACTUS NM.........................  REHABILITATE PAVED PUBLIC ROADS......       1,320,000          439          WER            3            R
    OZARK NAT SCENIC RIVER.......................  CONSTRUCT REGIONAL CULTURAL/VIS. CTR./      9,600,000          459          MWR            5            B
                                                    ADMIN. COMPLEX.
    OZARK NSR....................................  RELOCATE CAMPGROUND and CONC. FAC.         12,184,800          103          MWR            2            B
                                                    FROM FLOODPLAIN.
    OZARK NSR....................................  REHABILITATE PEAVINE ROAD............       4,356,000          506          MWR            3            R
    PADRE ISLAND NS..............................  CONSTRUCT SEWAGE TREATMENT FACILITIES       1,046,000          215          SWR            4            U
    PADRE ISLAND NS..............................  REHABILITATE/RELOCATE BIRD ISLAND           1,188,000          200          SWR            3            R
                                                    BASIN ROAD.
    PADRE ISLAND NS..............................  CONTRUCT MAINTENANCE SHOP and STORAGE       2,160,000          188          SWR            5            B
                                                    AREA.
    PEA RIDGE NMP................................  RELOCATE OVERHEAD UTILITY LINES......         900,000          134          SWR            3            U
    PEA RIDGE NMP................................  CONSTRUCT MAINTENANCE/STORAGE AREA...       1,200,000          111          SWR            5            B
    PEA RIDGE NMP................................  CONSTRUCT ELKHORN TAVERN COMFORT            1,200,000          125          SWR            5            B
                                                    STATION and PARKING.
    PECOS NHP....................................  IMPROVE SEWAGE TREATMENT and                3,480,000          143          SWR            3            U
                                                    REHABILITATE RANCH.
    PECOS NHP....................................  REHABILITATE ENTRANCE ROAD...........         660,000          137          SWR            3            R
    PERRY'S VICTORY andINT PEACE MEML............  CONSTRUCT VISITOR CENTER.............      13,650,000          104          MWR            5            B
    PETERSBURG NB................................  PRESERVE/PROTECT EARTHWORKS and OTHER       8,400,000          249          MAR            2            L
                                                    PRIMARY RES.
    PETERSBURG NB................................  REHABILITATE/DEVELOP INTERPRETIVE/          7,200,000          248          MAR            4            L
                                                    VISITOR FACILITIES.
    PETERSBURG NB................................  REHABILITATE MAIN PARK ROAD and             1,980,000          132          MAR            3            R
                                                    BRIDGES.
    PETRIFIED FOREST NP..........................  REHABILITATE PAINTED DESERT INN and         2,851,000          109          SWR            2            B
                                                    CABINS.
    PETROGLYPH NM................................  REHABILITATE/EXPAND VISITOR CENTER...       1,156,000            1          SWR            4            B
    PETROGLYPH NM................................  FENCE BOUNDARY/REMOVE DEBRIS.........         960,000          103          SWR            2            L
    PETROGLYPH NM................................  CONSTRUCT NEW VISITOR CENTER.........      13,080,000          106          SWR            4            B
    PICTURED ROCKS NL............................  CONSTRUCT ADMINISTRATION and PUBLIC         3,800,000          168          MWR            5            B
                                                    USE FACILITY.
    PICTURED ROCKS NL............................  RESTORE LIGHTHOUSE SEAWALL...........         943,200          107          MWR            2            L
    PICTURED ROCKS NL............................  REHAB 12 MILES BEACH ROUTE 16........      16,764,000          191          MWR            5            R
    PICTURED ROCKS NL............................  PAVING--AuSABLE POINT................         660,000          200          MWR            3            R
    PICTURED ROCKS NL............................  PAVE ROAD and PARKING--MINER'S BEACH.         396,000          200          MWR            3            R
    POINT REYES NS...............................  RECONSTRUCT TOMALES ROAD.............       1,320,000          261          WER            3            R
    POINT REYES NS...............................  PAVE PALO MARIN TRAILHEAD ROAD.......         924,000          262          WER            3            R
    PRESIDENT'S PARK.............................  ELIMINATE ENV. HAZARD AT WHITE HOUSE          649,000          473          NCR            1            B
                                                    GREENHOUSE.
    PRESIDENT'S PARK.............................  IMPLEMENT WHITE HOUSE COMPREHENSIVE        90,000,000          249          NCR            5            B
                                                    DESIGN.
    PRINCE WILLIAM FOREST PARK...................  REPLACE CAMPGROUND WATER LINES.......       7,450,000          239          NCR            1            U
    PRINCE WILLIAM FOREST PARK...................  CONSTRUCT VISITOR CENTER.............       4,200,000          152          NCR            5            B
    PU'UHONUA O HONAUNAU.........................  CONSTRUCT REPLACEMENT OFFICE and            3,458,400          113          WER            5            B
                                                    MAINTENANCE SHOP.
    PUUKOHOLA HEIAU..............................  RELOCATE VISITOR CTR., ADMIN., and          1,886,400          107          WER            3            B
                                                    MAINTENANCE SHOP.
    REDWOOD NP...................................  REALIGN DAVISON ROAD.................       4,224,000          186          WER            3            R
    RICHMOND NAT BATTLEFIELD PARK................  STABILIZE DREWERY'S BLUFF and              14,400,000          170          MAR            2            L
                                                    EARTHWORKS.
    RICHMOND NBP.................................  REPAIR/REHABILITATE EXISTING VISITOR       10,800,000          169          MAR            3            L
                                                    USE FACILITIES.
    RICHMOND NBP.................................  REHABILITATE PARK ROADS..............       2,772,000          129          MAR            3            R
    ROCK CREEK PARK..............................  RESTORE HISTORIC PIERCE GRIST MILL...       1,223,000          227          NCR            2            B
    ROCK CREEK PARK..............................  REHABILITATE MERIDIAN HILL                 10,471,200          120          NCR            2            B
                                                    INFRASTRUCTURE.
    ROCK CREEK PARK..............................  CORRECT CARTER BARON STRUCTURAL               684,000          204          NCR            2            B
                                                    PROBLEMS.
    ROCK CREEK PARK..............................  REHABILITATE ROCK CREEK PARKWAY and        34,452,000          318          NCR            1            R
                                                    ADJACENT TRAIL.
    ROCKY MOUNTAIN NP............................  CONSTRUCT VEHICLE MAINTENANCE/STORAGE         506,400          278          RMR            3            B
                                                    BUILDINGS.
    ROCKY MOUNTAIN NP............................  REPLACE OBSOLETE SEASONAL HOUSING....      28,044,000          123          RMR            3            H
    ROCKY MOUNTAIN NP............................  UPGRADE FALL RIVER ENTRANCE                 2,443,200          104          RMR            5            B
                                                    FACILITIES.
    ROCKY MOUNTAIN NP............................  REBUILD BEAR LAKE ROAD...............       4,752,000          324          RMR            3            R
    SAGUARO NM...................................  REHABILITATE TUCSON MOUNTAIN ROADS...       9,636,000          255          WER            3            R
    SAINT GAUDENS NHS............................  CONSTRUCT MAINTENANCE AND EXHIBIT           7,040,000         121A          NAR            5            B
                                                    BUILDING.
    SAINT GAUDENS NHS............................  PHASE II DEVELOPMENTS................       6,632,400         121B          NAR            1            L
    SALINAS PUEBLO MISSIONS NHP..................  CONSTRUCT ABO VISITOR FACILITIES.....       3,120,000          179          SWR            4            B
    SALINAS PUEBLO MISSIONS NHP..................  REHABILITATE ENTRANCE ROADS..........       1,188,000          173          SWR            3            R
    SALINAS PUEBLO MISSIONS NHP..................  CONSTRUCT GRAN QUIVIRA VISITOR              3,120,000          178          SWR            4            B
                                                    FACILITIES.
    SAN ANTONIO MISSIONS NHP.....................  IMPROVE HEALTH, SAFETY, VISITOR             3,111,000          190          SWR            3            B
                                                    SERVICES-SAN JUAN.
    SAN ANTONIO MISSIONS NHP.....................  REHABILITATE SAN JUAN MISSION               3,960,000          187          SWR            2            B
                                                    STRUCTURES.
    SAN ANTONIO MISSIONS NHP.....................  REHABILITATE PARKING AREAS...........         792,000          185          SWR            3            R
    SAN FRANCISCO MARITIME NHS...................  RESTORE ENDANGERED SHIP C.A. THAYER..      11,004,000          643          WER            2            B
    SAN FRANCISCO MARITIME NHS...................  REHABILITATE THREATENED HISTORIC            6,602,400          518          WER            2            B
                                                    MUSEUM BUILDING.
    SAN FRANCISCO MARITIME NHS...................  COMPLETE RESTORATION OF SAILING SHIP        3,144,000          635          WER            2            B
                                                    BALCLUTHA.
    SANTA MONICA NRA.............................  REHABILITATE DIAMOND X AREA                 1,572,000          331          WER            3            B
                                                    MAINTENANCE FACILITY.
    SANTA MONICA NRA.............................  RANCHO SIERRA VISTA RD/SATWIWA NAT AR       1,980,000          226          WER            3            R
                                                    (IN. PKG145.
    SANTA MONICA NRA.............................  REHABILITATE CIRCLE X CAMPGROUND            1,980,000          290          WER            3            R
                                                    ROADS.
    SARATOGA NHP.................................  REHABILITATE TOUR ROADS and WAYSIDES.       7,920,000          159          NAR            2            R
    SARATOGA NHP.................................  PRESERVE SARATOGA MONUMENT and SITE..       2,360,000          159          NAR            2            L
    SARATOGA NHP.................................  REHABILITATE ROADS AND PARKING.......         396,000          160          NAR            3            R
    SAUGUS IRON WORKS NHS........................  PRESERVE/REHABILITATE HIST.                 2,400,000          154          NAR            2            B
                                                    STRUCTURES and EXHIBITS.
    SEQUOIA and KINGS CANYON NP..................  REMOVE FACILITIES AND RESTORE GIANT         8,200,000          200          WER            2            L
                                                    FOREST.
    SEQUOIA and KINGS CANYON NP..................  COMPLETE WUKSACHI VILLAGE                  13,900,000          130          WER            2            U
                                                    INFRASTRUCTURE.
    SEQUOIA and KINGS CANYON NP..................  RECONSTRUCT GENERALS HIGHWAY.........      40,920,000          840          WER            3            R
    SEQUOIA and KINGS CANYON NP..................  CONSTRUCT/REPLACE LODGEPOLE HOUSING..      55,020,000          259          WER            5            H
    SEQUOIA and KINGS CANYON NP..................  REPLACE CEDAR GROVE BRIDGE...........       3,960,000          336          WER            3            R
    SEQUOIA and KINGS CANYON NP..................  PAVE GRAVEL SECTION AT MINERAL KING..       6,600,000          541          WER            5            R
    SEQUOIA and KINGS CANYON NP..................  RECONSTRUCT GENERALS HIGHWAY (PHASE        16,500,000          841          WER            3            R
                                                    II).
    SHENANDOAH NP................................  REPLACE TRAILERS/CONSTRUCT EMERGENCY       25,100,000          446          MAR            1            H
                                                    FACILITY.
    SHENANDOAH NP................................  REHABILITATE WATER/SEWER/FIRE SYSTEMS      11,800,000          455          MAR            1            U
    SHENANDOAH NP................................  REHABILITATE STORM-DAMAGED TRAILS....      12,000,000          456          MAR            2            L
    SHENANDOAH NP................................  REHABILITATE VISITOR FACILITIES......       4,800,000          457          MAR            3            L
    SHENANDOAH NP................................  RECONSTRUCT SKYLINE DRIVE............      29,040,000          125          MAR            3            R
    SHILOH NMP...................................  STABILIZE RIVERBANK..................       2,600,000          134          SER            2            L
    SHILOH NMP...................................  RESURFACE TOUR ROADS, INCL. SHOULDER        3,300,000          138          SER            3            R
                                                    and DRAINAGE.
    SLEEPING BEAR DUNES NL.......................  REHABILITATE STOCKING SCENIC DRIVE          2,215,200          210          MWR            3            B
                                                    FACILITIES.
    SLEEPING BEAR DUNES NL.......................  CONSTRUCT SCENIC ROAD................      23,364,000          120          MWR            4            R
    SOUTHWEST REGION.............................  REHABILITATE HISTORIC OLD SANTA FE          2,100,000          257          SWR            2            B
                                                    TRAIL BUILDING.
    SOUTHWEST REGION.............................  CONSTRUCT EMPLOYEE HOUSING AT 11            8,600,000          279          SWR            4            H
                                                    PARKS.
    STATUE OF LIBERTY NM.........................  COMPLETE HISTORIC SEAWALL                   2,944,000            2          NAR            1            L
                                                    REHABILITATION.
    STATUE OF LIBERTY NM.........................  STABILIZE 23 ELLIS ISLAND BUILDINGS..      12,000,000          163          NAR            2            B
    STATUE OF LIBERTY NM.........................  STABILIZE ELLIS ISLAND HAZARDOUS            3,600,000          161          NAR            1            L
                                                    MATERIALS.
    STEAMTOWN NHS................................  REHABILITATE PARK ROADS..............       3,960,000          900          MAR            3            R
    STEPHEN MATHER TRAINING CTR..................  REHABILITATE TRAINING CENTER COMPLEX.       4,462,000            1         WASO            3            B
    SUNSET CRATER VOLCANO NM.....................  CONSTRUCT MAINTENANCE COMPLEX........       1,680,000          152          SWR            5            B
    SUNSET CRATER VOLCANO NM.....................  REHABILITATE PARK ROADS..............       4,224,000          900          WER            3            R
    THEODORE ROOSEVELT NP........................  RECONSTRUCT/RESURFACE PARK ROADS.....      11,880,000          164          RMR            3            R
    THEODORE ROOSEVELT NP........................  CONSTRUCT FLOOD PROTECTION...........         607,200          108          RMR            5            L
    THOMAS STONE NHS.............................  FULL SITE DEVELOPMENT AND RESTORATION       7,080,000          108          MAR            4            L
    TIMPANOGOS CAVE NM...........................  CONSTRUCT VISITOR/ADMINISTRATIVE            7,605,000          135          RMR            3            B
                                                    CENTER COMPLEX.
    TIMUCUAN ECOL. and HIST. PRESERVE............  CONSTRUCT VISITOR FACILITIES FOR NEW        9,728,000          128          SER            4            B
                                                    AREA.
    TONTO NM.....................................  CONSTRUCT VIS. CTR. RESTROOMS and           1,065,000          138          SWR            3            B
                                                    WASTEWATER PLANT.
    TONTO NM.....................................  RECONSTRUCT ENTRANCE/PICNIC ROADS and       1,848,000          135          WER            3            R
                                                    PARKING.
    ULYSSES S. GRANT NHS.........................  PRESERVE/RESTORE GRANT HOME AND SITE.      10,900,000          100          MWR            2            B
    UPPER DELAWARE S&RR..........................  DEVELOP INITIAL PARK VISITOR FACILITY       9,000,000          123          MAR            4            L
    UPPER DELAWARE S&RR..........................  ROEBLING BRIDGE RECONSTRUCTION (PHASE       2,640,000          110          MAR            5            R
                                                    II).
    UPPER DELAWARE SCENandREC.RIVER..............  COMPLETE INITIAL FACILITIES                 5,760,000          130          MAR            2            B
                                                    DEVELOPMENT.
    VALLEY FORGE NHP.............................  REPAIR/REHABILITATE HIST. STRUCT./         13,200,000          202          MAR            3            L
                                                    COLLECTION STORAGE.
    VANDERBILT MANSION NHS.......................  PRESERVE VANDERBILT MANSION..........       8,200,000          139          NAR            2            B
    VIRGIN ISLANDS NP............................  RECONSTRUCT LAMESHORE ROAD...........       1,980,000         127B          SER            3            R
    VOYAGEURS NP.................................  CONSTRUCT VISITOR FACILITIES.........       3,865,000          159          MWR            5            B
    VOYAGEURS NP.................................  IMPROVE CRANE LAKE ROAD..............      13,860,000          219          MWR            3            R
    VOYAGEURS NP.................................  IMPROVE WEST KABETOGAMA ROADS........         660,000          220          MWR            3            R
    WEIR FARM NHS................................  PRESERVE STRUCT./PROVIDE INITIAL           14,594,400          102          NAR            2            B
                                                    SUPPORT FACILITIES.
    WEIR FARM NHS................................  REHAB PARK ROADS AND PARKING.........         132,000          102          NAR            3            R
    WHISKEYTOWN-SHASTA-TRINITY NRA...............  COMPLETE SOUTH SHORE ROAD PAVING.....       3,300,000          109          WER            4            R
    WHITE SANDS NM...............................  CONSTRUCT PARK HEADQUARTERS BUILDING.       2,160,000          109          SWR            5            B
    WHITE SANDS NM...............................  CONSTRUCT MAINTENANCE/STORAGE               1,800,000          128          SWR            5            B
                                                    BUILDING.
    WILSON'S CREEK NB............................  REPLACE DETERIORATING WASTEWATER            1,080,000          325          MWR            1            U
                                                    PLANT.
    WILSON'S CREEK NB............................  REHABILITATE MAIN ENTRANCE ROAD......         660,000          173          MWR            3            R
    WOLF TRAP FARM PARK..........................  ALLEVIATE HAZARDOUS TRAFFIC                41,184,000          208          NCR            1            R
                                                    CONGESTION.
    WOLF TRAP FARM PARK..........................  EXPAND RESTROOMS and CONCESSIONS.....       4,800,000          130          NCR            5            B
    WRANGELL-ST.ELIAS NP and PRES................  CONSTRUCT VISITOR CENTER/HEADQUARTERS       7,100,000        100GL          AKR            4            B
                                                    FACILITY.
    WRIGHT BROTHERS NM...........................  CONSTRUCT AUDITORIUM ADDITION TO           11,400,000          115          SER            5            B
                                                    VISITOR CENTER.
    WUPATKI NM...................................  REHABILITATE MTNCE. AREA--SUNSET            1,700,000          101          SWR            3            B
                                                    CRATER VOLCANO.
    WUPATKI NM...................................  REHABILITATE SEWER LAGOONS...........       2,222,000          192          SWR            1            U
    WUPATKI NM...................................  RECONSTRUCT MAIN LOOP ROAD...........       7,920,000          103          SWR            3            R
    YELLOWSTONE NP...............................  REPAIR/REPLACE DETERIORATED HOUSING..     100,000,000          817          RMR            3            H
    YELLOWSTONE NP...............................  REHABILITATE FISHING BRIDGE                36,000,000          813          RMR            3            L
                                                    CAMPGROUND AND MARINA.
    YELLOWSTONE NP...............................  RECONSTRUCT ROADS PARKWIDE...........     250,800,000          254          RMR            3            R
    YELLOWSTONE NP...............................  UPGRADE MADISON and NORRIS UTILITY          4,716,000          636          RMR            3            U
                                                    PLANTS.
    YELLOWSTONE NP...............................  IMPLEMENT LAKE DEVELOPMENT CONCEPT          4,800,000          821          RMR            3            L
                                                    PLAN.
    YELLOWSTONE NP...............................  ALTERNATIVE TRANSPORTATION MODES.....       1,320,000         2008          RMR            5            R
    YOSEMITE NP..................................  RESTORE VALLEY BY REMOVING/               137,900,000          504          WER            2            L
                                                    REDESIGNING FACILITIES.
    YOSEMITE NP..................................  UPGRADE FAILING SEWAGE AND WATER           10,500,000          383          WER            1            U
                                                    SYSTEMS.
    YOSEMITE NP..................................  REHABILITATE FAILING ELECTRICAL             8,100,000          473          WER            1            U
                                                    SYSTEM.
    YOSEMITE NP..................................  REPLACE LIFE SAFETY COMMUNICATIONS          5,502,000           44          WER            1            U
                                                    SYSTEM.
    YOSEMITE NP..................................  REPLACE/REHABILIATE OBSOLETE HOUSING.      31,440,000          651          WER            1            H
    YOSEMITE NP..................................  RELOCATE SOUTH ENTRANCE and MARIPOSA       31,152,000          140          WER            2            L
                                                    GROVE FACILITIES.
    YOSEMITE NP..................................  RECONSTRUCT GLACIER POINT ROAD.......      15,840,000          843          WER            3            R
    YOSEMITE NP..................................  RECONSTRUCT EL PORTAL ROAD...........      26,796,000          505          WER            1            R
    YOSEMITE NP..................................  REHABILITATE WAWONA ROAD.............      27,984,000          565          WER            3            R
    YOSEMITE NP..................................  RELOCATE/REMOVE HOUSING FROM VALLEY..      34,584,000           46          WER            2            H
    YOSEMITE NP..................................  RECONSTRUCT TIOGA ROAD...............      46,200,000          146          WER            3            R
    YOSEMITE NP..................................  ALTERNATIVE TRANSPORTATION MODES.....      26,400,000         2003          WER            5            R
    YUKON-CHARLEY RIVERS NPRES...................  REHABILITATE HIST. BLDGS. and               3,181,000        100CC          AKR            3            B
                                                    CONSTRUCT NEW FACILITIES.
    ZION NP......................................  CONSTRUCT EMPLOYEE HOUSING...........       8,634,000          178          RMR            3            H
    ZION NP......................................  REBUILD PARK ROUTE 7.................       2,508,000          210          RMR            3            R
                                                                                         ----------------
          Total..................................  .....................................   5,587,776,410  ...........  ...........  ...........  ...........
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Objectives:

    1 = Health and safety.
    2 = Resource preservation.
    3 = Repair/rehabilitation of existing facilities.
    4 = New facilities in a new/developing park.
    5 = Additional facilities in an older/established park.

    Work type:

    B = Buildings: Visitor, park support, et cetra.
    H = Housing: Permanent, seasonal.
    L = Landscape work, site restoration, et cetra.
    R = Roads: FLHP, Non-FLHP, bridges, et cetra.
    U = Utilities: Water and sewer systems, et cetra.

                                  NATIONAL PARK SERVICE LINE-ITEM CONSTRUCTION PROGRAM
                                         [Servicewide priorities by fund group]
    ----------------------------------------------------------------------------------------------------------------
                                              Package
     SWP                 Park                  number             Project title           Field area      Amount
    ----------------------------------------------------------------------------------------------------------------
                                                   Small projects--under $4

          Longfellow NHS                           01  Protect/conserve structures              NE       1,642,001
                                                        and collections.
          Salem Maritme NHS                       202  Complete rehabilitation of               NE       1,042,760
                                                        Polish Club for multiple use.
          Gateway NRA3                            210  Rehabilitate Sandy Hook                  NE         884,250
                                                        Lighthouse.
          Great Smoky Mountains NP                 02  Reconstruct trails............           SE         969,610
          Eisenhower NHS                           01  Fire protection for historic             NE         975,438
                                                        structures.
          Natchez NHP6                            106  Restore William Johnson and              SE         590,247
                                                        rehabilitate McCallum Houses.
          John Muir NHS                           186  Relocate maintenance building.           PW       1,158,227
          Glen Canyon NRA                         429  Improve Lake Powell water                IM       1,020,288
                                                        quality.
          Historic Preservation                    01  Historic Preservation Training         WASO         847,570
           Trainin                                      Center rehabilitation.
          Boston African-American                 102  Rehabilitate African Meeting             NE       1,224,850
           NHS                                          House.
          Minute Man NHP                          170  Complete Battle Road Trail....           NE       1,175,175
          Glen Canyon NRA                         234  Enhance water quality and                IM       1,020,071
                                                        recreation.
          Grant-Kohrs Ranch NHS                   162  Construct collections storage            IM         860,029
                                                        facilities.
          Mammoth Cave NP                         187  Mitigate pollution of cave               SE       1,119,295
                                                        from parking lot runoff.
          Antietam NB5                            315  Stabilize and restore Antietam           NC       1,532,700
                                                        Battleground structures.
          Edison NHS16                            170  Preserve historic buildings              NE       2,804,207
                                                        and collections.
          Adams NHSS17                            108  Repair/rehabilitate Adams                NE       1,735,750
                                                        Carriage House.
          Minute Man NHP                         170A  Save historic structures and             NE       2,625,611
                                                        cultural landscape.
          Independence NHP                        417  Rehabilitate Bishop White                NE         854,222
                                                        House utilities.
          Sitka NHPS20                            101  Rehabilitate historic Priest's           AK       1,121,360
                                                        Quarters and Old School House.
          Assateague Island NS                     01  Sustainable bathhouses........           NE       1,038,830
          Crater Lake NP                          274  Rehabilitate Rim Village                 PW       1,845,790
                                                        historic structures and
                                                        landscape.
          Shiloh NMP23                            128  Halt loss of prehistoric earth           SE       1,460,650
                                                        mounds.
          Maggie Walker NHS                       116  Stabilize/restore historic               NE       1,916,457
                                                        resources.
          Jimmy Carter NHS                         01  Restore boyhood farm of Jimmy            SE       1,301,844
                                                        Carter.
          Kaloko-Honokohau NHP                    157  Construct entrance/parking,              PW       1,634,880
                                                        utilities, trails.
          Wind Cave NP                            149  Rehabilitate leaking utility             MW       1,965,000
                                                        lines to protect cave.
          Salem Maritime NHS                      203  Rehabilitate seawall and                 NE         772,900
                                                        moorings for accessibility.
          Morristown NHP                          324  Rehabilitate historic park               NE       1,694,608
                                                        buildings.
          Florissant Fossil Beds NM               145  Construct stump shelters to              IM       1,206,510
                                                        protect fossil resource.
          Denali NP and PRES                      105  Construct fire-emergency                 AK       1,616,540
                                                        services building and
                                                        headqtrs.
          Ulysses S. Grant NHS                   100A  Restore historic structures              MW       3,421,720
                                                        and provide visitor
                                                        facilities, Ph. I.
          Weir Farm NHS                           102  Rehabilitate Burlingham                  NE       1,323,100
                                                        Complex.
          Fort Point NHS                          393  Repair earthquake damage and             PW       2,136,679
                                                        repoint brickwork.
          Upper Deleware S&RR                     110  Complete site development--              NE         901,280
                                                        Delaware Aqueduct.
          Independence NHP                        414  Rehabilitate East Wing and               NE       1,203,024
                                                        West Wing exhibits.
          Hopewell Furnace NHS                    195  Stabilization of Anthracite              NE         909,140
                                                        Furnace.
          Lowell NHP38                            117  Complete Boott Mill...........           NE         957,822
          Colonial NHP                            402  Protect collections...........           NE       1,768,500
          Cape Cod NS0                            104  Health, access Salt Pond                 NE       2,836,150
                                                        Visitor Center.
          Golden Gate NRA                         348  Repair balconies on Alcatraz             PW       1,180,036
                                                        historic barracks.
          Haleakala NP                            223  Replace comfort station and              PW       3,240,940
                                                        wastewater system.
          Delaware Water Gap NRA                   04  Rehabilitate Dingman Falls               NE       2,139,626
                                                        site.
          Allegheny Portage NHS                   225  Staple Bend Tunnel                       NE       3,027,410
                                                        stabilization/development.
          Fort McHenry NM and                      01  Complete historic seawall                NE       2,210,358
           Shrine                                       repairs.
          President's Park                        473  Eliminate environmental                  NC         648,673
                                                        hazard, WhiteHouse greenhouse.
          George Washington MEM                   181  Theodore Roosevelt Memorial              NC       1,764,570
           PKWY                                         restoration.
          Katmai NP and PRES                      102  Lake camp development.........           AK       1,726,270
          Lake Mead NRA                           069  Upgrade water treatment at               PW       3,094,500
                                                        Katherine to comply with law.
          Gettysburg NMP                           02  Repair 22 historic monuments..           NE       2,011,868
          Rock Creek Park                         227  Restore historic Pierce Mill             NC       1,223,064
                                                        and Waterwheel.
          Booker T. Washington NM                  01  Rehabilitate visitor center...           NE       1,478,990
          Gettysburg NMP                           01  Protect historic structures...           NE       2,492,223
          Fredericksburg and                      107  Stabilize historic ruins and             NE       2,070,367
           Spotsylvania                                 resources.
          Cape Hatteras NS                        301  Construct a protective groin..           SE       2,020,712
          Petroglyph NM                            01  Visitor center rehabilitation            IM       1,156,141
                                                        and expansion.
          New River Gorge NR                      154  Visitor facilities--Middle               NE       1,841,965
                                                        Gorge.
          Hampton NHS8                            001  Reroof mansion and farmhouse..           NE       1,572,000
          Petrified Forest NP                     109  Rehabilitate Painted Desert              IM       2,850,512
                                                        Inn and Cabins.
          Fort Scott NHS                          227  Provide fire protection for              MW       1,140,846
                                                        historic structures.
          Colonial NHP                            400  Connect Jamestown water system           NE         958,920
          Chirichua NM                            241  Upgrade utilities,                       IM       1,201,270
                                                        headquarters/campground.
          Gateway NRA3                            220  Rehabilitate Ft. Tompkins at             NE       2,800,818
                                                        Ft. Wadsworth.
          Delaware Water Gap NRA                   01  Rehabilitate recreation site..           NE       2,689,430
          Wupatki NM65                            101  Rehabilitate maintenance area--          IM       1,700,380
                                                        Sunset Crater Volcano.
          Acadia NPS66                            320  Rehabilitate historic Carriage           NE       3,007,760
                                                        Road bridges.
          Mount Rainier NP                        399  Complete repair of Jackson               PW         994,602
                                                        visitor center roof.
          Pecos NHSS68                            160  Correct/rehabilitate Ranch               IM       1,989,321
                                                        Unit buildings.
          Padre Island NS                         215  Construct sewage treatment               IM       1,046,235
                                                        facilities.
          Kenai Fjords NP                         110  Improve access and visitor               AK       2,849,888
                                                        facilities, Exit Glacier.
          San Antonio Missions NHP                190  Improve health, safety,                  IM       3,111,250
                                                        visitor services--San Jose
                                                        Mission.
          Manassas NBP                            155  Preserve historic resources              NC       1,388,558
                                                        parkwide--stabilize and
                                                        restore.
          Mississippi NR and RA                   110  Develop partnership education            MW       2,563,690
                                                        facilities in Science Museum.
          Fire Island NS                           01  Sustainable Student Discovery            NE       2,841,086
                                                        Camp.
          Eisenhower NHS                           02  Rehabilitate historic barns...           NE       2,725,826
          Statue of Liberty NM                     02  Complete historic seawall                NE       2,943,570
                                                        rehabilitation.
          Wupatki NM77                            192  Rehabilitate sewer lagoons....           IM       2,221,760
          Cape Cod NS8                            226  Replace beach facilities......           NE       2,913,440
          Carlsbad Caverns NP                     198  Rehabilitate highspeed                   IM       2,063,250
                                                        elevators and shaft.
          Grand Portage NHS                       106  Remove housing and mtnce.                MW       3,239,500
                                                        activities from hist.
                                                        resources.
          Catoctin Mountain Park                  989  Replace failing electrical               NC         721,810
                                                        system at Catoctin Mtn. Park.
          Saint-Guadens NHS                       121  Improve sanitary and visitor             NE       2,166,740
                                                        facilities.
          Martin Van Buren NHS                    101  Construct visitor restrooms              NE       2,210,358
                                                        and park staff facilities.
          Denali NP& PRES                         120  Rehabilitate Entrance Area               AK       3,407,310
                                                        utilities, water and sewer.
          Bryce Canyon NP                         103  Reconstruct North and Sunset             IM       1,703,000
                                                        Campgrounds.
          Fredericksburg and                      106  Protect park boundary.........           NE         798,381
           Spotsylvania
          North Cascades NP                       107  Repair/stabilize Golden West             PW       2,485,916
                                                        visitor center--adaptive use.
          Gateway NRA8                            219  Rehabilitate Battery Weed                NE       3,278,697
                                                        seawall and dock.
          Denali NP and PRES                    100RC  Rehabilitate Entrance Area               AK       2,416,950
                                                        utilities, electrical.
          Katmai NP and PRES                      103  Maintenance and curation                 AK       3,333,950
                                                        building.
          Montezuma Castle NM                     100  Develop Montezuma Well                   IM       2,936,829
                                                        infrastructure and facilities.
          Pictured Rocks NL                       168  Construct administration and             MW       3,792,922
                                                        public use facility.
          Tonto NM S93                            138  Construct visitor center                 IM       1,065,030
                                                        restrooms and wastewater
                                                        treatment.
          Hovenweep NM                            134  Build visitor center/ranger              IM       3,669,310
                                                        station and support
                                                        facilities.
          Vicksburg NMP                           300  Replace Cairo exhibit roof....           SE       1,945,397
          Chickamauga-Chattanooga                 102  Improve park roads and provide           SE       2,209,970
           NMP                                          public restrooms.
          Delaware Water Gap NRA                   02  Sustainable comfort stations..           NE       2,042,370
          Hampton NHS8                             02  Construct restrooms and                  NE       1,082,060
                                                        connect sewer.
          Big Bend NP9                            274  Redesign and rehabilitate                IM       3,168,890
                                                        deteriorated campground.
          Big Bend NP0                            132  Rehabilitate/expand failing              IM       3,183,300
                                                        water system.
          Harpers Ferry Center                    172  Accessibility modifications-           WASO       1,620,470
                                                        HFC/IDC elevator.
          Big Cypress NPRES                        02  Additional lands operations              SE       1,721,340
                                                        facility.
          Big Bend NP3                            278  Rehabilitate and expand sewage           IM       3,227,840
                                                        treatment.
                                                                                                   -----------------
                Subtotal, small           ...........  ..............................  ...........     195,445,548
                 projects
                                                                                                   -----------------
                                              Medium projects--$4 to $10 million

              Glacier Bay NP&PRES                 104  Upgrade utilities.............           AK       5,278,335
              Fort Smith NHS                      200  Rehabilitate historic                    MW       4,075,257
                                                        courthouse/jail for visitor/
                                                        admin. use.
              Acadia NP                           232  Upgrade utilities and                    NE       5,257,030
                                                        restrooms, Ph. I.
              Castillo de San                     116  Stabilize Castillo de San                SE       4,279,770
               Marcos NM                                Marcos National Monument.
              Shenandoah NP                       455  Upgrade utility systems.......           NE       4,953,110
              Gateway NRA                         169  Rehabilitate utilities at                NE       5,690,492
                                                        Floyd Bennett Field.
              Sitlka NHP                          106  Rehabilitate visitor center              AK       4,076,720
                                                        and curatorial buildings.
              Zion NP8                            226  Complete visitor                         IM       9,097,950
                                                        transportation system.
              Lake Mead NRA                        01  Upgrade water treatment to               PW       8,546,716
                                                        comply with the law.
              Hot Springs NP                      145  Abate lead-based paint in                MW       4,709,450
                                                        historic structures.
              Stephen T. Mather                    01  Mather Training Center                 WASO       4,461,860
               Training Ce                              rehabilitation.
              Bryce Canyon NP                     125  Rehabilitate visitor and                 IM       4,381,950
                                                        education center.
              Big Cypress NPRES                    01  Scenic corridor visitor safety           SE       4,793,290
                                                        hwy improvements.
              Yellowstone NP                      854  Replace sewage plant--Old                IM       5,895,000
                                                        Faithful.
              Ulyssess S. Grant NHS              100B  Restore historic structures              MW       7,531,190
                                                        and provide visitor
                                                        facilities, Ph. II.
              Yellowstone NP                      855  Replace water and sewer                  IM       6,261,800
                                                        system--Norris Junction.
              Horace M. Albright                   01  Albright Training Center               WASO       6,240,840
               Training C                               rehabilitation.
              Mississippi NR&RA                   114  Construct Mississippi River              MW       4,280,726
                                                        partnership education center.
              Mammoth Cave NP                     171  Renovate visitor center.......           SE       5,326,962
              Glacier NP                          165  Replace failed headquarters              IM       9,494,224
                                                        sewer and water systems.
              Timpanogos Cave NM                  135  Reconstruct interagency                  IM       7,604,550
                                                        visitor center complex.
              Lake Meredith NRA                   210  Reconstruct, reconnect, and              IM       4,400,552
                                                        repair water system.
              Home of FDR NHS                     137  Rehabilitate/restore Franklin            NE       4,736,960
                                                        Delano Roosevelt NHS.
              Dinosaur NM                         204  Construct and supply                     IM       4,660,419
                                                        curatorial facility.
              Congaree Swamp NM                   101  Construct permanent facilities           SE       8,981,360
              National Capital                    612  Anacostia operations facility--          NC       7,217,555
               Parks-East                               full rehabilitation.
              Timucuan Ecological $               128  Construct visitor facilities             SE       9,728,060
               Histori                                  for new area.
              Mount Rushmore NMEM                 182  Replace wastewater treatment             MW       8,988,788
                                                        system.
                                                                                                   -----------------
                Subtotal, medium          ...........  ..............................  ...........     170,950,915
                 projects
                                                                                                   -----------------
                                              Large projects--$10 to $25 million

              Brown v. Board of                   100  Rehabilitate Monroe School for           MW      11,031,510
               Education N                              visitor and admin. uses.
              Sequoia NP                          200  Restore Giant Forest and                 PW      25,241,080
                                                        construct day-use facility.
              Wrangell-St. Elias NP               117  Construct visitor center and             AK      14,074,640
               and PRES                                 headquarters.
              Kenai Fjords NP                     140  Build cooperative VC, HQ,                AK      11,542,410
                                                        conference center, Seward.
              National Capital                    758  Preservation of the Lincoln              NC      19,893,220
               Parks-Centra                             and Jefferson Memorials.
              Yosemite NP                         383  Improve Tuolumne water and               PW      10,486,550
                                                        wastewater systems.
              Grand Canyon NP                      01  Construct South Rim                      IM      21,956,221
                                                        orientation.
              National Capital                    448  Preservation and                         NC      21,536,819
               Parks-Centra                             rehabilitation of the
                                                        Washington Monument.
              Yosemite NP                         504  Restore Yosemite Valley--                PW      24,452,460
                                                        remove/consolidate facilities.
              Everglades NP                       191  Rehabilitate Flamingo water              SE      17,647,167
                                                        and wastewater systems.
              Fort Sumpter NM                     105  Construct tour boat facility --          SE      10,724,075
                                                         Dockside II.
              Sequoia NP                          130  Complete infrastructure for              PW      13,942,330
                                                        Wuksachi Village.
                                                                                                   -----------------
                Subtotal, large           ...........  ..............................  ...........     202,528,482
                 projects
                                                                                                   -----------------
                Total, line item          ...........  ..............................  ...........     568,924,946
                 construction
                 program
    ----------------------------------------------------------------------------------------------------------------

                                  SERVICEWIDE PRIORITIES--FEDERAL LANDS HIGHWAY PROGRAM

    ----------------------------------------------------------------------------------------------------------------
    FLHP
     PRI          Park           Package      Reg      Reg pri         Package title          Estimate     Objective
    ----------------------------------------------------------------------------------------------------------------
      30 ACADIA                     287        NAR         18  REHABILITATE TOUR LOOP        20,000,000          2
                                                                ROAD AND BRIDGES.
      52 ACADIA                     233        NAR         33  REPLACE PARK ENTRANCE          1,000,000          4
                                                                ROAD.
      51 AMISTAD                    180        SWR         28  RECONSTRUCT PARK ROADS..       2,000,000          3
      48 ANTIETAM                   271        NCR         34  CONSTRUCT NEW TOUR ROADS       2,405,000          2
      50 ASSATEAGUE                 231        MAR         53  RECONSTRUCT ROADS AND          6,500,000          3
                                                                PARKING, MD & VA.
      34 BADLANDS                   120        RMR         24  REHAB 30 MILES MAIN ROAD      15,700,000          3
      11 BIG BEND                   223        SWR         10  RECOSTRUCT MAJOR PARK         18,400,000          3
                                                                ROADS.
      71 BIG THICKET                113        SWR         45  STABILIZE PARK ROADS....       1,600,000          3
       6 BLUE RIDGE PARKWAY         503        SER          5  RESURFACE 25 MILES OF          5,000,000          3
                                                                PARKWAY.
      23 BOSTON                     154        NAR         14  IMPROVE CHARLESTOWN NAVY       4,150,000          1
                                                                YARD ROADS.
      28 BRYCE CANYON               106        RMR         18  RECONSTRUCT ROADS             21,000,000          3
                                                                PARKWIDE.
      40 CANYON DE CHELLY           169        SWR         25  REHAB PARK ROADS........       1,500,000          3
      70 CAPE COD                   210  .........        NAR  REHAB PARK ROADS AND           2,626,000          3
                                                                PARKING.
      86 CARLSBAD CAVERNS           180        SWR         74  RESURFACE ENTRANCE ROAD          500,000          3
                                                                AND PARKING.
      46 CHICKAMAUGA AND            142        SER         19  RELOCATE U.S. HIGHWAY 27      19,700,000          3
          CHATTANOOGA                                           IN GEORGIA.
      63 CHICKAMAUGA AND            102        SER         27  IMPROVE PARK ROADS AND 2       5,062,000          3
          CHATTANOOGA                                           BRIDGES.
      20 CHICKASAW                  156        SWR         22  RECONSTRUCT LAKE               2,700,000          3
                                                                DISTRICT ROADS.
      27 COLONIAL                   251        MAR         28  REPAIR/REHAB COLONIAL         13,000,000          3
                                                                PARKWAY.
      99 COULEE DAM                 266        PNR         33  RESURFACE ROADS AND            1,700,000          1
                                                                PARKING.
      60 CRATER LAKE                235        PNR         23  RESURFACE ROAD-ANNIE           5,500,000          1
                                                                SPRINGS TO WEST BDRY.
      80 CRATER LAKE                253        PNR         25  RESURFACE ROUTE 7/             1,400,000          1
                                                                PINNACLES ROAD, 6.1
                                                                MILES.
      87 CRATER LAKE                256        PNR         26  RESURFACE ROAD, CLOUDCAP       3,900,000          1
                                                                TO HEADQUARTERS.
      77 DEATH VALLEY               283        WER         47  REHAB BADWATER ROAD AND       14,803,000          3
                                                                SPUR ROADS.
      16 DELAWARE WATER GAP         292        MAR         13  REHAB/REPAIR ROUTE 209        52,170,000          4
                                                                (22MI) & 6 BRIDGES.
      84 EDISON                     170  .........        NAR  REHAB VISITOR CENTER           1,500,000          3
                                                                PARKING.
      41 FEDERICKSBURG              230        MAR         36  REHAB PARK ROADS........       7,020,000          3
       2 FOOTHILLS PARKWAY         109A        SER          8  CONSTRUCT PARKWAY LINK..      32,500,000          4
      38 FOOTHILLS PARKWAY          109        SER         17  COMPLETE PARKWAY (33.5       135,400,000          4
                                                                MILES).
       1 GATEWAY                    185        NAR          5  REHABILITATE PARK ROADS.      25,000,000          1
      58 GATEWAY              .........        111        NAR  REHAB SANDY HOOK MAIN          8,500,000          1
                                                                ROAD.
      91 GATEWAY                    115        NAR  .........  REHAB MILLER FIELD ROAD        4,238,000          3
                                                                AND PARKING.
       8 GEO WASHINGTON M           461        NCR          8  REHABILITATE TURKEY RUN        2,900,000          2
          PKWY                                                  BRIDGE.
      17 GEO WASHINGTON M           836        NCR         16  RECONSTRUCT SPOUT RUN          7,210,000          1
          PKWY                                                  PARKWAY.
      67 GEORGE WASHINGTON M        464        NCR         61  REHABILITATE MEMORIAL          2,500,000          3
          PKWY                                                  AVENUE BRIDGE.
      75 GEORGE WASHINGTON M        461        NCR         77  SPROUT RUN TO 123.......       5,800,000          1
          PKWY
      79 GEORGE WASHINGTON M        461        NCR         85  123 TO SPROUT RUN.......       5,800,000          1
          PKWY
      24 GETTYSBURG                 106        MAR         22  REHAB PARK ROADS........       8,253,000          3
      10 GLACIER                    303        RMR         14  REHAB GOING TO THE SUN         9,000,000          3
                                                                ROAD, 55 MILES.
      65 GLACIER                    312        RMR         28  RESURFACE CAMAS ENTRANCE       3,000,000          3
                                                                ROAD.
       5 GRAND CANYON               110        WER         10  RECONSTRUCT SOUTH RIM         22,794,000          3
                                                                ROADS.
      55 GRAND CANYON               196        WER         34  RECONSTRUCT WEST RIM           6,157,000          1
                                                                DRIVE.
      73 GRAND CANYON               272        WER         44  REALIGN/REPAIR EAST RIM       11,266,000          3
                                                                ROAD.
      26 GRAND TETON                328        RMR         17  COMPLETE FINAL SURFACE,        9,000,000          3
                                                                31.7 MILES.
      15 GREAT SMOKY                319        SER         12  REPLACE FOUR BRIDGES....       2,800,000          3
          MOUNTAINS
      54 GREAT SMOKY                324        SER         25  REHAB ABRAMS,                  1,100,000          3
          MOUNTAINS                                             GREENBRIER, BIG CREEK
                                                                RDS.
      89 GUADALUPE MOUNTAINS        207        SWR         76  RESURFACE DOG CANYON             800,000          3
                                                                ENTRANCE ROAD.
      22 HERBERT HOOVER             162        MWR         24  REHABILITATE PARK ROADS.         800,000          3
      96 HOME OF FDR/               138        NAR  .........  REHAB ROADS, BRIDGES,          6,140,000          3
          VANDERBILT MANSION                                    AND PARKWAY.
      33 JOSHUA TREE                173        WER         24  RECONSTRUCT UNSAFE            18,471,000          3
                                                                ROADS, PARKING.
       3 KATMAI                     100        AKR         10  RELOCATE BROOKS CAMP           2,356,000          2
                                                                FAC, REPAIR VTTS ROAD.
      12 LAKE MEAD                  242        WER         12  SAFETY RECONSTRUCTION         24,890,000          1
                                                                LAKESHORE ROAD.
      36 LAKE MEAD                  457        WER         27  REHAB NORTH SHORE ROAD &      51,090,000          1
                                                                CONNECT ACCESS.
      66 LAKE MEREDITH              185        SWR         39  RECONSTRUCT ACCESS ROADS       5,900,000          3
                                                                AND PARKING.
      62 LASSEN VOLCANIC            101        WER         43  REPAIR MAIN PARK ROAD...      13,493,000          3
      74 LAVA BEDS                  302        WER         46  RECONSTRUCT SOUTHEAST          5,895,000          3
                                                                ENTRANCE ROAD.
      94 LOWELL                     101        NAR          3  REHAB VISITOR CENTER             688,000          4
                                                                PARKING.
      81 LYNDON B. JOHNSON          193        SWR         47  REHAB PARK ROADS........       1,500,000          3
      31 MESA VERDE                 278        RMR         20  CORRECT ENTRANCE ROAD          8,000,000          3
                                                                FAILURE.
     9.5 MINUTE MAN                 170        NAR  .........  REHABILITATE BATTLE ROAD       4,144,000          3
      45 MORRISTOWN                 187        NAR         23  REHAB PARK TOUR ROADS...       5,381,000          3
      14 MOUNT RAINIER             349A        PNR          9  REHAB HIGHWAY 410.......      10,000,000          1
      37 MOUNT RAINIER             349B        PNR         22  REHAB HIGHWAY 123.......      25,000,000          1
      97 MOUNT RAINIER              386        PNR         32  RECONSTRUCT BACKBONE           3,000,000          1
                                                                RIDGE VIADUCT.
       4 NATCHEZ TRACE              250        SER          4  RESURFACE VARIOUS              5,000,000          3
          PARKWAY                                               SECTIONS OF PARKWAY.
      25 NATCHEZ TRACE              300        SER         11  CONSTRUCT PARKWAY.......      38,900,000          5
          PARKWAY
      69 NATCHEZ TRACE              238        SER         31  CONSTRUCT FOUR                 4,000,000          5
          PARKWAY                                               OVERPASSES.
      90 NAVAJO                     144        SWR         77  REHAB ENTRANCE AND               500,000          3
                                                                CAMPGROUND ROADS.
      35 NCP-CENTRAL                450        NCR         23  RECONSTRUCT EAST BASIN         2,600,000          1
                                                                DRIVE.
      61 NCP-CENTRAL                405        NCR         45  RECONSTRUCT IND./MAINE         3,500,000          3
                                                                AVE, EASTBOUND.
      64 NCP-CENTRAL               405B        NCR         53  RECONSTRUCT JEFFERSON          2,500,000          3
                                                                DRIVE.
      72 NCP-CENTRAL               405D        NCR         69  RECONSTRUCT LINCOLN MEM        3,500,000          1
                                                                CIRCLE, APPROACHES.
      83 NCP-CENTRAL               405C        NCR         93  RECONSTRUCT ROADS, EAST        4,400,000          3
                                                                POTOMAC PARK.
     103 NEZ PERCE                  159        PNR         36  REPLACE SPALDING ROADS         1,000,000          3
                                                                AND PARKING.
      18 NORTH CASCADES             404        PNR         12  REPLACE BRIDGES-NEWHALEM       6,000,000          1
                                                                & HARLEQUIN.
      92 NORTH CASCADES             343        PNR         28  RECONSTRUCT CASCADE              800,000          1
                                                                RIVER ROAD.
      95 NORTH CASCADES             344        PNR         29  REHAB STEHEKIN ROAD.....       2,000,000          1
      68 OLYMPIC                    311        PNR         24  RECONSTRUC EAST BEACH/         4,700,000          1
                                                                LOG CABIN ROADS.
     101 OLYMPIC                    406        PNR         34  CONSTRUCT TWIN CREEK             650,000          2
                                                                BRIDGE.
     102 OLYMPIC                    407        PNR         35  REPLACE FINLEY CREEK           1,050,000          3
                                                                BRIDGE.
      42 OZARK                      506        MWR         32  REHAB PEAVINE ROAD......       3,300,000          3
      76 PADRE ISLAND               200        SWR         46  REROUTE BIRD ISLAND              900,000          3
                                                                BASIN ROAD.
      59 PECOS                      137        SWR         31  REHAB ENTRANCE ROAD.....         500,000          3
      57 PETERSBURG                 132        MAR         54  REHABILITATE MAIN PARK         2,000,000          3
                                                                ROAD & BRIDGES.
      47 RICHMOND                   129        MAR         38  REHAB PARK ROADS........       2,800,000          3
      39 ROCK CREEK PARK            318        NCR         37  REHAB ROCK CREEK PARKWAY       4,140,000          1
                                                                & ADJACENT TRAIL.
      85 SALINAS PUEBLO             173        SWR         48  REHAB ENTRANCE ROAD.....         900,000          3
          MISSIONS
      93 SAN ANTONIO                185        SWR         83  REHAB PARKING AREAS.....         600,000          3
          MISSIONS
      29 SARATOGA                   159        NAR         17  REHABILITATE TOUR ROADS.       6,000,000          2
      98 SARATOGA                   160        NAR  .........  REHAB ROADS AND PARKING.         439,000          3
      13 SEQUOIA AND KINGS          840        WER         15  RECONSTRUCT GENERALS          47,160,000          3
          CANYON                                                HIGHWAY.
      82 SEQUOIA AND KINGS          336        WER         50  REPLACE CEDAR GROVE            3,930,000          3
          CANYON                                                BRIDGE.
      19 SHENANDOAH                 125        MAR         18  RECONSTRUCT SKYLINE           31,000,000          3
                                                                DRIVE.
      56 SHILOH                     138        SER         26  RESURFACE PARK TOUR            1,165,000          3
                                                                ROADS.
      53 THEODORE ROOSEVELT         164        RMR         26  RECONSTRUCT/RESURFACE          9,900,000          3
                                                                PARK ROADS.
       9 VICKSBURG                  131        SER         14  RESURFACE ALL BITUMINOUS-      2,355,000          1
                                                                PAVED ROADS.
     100 WEIR FARM                  102        NAR  .........  REHAB PARK ROADS AND             144,000          3
                                                                PARKING.
      32 WILSON'S CREEK             173        MWR         25  REHAB MAIN ENTRANCE ROAD         500,000          3
      44 WUPATKI                    103        SWR         26  RECONSTRUCT MAIN LOOP          6,100,000          3
                                                                ROAD.
       7 YELLOWSTONE                254        RMR         12  RECONSTRUCT ROADS            227,000,000          3
                                                                PARKWIDE.
      21 YOSEMITE                   140        WER         22  RELOCATE SOUTH ENTRANCE       25,676,000          2
                                                                ROAD/MARIPOSA.
      43 YOSEMITE                   843        WER         28  RECONSTRUCT GLACIER           14,410,000          3
                                                                POINT ROAD.
      49 YOSEMITE                   505        WER         31  RECONSTRUCT EL PORTAL         26,593,000          1
                                                                ROAD.
      78 YOSEMITE                   565        WER         48  REHABILITATE WAWONA ROAD      27,772,000          3
      88 YOSEMITE                   146        WER         51  RECONSTRUCT TIOGA ROAD..      45,850,000          3
                                                                                        ----------------
               SERVICEWIDE    .........  .........  .........  ........................   1,293,836,000  .........
                TOTAL--FLHP
                PROGRAM

    ----------------------------------------------------------------------------------------------------------------
         Objective:

         1 = Health and safety.
         2 = Resource protection.
         3 = Repair/rehabilitation of exiting facilities.
         4 = New facilities in a new/developing park.
         5 = Additional facilities in an older/established park.

                                  park housing

        Senator Burns. One thing that was of concern, I noticed an
    article in the paper that came out--and you might address
    this--that they are building some new homes for employees in
    Yellowstone Park, of which there is a 1,600 square foot home at
    a cost of around $300,000. Could you tell me what would inflate
    the construction of a home, especially in view of the fact that
    there is no land cost involved in that?
        Secretary Babbitt. Senator, I would be happy to give you
    the facts and figures on that. I am not familiar with the
    specific issue, but it is a fair question, and I will be happy
    to give you a response.
        [The information follows:]

                    Yellowstone National Park Housing Costs

        Yellowstone National Park has not and does not plan to
    build any 1,600 square foot homes that cost $300,000. This
    derived figure was an estimate provided by an outside
    contractor for an analysis in which Yellowstone managers were
    deliberately conservative. As such, Yellowstone managers feel
    that these numbers represent a ``worst case scenario,'' and
    that there are several initiatives underway that may
    significantly reduce these costs.
        Notwithstanding these facts, there are several expenses
    that are included in the construction of a home in Yellowstone
    National Park that are frequently overlooked when comparing to
    the cost of a home on the commercial market. Circumstances
    related to the following components impact the final cost:
        Planning and design.--The planning for and design of houses
    in Yellowstone National Park is more complicated than that of
    houses in developed communities. The issues that must be
    addressed during this initial phase range from impacts on
    cultural and natural resources to ensuring adequate
    accessibility to minimizing the visual impact of homes on
    landscapes. This planning often requires time-consuming
    consultation with State Historic Preservation Offices,
    particularly when historic areas will be impacted.
        Frequently, the costs associated with county planning and
    designers in non-park houses are recovered by taxes and impact
    fees and thus not included in the ``price'' of a house.
    Yellowstone includes the costs of these components when
    identifying the price of a structure.
        Basic construction.--Basic construction costs are more
    expensive in many national parks than in surrounding
    communities. The short construction season, transportation of
    material and employees, and the lack of adequate contractor
    housing all inflate these costs. By way of example, concrete
    delivered to the Old Faithful area in Yellowstone National Park
    costs $105 per cubic yard. The same concrete delivered in
    nearby Bozeman, Montana, is $65 per cubic yard.
        Construction equipment entering the park is pressure washed
    to prevent the spread of noxious weeds. New housing must also
    withstand snow weighing as much as 150 pounds/square foot and
    is designed to withstand zone four earthquakes (the same
    seismic zone as San Francisco). These stringent requirements,
    which must be applied to homes for Federal employees, are not
    necessarily applied to the ``comparable'' homes outside of the
    park.
        Utility systems.--Housing that can use existing utility
    systems is considerably cheaper than housing for which
    utilities must be provided. In many cases utilities are already
    in place in non-park municipalities.
        Landscaping/revegetation.--Unlike many non-park homes, the
    Yellowstone housing costs also include the revegetation
    necessary to prevent erosion and minimize the visual impact on
    the surrounding landscape.
        In the case of any of these cost drivers, there are
    significant economies of scale when constructing multiple
    houses. Unfortunately, housing money is typically allocated to
    Yellowstone incrementally. As a result, ``overhead'' must be
    factored into each discrete project and park managers cannot
    take advantage of these economies.

                                three-state area

        Senator Burns. We are building in a three-State area,
    probably, within that Park that would cost less than one-third
    of the figure that was given on that. And I would like to know
    what circumstances or elements figure in the cost of those
    homes that would drive that cost that high.
        Secretary Babbitt. I would be pleased to respond in
    writing.

                       park infrastructure priority list

        Senator Burns. And if you could respond to me on the
    backlog of your infrastructure needs on the Park Service, and
    where the--and I would like to have your priority list on where
    we should be concentrating our efforts. I think it behooves all
    of us. I know ours is just a parochial thing, because Glacier
    and Yellowstone affect us, but I know we have infrastructure in
    other parts of the country that would be also high on your
    list, too.
        Secretary Babbitt. Senator, I have just one specific
    observation relative to Glacier, and certainly to Yellowstone,
    where the road issue is really critical. I suspect that
    Yellowstone currently has a larger backlog of road construction
    and maintenance than any other two or three parks put
    together--certainly in the lower 48 at least. I would hope that
    we could, together, be looking at the ISTEA reauthorization, at
    all of the Federal road programs, and just examine what is a
    fair allocation, fair earmarking, from Federal highway programs
    to at least assist with some part of this.

                        yellowstone national park--roads

        Senator Burns. Well, I think that is a good suggestion. But
    you know we allocate or we budget so much, and I cannot see
    that anything has been done for the roads in Yellowstone Park
    at all. I cannot see anything that is improving that road
    situation. And of course, it is a park that has quite a lot of
    traffic, and the pressure is intense. So if I could get some
    kind of a report. And I would be happy to work with you in the
    allocation of those infrastructure things.

                               yellowstone--bison

        As far as the bison thing, you know I have talked about the
    bison thing 100 times. You knew it was going to come up today.
    And I am going to beat up on it. But I have beat up on you on
    that because--have you read this letter, the April 24 letter
    that was written to John Tarburton, the President of the
    National Association of State Departments of Agriculture, from
    the White House?
        Secretary Babbitt. Senator, I am not certain. I do not
    think so.
        Senator Burns. I think that the White House was--and I
    would like to put this in the record, Mr. Chairman, if I could.
    It was a response, I think, to Mr. Tarburton with regard to
    animal health and the impact that we might have on certain
    statuses of parks and the wildlife that is contained in those
    parks.
        Senator Gorton. The letter will be included in the record.
        [The letter follows:]
                       Letter From President Bill Clinton
                                               The White House,
                                        Washington, DC, April 24, 1997.
    Mr. John F. Tarburton,
    President, National Association of State Departments of Agriculture,
    Washington, DC.
        Dear John: Thank you for your letter regarding the management of
    bison in Yellowstone National Park. I understand your concerns.
        On March 19, 1997, the National Park Service, the U.S. Forest
    Service, and the Animal and Plant Health Inspection Service met with
    representatives of the State of Montana to continue development of a
    long-range bison management plan. A number of alternatives are being
    considered, with the understanding that any viable alternative must,
    among other things, address bison population size and distribution;
    clearly define a boundary line beyond which bison will not be
    tolerated; address the risk that bison pose to public safety and
    private property; protect livestock from the risk of brucellosis;
    protect the state of Montana from any risk to its brucellosis-free
    status; and commit to the eradication of brucellosis from bison and
    other wildlife.
        I hope this adequately addresses your concerns. Thanks again for
    writing.
                Sincerely,
                                                          Bill Clinton.

                             bison management plan

        Senator Burns. It says:

        On March 19, the National Park Service, the United States
    Forest Service and the Animal Plant and Health Inspection
    Service met with representatives of the State of Montana to
    continue development of the long-range bison management plan. A
    number of alternatives are being considered, with the
    understanding that any viable alternative must, among other
    things, address the bison population size and distribution,
    clearly define a boundary line between which bison will not be
    tolerated, address the risk that bison pose to public safety
    and private property, protect livestock from the risk of
    brucellosis, protect the State of Montana from any risk to its
    brucellosis-free status, and commit to the eradication of
    brucellosis from bison and other wildlife.
        I hope this adequately addresses your concerns, and thanks
    again.

        And it is signed by the President.
        This letter would indicate that you are at odds, then, with
    your present policy; you are at odds with the White House. Is
    that not a correct assumption?
        Secretary Babbitt. I do not think that is likely. It is a
    large organization. Whoever wrote that letter probably did not
    talk with me. I certainly do not remember it. I suspect that
    any differences in nuance or language is because it may have
    been written by 1 of the 20-somethings in the White House
    correspondence unit. It is entirely possible.
        Senator Burns. It has been suggested by your friends that
    the national regulation plan you have for parks, some of those
    plans are not working. With this in mind, can you explain to
    the committee how and why we continue to put forth a failed
    policy of natural regulation of wildlife in Yellowstone Park?
        Secretary Babbitt. Well, I do not consider it a failed
    policy. We could discuss that today or elsewhere. I think it is
    indeed a well considered and productive and successful policy.
        Senator Burns. 1,400 bison will starve to death this
    winter. Is that the policy?
        Secretary Babbitt. Well, I do not know of any policy in
    this administration or elsewhere which is directed at making
    sure that animals do not starve.
        Senator Burns. Well, I guess that is the difference in the
    way we look at things, is it not?
        Secretary Babbitt. No; I think our differences, frankly, go
    much beyond that. For example, I am on the record as being
    adamantly opposed to the continuing slaughter of these animals.
        Senator Burns. Mr. Secretary, we are not talking about
    slaughter of animals. We are talking about a park service that
    has allowed 1,400 bison to starve to death. That was not done
    by anybody.
        Secretary Babbitt. Well, Senator, the plain fact is that
    several thousand animals were slaughtered by the State of
    Montana, and we are opposed to that.
        Senator Burns. The slaughter has been inside that park.
        Secretary Babbitt. Well, the 2,000 I am talking about----
        Senator Burns. And that figure outside the park does not
    even approach that figure.
        Secretary Babbitt. Well, it does.
        Senator Burns. It does not even approach it. And I am
    wondering what we are going to do inside the park to prevent
    this.
        Secretary Babbitt. Well, Senator, we obviously----
        Senator Burns. We could prevent all of this.
        Secretary Babbitt. We obviously differ. Your position is
    that the animals should not be allowed outside the park. I
    disagree with that. The land outside the park is public land. I
    believe the people of the United States support the notion that
    these animals should be, under the circumstances, allowed on
    public land, owned by the people of the United States. And,
    that we should terminate this policy of slaughtering them when
    they walk across an artificial line, separating Yellowstone
    National Park from the adjoining national forest.
        Senator Burns. Does not the park belong to the people, too?
        Secretary Babbitt. Absolutely.
        Senator Burns. You are not going to take any responsibility
    for that?

                             bison on federal land

        Secretary Babbitt. Senator, those animals would not be
    starving in the park if we had a rational policy which would
    allow them to seek forage in the lower elevations on Federal
    land adjacent to the park. Of course, we should find a better
    balance for this bison herd. But we cannot do that as long as
    you insist that those animals should be left in the high
    altitudes rather than being allowed, in the right
    circumstances, off the boundary of the park, onto adjoining
    public lands, where, in my judgment, they have every right to
    be.
        That would prevent the starvation. But it is not possible
    because the State of Montana is slaughtering those animals as
    they move down into the lower elevations. And we disagree on
    that policy.
        Senator Burns. Is it not the responsibility of the Park
    Service to maintain some sort of range condition for winter
    forage?
        Secretary Babbitt. The plain fact is that these animals
    need more winter range. It is available on public land, except
    for the policies of the State of Montana.
        Senator Burns. I would say that the public lands that you
    are looking at for winter range is probably the same altitude
    as the park.
        Secretary Babbitt. Well, I disagree. That is not correct.
        Senator Burns. Well, you can look at your elevations and
    everything, but in other words, you are absolving the Park
    Service's responsibility to maintain range conditions that
    would sustain the number of bison that it can carry in there;
    is that not correct?
        Secretary Babbitt. Senator, Yellowstone National Park is
    high summer range land. Historically, animals have all migrated
    off that high land, down onto winter range. The elk do that.
    And it seems to me perfectly appropriate. That happens in every
    national park in the United States. Bison should be treated
    exactly the same way.
        Senator Burns. I would say that the forage outside of that
    park is probably primarily on private land. Would you conclude
    that?
        Secretary Babbitt. There are millions of acres of adjacent
    forest land which are appropriate winter range for wildlife
    owned by the people of the United States. That includes bison.
    This notion that they should be kept inside Yellowstone
    National Park, at high altitudes, during bad winters, at gun
    point, I think is a badly mistaken philosophy.
        Senator Burns. We, as private landowners and grazers and
    people in the livestock industry, are committed to keeping our
    animals on our land and maintaining range conditions that would
    sustain the number of animal units that we can properly take
    care of.
        Secretary Babbitt. Senator, I am not talking about private
    land. I am talking about public land, owned by the people of
    the United States of America.
        Senator Burns. What difference whether it is a public herd
    owned by the public or a private manager trying to maintain his
    own area? Should not the same practices--is the same good
    neighbor policy the same?
        Secretary Babbitt. Senator, a private landowner has every
    right to exclude bison from his or her private land. That is
    not what we are talking about. We are talking about a policy
    which says these animals will be slaughtered as they move onto
    lower altitudes onto national forest land. I believe that is
    mistaken, unnecessary, and wrong.

                             bison herd management

        Senator Burns. I would support the idea that the numbers
    cut back can be shipped to any other part of the country, if we
    can clean up this idea of a disease. We have no problem with
    that, Mr. Secretary. No problem at all.
        Secretary Babbitt. Senator I believe the present policy is
    fundamentally wrong.
        Senator Burns. What I am saying is that to be a good
    neighbor, I mean, to abide by some rules and regulations that
    were written naturally many, many years ago, that we could
    accomplish that then. We cannot do it without the cooperation
    of the Park Service.
        Secretary Babbitt. Senator, I cannot be a party to a policy
    which says bison in search of winter range are going to be
    slaughtered when they cross from Yellowstone National Park into
    the adjoining national forest. I do not support that policy.
        Senator Burns. Then what I would suggest is that we manage
    the herd in the park to where we have sustained forage and
    sustained range, and work with the States in order to manage
    the herd and clean up a diseased herd, and take care of those
    things and we will be able to do that.
        Secretary Babbitt. Senator, you are not advocating that for
    elk.
        Senator Burns. But elk have different social habits. You do
    not have near the problem with elk.
        Secretary Babbitt. They have a social habit shared by
    bison, and that is that they are wildlife owned by the people
    of the United States, which ought to be managed on a public
    land base, including the U.S. National Forest System.
        Senator Burns. But the fact is the winter herds of elk, the
    vast majority of them, winter on private property. And they
    graze on private property. Very happily so. We have very few
    problems. And you know the social problems that we are talking
    about. Elk do not have the same cycles as buffalo do, or bison
    do.
        There is a lot of this that maybe the American people do
    not understand, but do not use the inflammatory words of
    Montana slaughtering those animals, when you, the Park Service,
    allowed this abominable management of a herd to starve to death
    when you had it in your power to control the numbers and
    provide the forage and the management. And you have the
    technique. You have it.
        And I understand that maybe we need to do some ongoing
    research. Maybe you can supply me with the amount of research
    that the Park Service is doing. I will be happy to take that--
    but in recommended management problems. Now, that is the fact.
    That is the fact that the Park Service policy starved these
    animals. And you can use all the inflammatory language that you
    like, all of that; we are going to continue to protect not only
    the integrity of that herd, but the integrity of an industry in
    my State, and we will continue to do that.
        But as long as the Park Service embraces this policy, then
    they must shoulder the concerns of that policy and not try to
    push it off and blame somebody else. That is it. And I thank
    you for coming this morning.

                                 new world mine

        I want to ask you some questions about the land and
    conservation with the gold crown situation up there. That was
    not the deal that was made by the people of Montana on private
    property, using money to buy out a mine that we use to help the
    environment of this country, using environmental funds to help
    the environment in this country, and to allow this. Are you
    going to complete the EIS so that it tells us that maybe that
    area should be mined or not mined?
        Secretary Babbitt. Senator, the EIS issue really turns, I
    think, on the acquisition issue.
        Senator Burns. But you are not acquiring the land.
        Secretary Babbitt. Well, we have not acquired the land.
        Senator Burns. What?
        Secretary Babbitt. We have not acquired, that is correct.
        Senator Burns. That is exactly right.
        Secretary Babbitt. That is correct.
        Senator Burns. It is private property. Well, I will have
    some more things in writing, but we can discuss these in calmer
    environs. But I do not like the idea of being blamed for some
    things. It is because of policy set by the Park Service that is
    creating this whole situation.
        So, thank you.

                              bison herd integrity

        Secretary Babbitt. Senator, I appreciate the spirit of your
    questions. I just want, again, to say that, with all respect,
    we have a fundamental disagreement. And I am ready and willing
    to sit down and discuss it at any time.
        Senator Burns. The disagreement is on the policy of how do
    we maintain the integrity of the herd and of the park.
        Secretary Babbitt. That is correct.
        Senator Burns. And to embrace management policies that have
    been a very, very successful policy all across this country
    with the exception of here. And that, I find, very intriguing.
        Senator Gorton. I did not realize, Mr. Secretary, when I
    said I would allow every other member of the subcommittee to
    question first that I would still be waiting somewhat more than
    2 hours later.
        Senator Burns. My apologies to the chairman.
        Senator Gorton. You were a very small part of it, Senator
    Burns.
        Senator Cochran, who was here, wanted me to mention that he
    will submit questions to you on the Natchez Trace and on other
    subjects, and will do so in writing.

                                  alaska roads

        Senator Gorton. And I might say, with respect to the first
    set of questions by the Senator from Alaska, which I and I
    suspect other members of the committee, found somewhat
    frustrating on both sides of the table, Mr. Secretary, I can
    appreciate a policy of an administration that does not want
    roads on every section line for 960,000 miles. I do not regard
    that as an overwhelming threat. I must say, as an outsider, I
    regard it as equally irresponsible to say that no one is going
    to be able to build a road unless 1976 motor vehicles or
    something like it were being used.
        If you do not mind, I would ask you to come up and have a
    private conversation with me on a suggestion that might be able
    to get both sets out of it when the hearing is over. But I
    think you ought to also carry back to the administration the
    proposition that these veto threats, whether they relate to
    roads in Alaska and Utah or continuing resolutions, do not come
    free. There are many in the Senate who are operating right on
    the policy now that we are going to pass one flood supplemental
    bill and only one and that a veto is going to be a veto of the
    whole bill and not of a single element of it. That is obviously
    not a decision that has been taken finally, but there is a very
    real possibility that that will be the case.
        It is something I would regret. You know, we have worked on
    our part of it for the Department of the Interior in a way that
    I think is both responsible and generous. You spoke earlier of
    Yosemite. Obviously it is very important that the Yosemite
    provisions of that flood supplemental become law and not be
    hostage to debates on other issues. But I do have a number of
    questions of my own. I am obviously not going to be able to get
    through all of them, but let us at least start. And I hope that
    while we will have some disagreements, we can go through them
    once each, and I will express my views and you can express
    yours, and then we will go on to another subject.

                      interior columbia river basin study

        And I will start with a contentious and partly parochial
    one, the inner Columbia basin ecosystem study. The Senate
    Energy Committee had a hearing on that subject last Thursday.
    And we were faced, it seems to me, with at least the
    conflicting functions of a number of government agencies. The
    Bureau of Land Management and the Forest Service have missions
    that include, though obviously they are not limited to, a
    commodity production role. The Fish and Wildlife Service has no
    such function at all.
        And it seems to me at least that much of the cost of
    implementing the Columbia basin study, now estimated to be $125
    million more than present costs, is attributable to meeting the
    requirements of the Endangered Species Act as interpreted by
    standards developed by the Fish and Wildlife Service and other
    science agencies. In the hearing I learned that the
    environmental impact statement prepared by the Forest Service
    and the BLM was on its way to be printed when objections from
    the Fish and Wildlife Service, the National Marine Fisheries
    Service, and the Environmental Protection Agency, resulted in
    further delays.
        It seemed to me that rather than consultation, we were
    involved in a dictation on the part of those agencies, with
    certain tremendous impacts, most of them adverse, on local
    economies. My first question is: Why did the Fish and Wildlife
    Service, along with the EPA and the National Marine Fisheries
    Service, cause the delay in the release of the interior
    Columbia basin environmental impact statements?
        Secretary Babbitt. Well, that in fact happened. The reason
    is that the regulatory agencies are worrying about the
    implications of the so-called Pacific Rivers decision, which
    led us to think of these impact statements as something that
    ought to have the ability, from the front end, to address all
    regulatory consultations, which usually take place downstream,
    months or years later. These have been framed in a way that we
    anticipate the issues would all be cleared out of the way once
    the plan was implemented. Then local land managers could
    effectively go about their business without having to reconsult
    with the regulatory agencies on hundreds of projects across the
    years.
        Now, let me also say that when those objections were raised
    by the regulatory agencies, we went back to the process,
    including the local governments, and thrashed it out in a way
    that I think is fairly satisfactory. I mean the changes were
    all flagged and discussed. Many of them were resolved,
    withdrawn, and modified.
        Last, one sentence about the projected cost in the
    outyears, beginning in 1999. A big piece of those costs is the
    forest health issues, which are not, in most cases, being
    driven by the Endangered Species Act. The part that deals with
    stream restoration certainly is being driven by the Fish and
    Wildlife Service and National Marine Fisheries Service. But I
    would wager that much of the larger part of those costs is the
    thinning and prescription treatment and burning of forests.
        Senator Gorton. Are those regulatory agencies going to, in
    effect, have veto power over forest management practices in the
    region?
        Secretary Babbitt. Under the preferred option in the
    statements as option four--and I believe that the theory behind
    option four is that the front-end adoption effectively
    preclears most of the decisions by the land management
    agencies--there are two categories. There is one category of
    areas that requires an additional step of watershed analysis.
    But the lands which have the so-called default standards, I
    believe, by my understanding and reading of the document, is
    that the land management decisions would take place without any
    further consultation.
        Senator Gorton. Under the Northwest plan, the President's
    report stated that the time for consultation was reduced from
    114 to 30 days, obviously a significant efficiency. What needs
    to be done to assure this same level of efficiency in
    implementing the Columbia basin study and other large eco-
    region projects?
        Secretary Babbitt. I think it is a factor of two things.
    One is the level of attention being given to this. The reason
    we reduced the number of days of consultations in my judgment,
    in the forest plan is because Tom Collier sat on these issues
    and simply did not let them escape his attention for even 1 day
    as we went through the process. The remaining question is
    whether that is now a cultural change that we can count on or
    whether we will have to stay with it in that kind of detail.
    Obviously some of it is a function of funding as well.

                           eco-regional plans funding

        Senator Gorton. Back to the $125 million cost. Should we
    expect similar increased costs for other large eco-regional
    plans when the preferred alternatives are selected? Or is this
    one going to be a special case?
        Secretary Babbitt. Senator, I would counsel some caution
    about that figure for these reasons. First of all, it is an
    estimate of the costs, that is out ahead of the EIS process,
    which you know might be incurred. And second, as I said, a
    great deal of that cost is forest restoration costs. The pace
    at which that takes place, I think, is subject to a lot more
    discussion. The bottom line is, when we are talking about the
    inland forests of the West, we have a forest ecosystem health
    problem that is acknowledged by all. And it is going to be
    expensive to fix it.
        The question is on what kind of time line do we move. Not
    to elaborate, but we have got probably 300 million acres of
    inland forest in the West. We are doing prescriptive treatment
    on maybe 2 million or 3 million acres a year right now.
        Senator Gorton. So this plan is not going to be unique.
    There are going to be similar problems with respect to all of
    the other large regional plans out there?
        Secretary Babbitt. This problem is a West-wide problem. It
    is, in most cases, not being driven by the Endangered Species
    Act. Those costs are not being forced by regulatory agencies.
    They are being estimated, at least 50 percent and I would guess
    probably closer to 75 percent, of those costs are being driven
    by the forest managers as necessary management, quite apart
    from regulatory requirements.
        Senator Gorton. To the extent that you are responsible for
    it in BLM, will your 1999 budget request reflect those costs?
        Secretary Babbitt. My 1999 budget?
        Senator Gorton. 1999.
        Secretary Babbitt. Senator, I am not prepared to say
    because I have not seen these figures scrubbed down. In the EIS
    process we are going to need an expansive debate about not the
    stream-specific pieces, which are I think mandated, but about
    the pace of and cost and alternatives of dealing with these
    forest issues.

                                   everglades

        Senator Gorton. Another subject, the Everglades. Tell me
    the overall status of the Everglades restoration effort. We are
    pretty close. It looks to me like $1 billion in a 2-year
    period, when you combine both the State of Florida's
    contribution and our own. How is it going? How are the agencies
    working together?
        Secretary Babbitt. I think we are pretty much on track.
    There are, I think, two or three major pieces that are
    unfolding right now. The restoration work in Taylor Slew, the
    so-called modified water delivery, is critically important,
    because it rewaters the southeastern portion of the Everglades.
    The Corps of Engineers restudy is on track. That is, we have
    made a big commitment there to a final plan by 1999. It is
    moving essentially on track.
        The third really big piece is the storm water treatment
    areas up at the top end, where the runoff from the sugar fields
    is being cycled through these retention areas for natural
    uptake of the phosphorous. The first large-scale treatment
    center is now under construction--at least, if they are not
    turning earth, they will be in the next few weeks. That one
    dropped a tiny bit behind schedule because of some cash flow
    issues in the South Florida Water Management District. But they
    are resolved and ground breaking is under way.
        There are still some remaining issues on the Corps of
    Engineers' 404 water quality permit up there. I think they are
    being worked out. We are going through the process of
    disbursing the money that was in the farm bill last year. I
    think we have a very satisfactory consensus plan, and that
    money will be disbursed probably by the end of the summer.

                               budget priorities

        Senator Gorton. Now, I have got a fairly complicated
    paragraph here on the budget and the way we set our priorities,
    so try to listen to me and stop me if I need to go over it
    again for you. The budget agreement, which looks like it is
    going to be implemented now, provides about a 2-percent
    increase in discretionary, nondefense spending in fiscal year
    1998. That, if we go a pro rata share, would probably be about
    $240 million for this subcommittee. But function 300 natural
    resources, that makes up a large portion of our bill, seems to
    be more generously treated, and we could conceivably get up to
    a 4.5-percent increase, or $560 million. But not everything is
    in that function.
        So let us start with the figure of $500 million more than
    the current appropriations level. The Park Service priorities
    that are in the budget agreement as priority items are $83
    million of that; for tribal priority allocations--Senator
    Domenici talked to you about that--another $77 million;
    Everglades, $79 million. If we stop selling oil from the
    strategic petroleum reserve to finance programs in the Interior
    bill, and I think it would be responsible to take that action,
    that is another $200 million.
        Now, that leaves about $61 million out of that $500 million
    for everything else, including other Interior agencies, the
    Indian Health Service, energy conservation and so on. So most
    of it is eaten up by these priority matters first. Have you
    considered the impact on other agencies that absolute
    protection of these priority programs within a balanced budget
    might have?
        Secretary Babbitt. Senator, I have been a little hesitant
    to look across the chart for fear of retribution from other
    agencies. But I understand the import of your question. I would
    be happy to engage in the kind of dialog that I think we had
    very successfully last year. I recall that you asked me last
    year almost an identical question.
        Senator Gorton. It was tougher last year. We were going
    down, if anything.
        Secretary Babbitt. I have reason to suspect that if we
    engage in detail and do this carefully, we can pick our way
    through it. But I understand the question. What you are saying
    is we are not home free.
        Senator Gorton. That is right.
        Secretary Babbitt. And I accept and understand that.

                            land acquisition funding

        Senator Gorton. Now, on an allied subject, land
    acquisition. The budget agreement provides for the expenditure
    for another $700 million for land acquisition over the course
    of the next 4 years, with $300 million to be available for
    1998. Though it is not stated explicitly in the budget
    agreements, the intent seems to be to provide the $315 million
    in 1998 and $15 million in 1999; for the headwaters forests,
    $250 million; and the New World Mine, $65 million; and to
    provide an additional $385 million for other acquisitions in
    1999, 2000, and 2001. At least that is our reading here.
        Do you agree with that reading?
        Secretary Babbitt. Senator, that is essentially my reading.
    I would not want to be held to the pace of outlays, but as you
    describe the New World Mine, the headwaters, and the remaining
    balance essentially unencumbered beyond that, that is my
    understanding.
        Senator Gorton. Now, that is a pretty dramatic increase.
    Can you efficiently manage that kind of increase, and are there
    enough--other than the two I named, are there enough quality
    acquisitions in the pipeline to justify it?
        Secretary Babbitt. Senator, yes; the backlog of acquisition
    proposals is reflected each and every year in the budget
    process. And the answer is there are plenty of them.
        Senator Gorton. Yes; there are plenty of them and yes you
    could manage them, both?
        Secretary Babbitt. Yes.
        Senator Gorton. OK. Why has the administration decided not
    to finance the headwaters acquisition with oil and gas
    properties as it originally proposed?
        Secretary Babbitt. Well, Senator, in all honesty, it was in
    no small measure due to your letters to the Department
    reflecting some skepticism about that approach.
        Senator Gorton. Well, I ought to quit while I am ahead.
    [Laughter.]

                              park service funding

        On that one at least. The Park Service, which is a favorite
    of mine and I suspect of yours, has been treated more
    generously than most of the rest of your budget last time and
    this time around. What factors, in your view, exist with
    respect to the Park Service that do not exist with respect to
    other agencies funded by this committee, causing it to get the
    lion's share of these increases?
        Secretary Babbitt. Senator, it is real simple, it is called
    5 million people a year at Grand Canyon, 4 million people a
    year at Yosemite, and 3 million people a year at Yellowstone.
    This land management agency is uniquely, as one of my fervent
    supporters over here suggested, an agency which deals with
    people. And that is where the money goes.
        Senator Gorton. And what are your three or four top
    priorities for the Park Service?
        Secretary Babbitt. I believe that the issues in the
    National Park Service are approximately in this order. First,
    managing the increase in visitation and doing it to separate
    cars from people, through innovative and thoughtful
    transportation and management plans. We have a big continuing
    problem of dealing--I will wander only for one sentence--we
    still have border problems of incompatible uses impinging on
    parks. The New World Mine is a good example. The bison issue
    which so excites Senator Burns and myself is in fact a border
    management problem that I believe we can resolve, but there are
    many, many of those.
        We have an upstream water issue in Zion, which I think we
    now have control over. I would say repair and upgrading of
    infrastructure remains a problem. I believe, in all candor,
    that we can gradually whittle that away. I do not think there
    is a dramatic single-shot solution in sight, but we are making
    some progress. We will be back with some more thoughts. We have
    not explored all of the alternatives. But I would say those are
    the three issues.

                                    presidio

        Senator Gorton. Last month I spent something more than half
    a day at the Presidio just before the members of the trust were
    appointed. The Park Service is working on a plan under which
    the trust will end up managing as much as 80 percent of the
    property. You have referred to the trust activities, and I
    believe I am quoting you accurately, ``as managing a city
    within a city.'' I think that gets to the heart of the
    challenge or the problem that we have here.
        It is an absolutely magnificent place obviously, but it is
    hard for me to shake the belief that it is still primarily a
    city asset and a city or a regional park. The GAO has said that
    the expenditures that have been made so far are consistent with
    the management plan. They gave us as good and as favorable a
    report as possible. We are still talking about $25 million for
    the course of the next year.
        So tell me if you can, how soon you expect the Board of
    Directors of the Presidio Trust to be fully operational, making
    the basic management decisions about the future of the site?
    How long should it take the Presidio to generate sufficient
    revenues to finance its own operations? And what kind of
    decline in Federal monetary responsibilities do you see as we
    look forward to, say, the next 5 years or so?
        Secretary Babbitt. A couple of thoughts. The Directors, as
    you know, have been appointed. I am enormously gratified at the
    quality of the selections that were made. I think we have a
    real chance at some superb management. There is one--there are
    actually two issues that that board faces, and I believe that
    the ramp-down and the success of the basic assumptions are
    going to depend on.
        The board is going to have to make a difficult and
    important decision about how many of those buildings should be
    decommissioned and taken down. There is an enormous overhang of
    maintenance and infrastructure there. Unless a realistic
    decision is made about what can be utilized at a rational cost
    with the expectation of self-sufficiency, we are going to have
    a big problem.
        Now, what I am saying in plain words is we cannot treat
    every structure on that magnificent landscape as a candidate
    for historic preservation. It is going to be a difficult and
    sensitive issue, but that is, to me, the key initial decision.
        Once we have a realistic grip on what improvements are
    essential and should be saved, then it becomes a matter of
    streaming them into something resembling a commercial,
    historically protected real estate market. I think those are
    the issues.
        Senator Gorton. You cannot give me any estimate, then, as
    to how long those questions will require not only to make but
    to implement?
        Secretary Babbitt. Well, I think the important front-end
    decision for this board as it gets under way is to get out a
    map, do a careful inventory of these buildings, and make the
    cut on what it is that can be realistically preserved, rehabed,
    and maintained, with the expectation of self-sufficiency, and
    those that cannot.
        Now, how long will that take? I am not a professional real
    estate manager, but I can certainly identify that for you as
    the core question.
        Senator Gorton. It is. There actually have already been
    some successes there. And there are obviously some other
    buildings that can probably be rehabilitated in a relatively
    short period of time and make a profit. I am concerned, and I
    express through you the concern, that the Presidio not end up
    being a cash cow for social problems in San Francisco. The
    willingness of this committee, and I think of the Congress as a
    whole, to provide a very significant level of funding for an
    extended period is, it seems to me, going to depend very
    largely on whether or not we are left with the impression that
    it really is a park, that it is a public facility, open for and
    useful for people, not just in the immediate area, but all
    across the United States.
        That is simply a comment. If you wish to comment on it, you
    may.
        Secretary Babbitt. Senator, rather than wading straight
    into that, I would ask you to take judicial notice of the
    statements of Congresswoman Pelosi and Deputy Secretary
    Garimendi. They have both been there. They are both creatures
    of the bay area, and they have been pretty forthright in their
    responses.
        Senator Gorton. I know they have. And I find that quite
    encouraging.

                                   c&o canal

        Now, tell me what the status is of the restoration of the
    Chesapeake & Ohio Canal National Historic Park.
        Secretary Babbitt. I think it is a wonderful success story.
    It is not entirely done, but most of it is, as you can see if
    you go out for a morning trip along the towpath. The boats are
    back on the canal in Georgetown. The locks have been restored
    sufficiently to rewater the portion of the canal at Great
    Falls, and the boats are back on the canal. The remaining work
    now, I think, is focussed mostly on some of the outlying canal
    structures and the historic buildings, not just here but all
    the way up to Harper's Ferry. The towpath is back in operation.
    That is the most frequent question I get.
        Senator Gorton. How much longer and how much money for full
    restoration?
        Secretary Babbitt. I believe that the vast majority of the
    restoration will be done across this summer season. I do not
    anticipate any more requests for funds.

                              central utah project

        Senator Gorton. Thank you. Now, the rest of my questions I
    will submit in writing as well. I do have the questions that
    are most interesting and absolutely vital to Senator Bennett,
    so I am going to read these questions to you. But the ``I'' of
    the first person will be those of Senator Bennett rather than
    myself.
        I want to discuss with you some serious implications for
    the central Utah project and other upper basin water projects
    being created by a preliminary draft biological opinion for the
    Duchesne River. This preliminary draft issued by the Fish and
    Wildlife Service proposes, in short, to ignore and undermine
    the Upper Colorado River basin recovery implementation plan for
    the razorback sucker.
        As you know, the recovery implementation plan [RIP] was
    developed in March 1988, between the Department of the Interior
    and the States of Utah, Wyoming and Colorado, to quote,
    ``provide the reasonable and prudent alternatives for projects
    undergoing section 7 consultation in the upper basin,'' to meet
    the needs of the Endangered Species Act. To date, some $55
    million of Federal and State moneys have been spent on various
    RIP programs to recover the Colorado River endangered fishes.
        In fact, Mr. Secretary, your fiscal year 1998 budget
    request includes roughly $8 million for the RIP. The Fish and
    Wildlife Service has been involved in a section 7 consultation
    to determine the impact of the Spanish Fork Canyon to the NEPHI
    water pipeline feature of CUP on the razorback sucker habitat
    in the lower 2\1/2\ miles of the Duchesne River. The
    preliminary draft biological opinion, released on March 14,
    1997, abandons the RIP.
        It says, and I quote: ``The Service has determined that, as
    of this date, the recovery program has not made sufficient
    progress toward recovery of the fishes to serve as the
    reasonable and prudent alternatives to avoid jeopardy.''
        Mr. Secretary, I hope this draft statement does not
    represent the current position of the Department concerning the
    efficacy of the RIP. If it does, I am afraid of the reaction
    that you will get from the upper basin States, who have worked
    hard for almost 10 years to recover the fish, under the
    assumption that the recovery program provides an umbrella of
    protection under the Endangered Species Act for the upper basin
    water projects, like CUP.
        Is the RIP, in your view, a viable program, which is making
    sufficient progress to continue to serve as the reasonable and
    prudent alternative for the upper basin water projects?
        Secretary Babbitt. Senator, two thoughts. I do not think
    that we are on a collision course over these consultation
    issues in CUP. But I understand your concerns. What I will do
    is write you a letter, and see if I can outline these issues.
    But, again, I am pretty confident that we can get this worked
    out and that, the technicalities aside, there is not an
    underlying problem here which is going to materially impact the
    CUP construction schedule.
        Senator Gorton. The RIP recovery action plan, RIPRAP, has
    concentrated resources and prioritized funds to accomplish
    recovery of the species principally in the Green and Colorado
    Rivers. The RIP agreement of 1993 specifically says:
    ``Sufficient progress will be evaluated separately for the
    Colorado and Green Rivers subbasins, but not individual
    tributaries within each subbasin.''
        The March preliminary draft opinion, however, is in
    fundamental contradiction with this provision of the RIP
    agreement, and proposes monthly flow recommendations for the
    Duchesne River, a tributary of the Green River. These flow
    recommendations are based, admittedly, upon little or no
    historical biological data. Furthermore, the razorback sucker
    habitat on the lower Duchesne River is controlled, in essence,
    by the elevation of the Green River. Taking water from the CUP
    and other upstream projects will have little or not impact upon
    the depth and velocity of the water in the lower Duchesne
    habitat.
        It appears to us, Mr. Secretary, that the goal of this
    preliminary draft opinion is to take water from CUP and other
    water projects in the name of trying to reestablish fish
    habitat in the lower reach, the small tributary of the Green
    River. This approach is inconsistent with the RIP and should be
    withdrawn in favor of an approach which is in harmony with the
    RIP program. The RIP must continue to serve as the reasonable
    and prudent alternative for the upper basin projects, like CUP
    or the upper basin States will abandon the RIP process.
        Will you personally acquaint yourself with respect to this
    preliminary draft biological opinion for the Duchesne River to
    ensure that the RIP continues to function as a viable program
    to recover the endangered fish in the upper basin, which can be
    supported by the State of Utah?
        Secretary Babbitt. Senator, I would be happy to do that. I
    will look into this. Because I genuinely do not think that
    there is any threat or intent or even any possibility that the
    water supply of CUP would be impacted. But I understand your
    concerns. And I will get onto this and get back to you.
        [The information follows:]

                         Additional committee questions

        Senator Gorton. There will be some additional questions
    which will be submitted for your response in the record.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing.]
                         Additional Committee Questions
                               interagency issues
    Headwaters and new world mine
        The Department has been engaged in complex negotiations with
    Maxxam, Inc. to determine assets that can be exchanged for a portion of
    the Headwaters Forest. The cost of this deal is upwards of $250
    million.
        Question. What is the current status of the negotiations?
        Answer. The negotiations referenced above regarding ``assets that
    can be exchanged'' ceased with the adoption of the Bipartisan Balanced
    Budget Agreement (BBA), which calls for $700 million in additional
    funding for Federal land acquisitions and exchanges. Up to $315 million
    of that amount would be available to finalize priority Federal exchange
    proposals. Negotiators understood that those exchanges included up to
    $250 million for the Headwaters Forest exchange in California and up to
    $65 million for the New World Mine exchange outside Yellowstone
    National Park in Montana.
        This Administration is involved in acquiring, exchanging, or
    withdrawing non-Federal lands in several major deals, including the
    Headwaters Forest, the Grand Staircase-Escalante National Monument, and
    the New World Mine. As mentioned, one of the land deals the
    Administration is working on is the proposed Headwaters Forest exchange
    in California. The particulars of the proposed deal have been somewhat
    fluid in the eight months since an agreement was signed between the
    United States, the State of California, and Maxxam, Inc., the owner of
    the private forest lands the Department wants to protect.
        In early April, this Committee received a letter from Bonnie Cohen,
    the Assistant Secretary--Policy, Management and Budget. The letter
    proposed reprogramming $1.2 million from the Bureau of Land Management
    (BLM) budget for work on the proposed land exchange. The letter
    identified the following tasks that would be initiated with the
    requested funds: (1) appraisal of the privately-held forest properties
    that the Federal Government wishes to acquire; (2) appraisal of 24 oil
    and gas leases on public lands in California identified as Federal
    assets for the deal; (3) establishment of an auction process for the
    leases; and (4) amendment of the BLM Resources and Management Plan to
    change the oil and gas mineral estate from retention status to disposal
    status.
        Together Senator Byrd and I decided not to raise an objection to
    the reprogramming request. We both appreciate the value of protecting
    old growth timber lands where a deal can be made. However, my approval
    of the request was not without some concerns, as you know from the
    letter I sent to you on April 24th. And I know that Chairman Murkowski
    of the Energy and Natural Resources Committee, another Committee of
    which I am a member, wrote to you of his concerns. I believe, also,
    that the House Appropriations Committee also has written to you about
    their concerns.
        Question. Will these tasks be completed with the funds requested?
    If not, how much more will be necessary from the Federal Government to
    complete the appraisals and other preliminary work?
        Answer. Plans for exchanging subsurface estate and other assets for
    the Headwaters Forest have been rendered moot under the land exchange
    negotiations associated with the Balanced Budget Agreement. While the
    Department appreciates the reprogramming latitude provided by the House
    and Senate Subcommittees, we cannot now foresee the need to conduct any
    further activities identified in the April 1997 reprogramming letter.
        The majority of the assets identified for exchange are active oil
    and gas properties in California. I understand the Administration will
    exchange these properties under the authority of the Federal Lands
    Policy and Management Act (FlPMA), and that the properties will then be
    auctioned and the proceeds will be used to compensate Maxxam.
        Question. Is this essentially correct?
        Answer. Again, plans for exchanging subsurface estate and other
    assets for the Headwaters Forest have been rendered moot under the land
    exchange negotiations associated with the BBA. As a priority land
    exchange, the Headwaters Forest will be acquired from Maxxam for up to
    $250 million appropriated from the Land and Water Conservation Fund.
        The sale of these oil and gas properties will reduce Federal
    receipts by about $100 million.
        Question. Does the Administration's budget reflect a reduction in
    mineral receipts in fiscal year 1998 and beyond as a result of the
    Headwaters deal? If not, why not?
        Answer. The budget reflects no reduction in mineral receipts as a
    result of the Headwaters land exchange. The fiscal year 1998 budget was
    prepared before the terms of the exchange had been finalized. The final
    exchange, as described above, will not reduce mineral receipts since,
    pursuant to the BBA, funding will be provided from the Land and Water
    Conservation Fund.
        The Administration is pursuing similar negotiations to acquire the
    New World Mine site near Yellowstone National Park. In this instance,
    the Administration is proposing to exchange the revenue stream from
    active oil and gas leases for the property to be acquired. This will
    require legislation, and as such will trigger the PAYGO provisions of
    the Budget Act. The Administration's proposed offset for this
    exchange--an adjustment in the Conservation Reserve Program--has met
    with fierce opposition.
        Question. Why is the Administration using the oil and gas revenue
    stream in this instance--which requires legislative action--and the oil
    and gas estate in the Headwaters acquisition--which can apparently be
    done administratively?
        Answer. Under terms of the BBA, neither the revenue stream nor the
    oil and gas estate will be exchanged by the Federal Government for the
    New World Mine or Headwaters properties.
        Question. Though the magnitude of the two deals are different, is
    there any appreciable difference between the two deals in terms of the
    effect on mineral receipts to the U.S. Treasury?
        Answer. As mentioned above, under the terms of the BBA, neither the
    revenue stream nor the oil and gas estate will be exchanged by the
    Federal Government for the New World Mine or Headwaters properties.
        This Committee has been informed that the Administration is relying
    on authority granted it by FlPMA to execute the Headwaters exchange.
    The oil and gas properties being used in the exchange are being treated
    as public lands under FlPMA.
        Question. Is the use of producing oil and gas properties for
    exchanges a well established practice under FlPMA?
        Answer. The use of properties for exchange that have been valued
    under a competitive auction process that establishes a fair market
    value return to the Government is a well established procedure under
    FlPMA, the General Exchange Act of 1922, and the Weeks Act.
        Question. Are you aware of any previous exchanges of this nature?
    Of the magnitude of the Headwaters exchange? Can you provide some
    examples for the record?
        Answer. The Department can document numerous exchanges that
    required asset value appraisal to determine fair market return; none
    equal the funding magnitude of the Headwaters exchange.
        Question. If this has not been common practice, has the
    Administration produced a legal opinion supporting the use of FlPMA in
    this manner? If so, please submit for the record.
        Answer. Because the use of FlPMA for the Headwaters Exchange has
    not been under active consideration for several months, a legal opinion
    on the subject was never signed.
        Materials provided by the Department indicate that nearly $1
    billion in annual revenues accrue to the Treasury from Federal onshore
    oil and gas leases.
        Question. Does this Administration plan on using these receipts as
    a sort of piggy bank from which to draw when it feels a particular
    property is worth acquiring?
        Answer. The Administration never proposed using oil and gas
    receipts to acquire the property. Rather, initially it proposed
    exchanging the sub-surface estate at the oil and gas sites for
    Headwaters--a land for land exchange. The question implies that the
    Administration planned to draw money from some receipt-based account
    (i.e., piggy bank) for the acquisition; that was not the case at all.
        Question. In theory, couldn't all of these receipts be used for
    acquisitions like Headwaters without there being any effect on Federal
    revenues, and therefore any impact on the budget deficit? Does this
    seem proper to you?
        Answer. As stated earlier, no receipts were being used to acquire
    Headwaters. Prior to the BBA, the acquisition was being established as
    a land exchange.
        Question. Would you support changes to FPLMA that would limit what
    is in effect the administrative use of a concrete, estimable revenue
    stream in a manner that requires no budgetary offset?
        Answer. The Administration would not support such changes to FlPMA.
    The exchange contemplated for the Headwaters Forest (and now made moot
    by use of LWCF funds under the BBA) was only possible because PAYGO
    neutrality was maintained.
        I understand that as part of the Headwaters deal, the
    Administration has promised to ``make whole'' the State of California
    for the share of revenues it will lose from the Federal oil and gas
    properties to be traded. This could amount to $100 million.
        Question. Does the Administration have any idea how it will fulfill
    this promise? Do you have any expectation that the Administration will
    call upon the Appropriations Committee for this purpose?
        Answer. Use of up to $250 million in funds appropriated from the
    Land and Water Conservation Fund will satisfy the Federal Government's
    commitment in the Headwaters land exchange; therefore, there will be no
    need to compensate the State of California since it will not lose
    revenues.
                              uncontrollable costs
        It appears that the fiscal year 1998 budgets for different bureaus
    within the Department are treated differently with respect to
    uncontrollable costs.
        Question. Do the requests for some bureaus include funding for
    uncontrollable costs while others do not? How does the Department make
    these determinations? Please provide for the record a table that shows
    how much of each bureaus' uncontrollable costs are to be funded through
    increases and how much are to be absorbed.
        Answer. In an optimum budget with unlimited resources, each of the
    bureaus would be requesting increases for uncontrollable costs. While
    the Department began the formulation process for fiscal year 1998 with
    that goal in mind, the realities of balancing the budget forced
    difficult choices about the priorities for program increases and
    overall funding levels for individual bureaus. As a result, while most
    bureaus were able to cover uncontrollable costs with funding increase
    requests, a few (e.g., U.S. Geological Survey, Departmental Management,
    and Solicitor) were not. The Department's instruction to all bureaus
    was that ``uncontrollable cost changes will be shown and described'' in
    the Justifications.

                                                  UNCONTROLLABLE COSTS
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                      Uncontrollables
                                                                     -----------------------------------------------
                                                                        Absorbed or
                                 Bureau                                  offset by       Funded in
                                                                         projected        request          Total
                                                                          savings
    ----------------------------------------------------------------------------------------------------------------
    Land Management.................................................  ..............          14,500          14,500
    Minerals Management.............................................           2,574             967           3,541
    Surface Mining..................................................             229           1,169           1,398
    Geological Survey...............................................          16,048  ..............          16,048
    Fish and Wildlife...............................................           1,191          10,623          11,814
    Park Service....................................................  ..............          22,617          22,617
    Indian Affairs..................................................             417          18,805          19,222
    Departmental Management.........................................           1,296  ..............           1,296
    Insular affairs.................................................  ..............              87              87
    Solicitor.......................................................             894  ..............             894
    Inspector General...............................................             582              61             643
    Special Trustee.................................................  ..............             499             499
                                                                     -----------------------------------------------
          Total Department..........................................          23,231          69,328          92,559
    ----------------------------------------------------------------------------------------------------------------

        Question. Also, please provide for the record a table summarizing
    the degree to which bureaus' uncontrollable cost increases have been
    funded or absorbed in fiscal years 1995, 1996, 1997, and 1998.
        Answer. The Department does not maintain records showing
    uncontrollable cost history. The following table has been assembled
    based on bureau records, the Justification documents, and other
    analyses on file in the Department's Office of Budget. Note that unlike
    the previous table, the following one is adjusted to reflect the 1.51
    percent increase in CSRS retirement charges, which is now assumed by
    the balanced budget agreement.
        The first line under each bureau shows its estimate of the total
    amount required to offset that year's changes in uncontrollable costs
    such as pay, retirement costs, rent, unemployment and workers
    compensation payments. A negative amount in this line indicates base
    funding for uncontrollable costs went down.
        The second line shows the amount of uncontrollable cost changes
    absorbed. By ``absorbed'' we mean that the funds needed to offset the
    increased costs were: (1) not requested; (2) requested, but paid for
    out of proposed programmatic reductions or projected efficiency gains
    in the base program; or (3) requested but not appropriated. For each
    bureau, if the amount shown on the second line equals the requirement
    (the amount shown on the first line), then the full amount of
    uncontrollable costs are absorbed. If it is less, then the
    uncontrollable costs were partially absorbed for that year. In a few
    cases, the amount in the second line is greater than the amount
    required to pay for that year's uncontrollable costs changes,
    indicating that not only were all new uncontrollable costs absorbed,
    but the base for paying for uncontrollable costs was also reduced.

                        FUNDS REQUIRED TO OFfSET UNCONTROLLABLE COST CHANGES AND AMOUNTS ABSORBED
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                         Bureau                            1995            1996            1997            1998
    ----------------------------------------------------------------------------------------------------------------
    Land Management:
        Total requirement...........................           1,124          10,861           5,330          18,049
        Amount absorbed.............................           1,124             978             569           3,549
    Minerals Management:
        Total requirement...........................           1,822           3,385           3,000           4,456
        Amount absorbed.............................             869           3,385           3,000           3,489
    Surface Mining:
        Total requirement...........................             526           1,900           1,807           1,804
        Amount absorbed.............................             120           1,900             808             635
    Geological Survey:
        Total requirement...........................          12,513          11,722          11,292          20,420
        Amount absorbed.............................           5,470          11,515          11,292          20,420
    Fish and Wildlife:
        Total requirement...........................          14,706          14,410          12,300          13,907
        Amount absorbed.............................          15,587          16,180          12,400           3,284
    Park Service:
        Total requirement...........................          -6,866          34,782          18,711          26,822
        Amount absorbed.............................           8,111          16,798          16,164           4,205
    Indian Affairs:
        Total requirement...........................          18,322          28,503          22,852          21,998
        Amount absorbed.............................          18,322          28,503          22,852           3,193
    Departmental Management:
        Total requirement...........................             805           1,377           2,078           1,753
        Amount absorbed.............................             767           1,405           2,078           1,753
    Insular Affairs:
        Total requirement...........................             157              98              72              87
        Amount absorbed.............................              75  ..............  ..............  ..............
    Solicitor:
        Total requirement...........................            -688             753             791           1,068
        Amount absorbed.............................  ..............             753             191           1,068
    Inspector General:
        Total requirement...........................             599           1,153             500             774
        Amount absorbed.............................             599           1,153  ..............             713
    Special Trustee:
        Total requirement...........................  ..............  ..............             343             499
        Amount absorbed.............................  ..............  ..............             212  ..............
                                                     ---------------------------------------------------------------
    Department total:
        Total requirement...........................          43,020         108,944          79,076         111,637
        Amount absorbed.............................          51,044          82,570          69,566          42,309
    ----------------------------------------------------------------------------------------------------------------
    Note: Fiscal year 1998 based on the President's Budget request and adjusted for increase in CSRS employer
      charges. Fiscal year 1995 through fiscal year 1997 are based on the combination of decisions in the
      President's Budget request and the subsequent appropriations action.

                             ecoregion assessments
        The Department has been working with the Forest Service on a number
    of broad, ``Ecoregion Assessments,'' one of which covers the Columbia
    Basin region. I was recently briefed on the draft Environmental Impact
    Statement (EIS) for the Columbia Basin assessment, which has been
    several years and some $30 million in the making. I understand that the
    measures outlined in the EIS will cost $125 million more than current
    budgets.
        Question. What benefits will the American people receive from the
    $30 million invested in the Columbia Basin EIS? For other ecoregion
    assessments in the works?
        Answer. For the first time ever, the American people have a
    comprehensive look at the people and places within the Interior
    Columbia Basin, and ways to deal with the challenges the people of the
    region face. For local land managers, this effort will provide them a
    scientifically sound framework to make local decisions that will
    improve the health of public lands both locally and regionally.
        Consolidating efforts reduces duplication of efforts and provides a
    catalyst for comprehensive, more defensible assessments, EISs, and
    decisions by land managers. As a result, a better product is attained
    for a reduced cost than what could occur using an administrative unit
    by unit approach.
        Thus far the effort has produced:
      --A wealth of information found in the scientific assessment that
            characterizes social, economic and ecological conditions,
            trends, risks, and opportunities throughout the Interior
            Columbia River Basin, an area over 145 million acres.
      --Over 170 data layers and 20 data bases available to land managers
            and the public; they will assist in future planning and
            implementation.
      --Strengthened relationships between States, tribal, and county
            governments.
        Finally, this effort should reduce the vulnerability to legal
    challenges. If the 45 administrative units within the Basin were to
    address, independent of each other, broad scale issues such as forest
    and rangeland health, salmon survival, Federal Government treaty
    responsibilities to Tribes, or impacts to local economies, inevitable
    inconsistencies would occur creating legal vulnerability.
        People within the Columbia Basin who live and work on or near those
    lands covered by the EIS are concerned that the ecoregion planning
    process will result in a ``one size fits all'' approach to land
    management that will not reflect the particular needs of individual
    watersheds, forests, etc.
        Question. How do you respond to this concern?
        Answer. We have developed a consistent but not a one size fits all
    approach. The scientific assessment has shown us that a one size fits
    all approach will not lead to the restoration of public lands because
    of the variability across the Basin. However, consistent approaches on
    how we analyze problems and implement strategies to remedy these
    problems will.
        The Draft EISs have a combination of process standards as well as
    prescriptive standards. Process standards provide the ``how to'' in
    going from the broad scale to an on-the-ground project. Prescriptive
    standards describe what should be done factoring in variations in
    vegetation and the lay of the land. Adjustments to prescriptive
    standards can and should be made when they are not meeting objectives
    due to local conditions. The mechanism to adjust standards to meet
    local conditions is part of the overall strategy.
        Question. If the ecoregion planning process is truly flexible
    enough to accommodate local management requirements, what additional
    benefit do the assessments provide above that which would accrue from a
    more local planning process?
        Answer. The scientific assessment provides local managers a wealth
    of information that is consistent across the basin but can be used in
    local planning processes. It would have been more difficult and
    expensive to collect and analyze this information on an administrative
    unit by unit basis. This information is important to local managers in
    developing cumulative effect analyses, important in their planning and
    decision processes.
        The Draft EISs focuses on issues that are more efficiently and
    effectively addressed using a broad scale approach. They do not attempt
    to resolve issues that are more effectively addressed at the local
    level. The draft EISs provide the context for local managers to make
    decisions with a better understanding of the larger issues.
                       national petroleum reserve--alaska
        The Department of the Interior recently announced that it is
    beginning to develop an ``integrated activity plan'' and EIS for about
    4.6 million acres in the northeast corner of the National Petroleum
    Reserve-Alaska (NPR-A).
        Question. Please tell the Committee what types of issues and
    matters will be studied in the ``integrated activity plan.''
        Answer. The Integrated Activity Plan (IAP)/EIS will address the
    full range of BLM management responsibilities in the planning area.
    Besides oil and gas development, BLM will look to update its management
    strategies for fish and wildlife, recreation, realty, hazardous
    materials, soil, water, air, and the protection of cultural and
    subsistence resources. The NPR-A is closed by law to mineral
    development other than oil and gas, so management of those resources
    will not be discussed.
        Question. How long will this process take?
        Answer. We plan to issue a Record of Decision for the IAP/EIS by
    August 1998.
        Question. How much is it expected to cost?
        Answer. Total cost of the project is projected to be $8 million.
    This cost will be shared by BLM ($4.6 million) and the Minerals
    Management Service (MMS) ($3.4 million). The project is divided into
    two parts. The IAP/EIS portion of the project will cost $4.4 million.
    The oil and gas evaluation and preparation for a potential lease sale
    will cost $3.6 million. These costs include both labor and operational
    costs.
        Question. From which agency budgets will the funds for this plan
    come?
        Answer. Both MMS and BLM will fund components of this plan. Each
    agency will absorb personnel costs. All operational expenses, including
    travel, printing, and purchase of industry seismic data, will be borne
    by BLM.
        Question. Does the budget request for fiscal year 1998 contain
    amounts for the work needed?
        Answer. The costs for fiscal year 1998 will be funded from within
    the amount requested in the President's fiscal year 1998 Budget.
        Committee staff have heard that, in order to do the work on the
    NPR-A, personnel from MMS would be brought over to help and that,
    potentially, some Outer Continental Shelf (OCS) lease sales in Alaska
    could be delayed. The delay of OCS lease sales costs the Federal
    Government and the State of Alaska--in the loss or delay of royalties.
    The NPR-A will be a long time in coming to fruition, so it is not an
    equal trade-off.
        Question. Can you tell us more about exactly how the Department
    intends to do the NPR-A work?
        Answer. The BLM has entered into a Cooperative Agreement with MMS
    to do part of the work for this IAP/EIS. Although BLM personnel are
    involved with all aspect of the IAP/EIS, MMS has primary responsibility
    for describing the affected environment, including the oil and gas
    resources, and for describing the environmental consequences. Their
    personnel have also been central to providing a reasonable, foreseeable
    development scenario for oil and gas development.
        Question. Are OCS lease sales in Alaska being delayed? Is the State
    of Alaska comfortable with the delay?
        Answer. Only Sale 173, Cook Inlet, will be delayed. This sale,
    originally scheduled for 1999, will be delayed until 2001 so that MMS
    efforts can be devoted to the resource and environmental evaluation of
    NPR-A. The State of Alaska is anxious for the NPR-A effort to proceed
    and has not voiced any objections about the delay of Sale 173.
        Much of the reason there was little interest in previous NPR-A
    lease sales was due to the fact that industry was not comfortable with
    the lease terms available under regulations promulgated by BLM,
    including those addressing unitization or suspension of leases. Lease
    suspension and unitization are permitted on other Federal lands under
    the Mineral Leasing Act. However, the Department's Solicitor concluded
    in a 1981 opinion that the NPR-A leasing authority, because it was
    contained in the Interior Appropriations Act for fiscal year 1981,
    constituted new and independent leasing authority, and that the terms
    of the Mineral Leasing Act do not apply.
        Question. What is the Department doing to ensure that if a lease
    sale is recommended at the end of the IAP/EIS process the lease terms
    and conditions are such that industry will be interested in leasing in
    NPR-A?
        Answer. In 1982 and 1983, BLM held three oil and gas lease sales in
    NPR-A. The sales totaled approximately 1,350,000 acres and yielded the
    Government $106.5 million in bids and rentals. In 1984, a fourth lease
    sale obtained no bids. Contributing to the lack of bids in that sale
    was the inherently poorer quality of the lease tracts offered for sale,
    heightened interest in oil and gas exploration in the Arctic National
    Wildlife Refuge (ANWR), and industry concerns about lease terms. Since
    the last lease sale, the Department has reexamined the applicable law.
    The Department believes it has the authority to issue new regulations
    to address unitization and clarify suspension, if necessary. We
    anticipate having necessary regulations in place prior to any leasing
    which may result from the IAP/EIS effort. By law, lease blocks can be
    up to 60,000 acres. We anticipate that the concerns regarding
    consolidation and the size of lease blocks will be addressed within the
    context of unitization regulations.
        At the request of Senator Stevens last year, we were going to try
    to add an amendment to the fiscal year 1997 Interior bill to make
    certain terms of the Mineral Leasing Act applicable to the NPR-A. I
    understand that the Department supported this amendment, which provides
    for environmentally-responsible unitization of leases by the oil
    companies so that fewer wells have to be drilled.
        Question. Is it still the Department's opinion that legislation is
    needed to allow unitization?
        Answer. No. The Department plans to issue regulations addressing
    unitization.
        Question. Will the Department support the addition of language in
    the fiscal year 1998 bill, if it is requested by members, that it
    supported last year to allow unitization in the NPR-A?
        Answer. Legislation is unnecessary since the Department has the
    administrative authority to address unitization in regulations.
        The Naval Petroleum Reserves Production Act of 1976 directed that
    several reports be prepared on the NPR-A, including one regarding the
    ``development, production, transportation, and distribution of
    petroleum resources'' and another on the ``value, best use, and
    appropriate designation of the lands'' within the reserve.
        Later, in the Department of the Interior Appropriations Act for
    fiscal year 1981, Congress appropriated $107 million for, among other
    things, an EIS on competitive oil and gas leasing in the reserve.
        Question. Can you tell the Committee what the IAP and EIS will
    accomplish that the previous studies, reports, and EIS did not?
        Answer. As the Committee notes, there have been a number of studies
    of NPR-A. The current planning effort will make use of the data derived
    as part of these studies, as well as the results of more recent
    investigations. The IAP/EIS, however, will address issues and utilize
    knowledge and information which was not pertinent or available in the
    1970s and early 1980s. Furthermore, there have been regulatory changes
    which make the 1983 EIS (which was done pursuant to the fiscal year
    1981 Interior Appropriations Act) outdated. Since that EIS was drafted,
    the Federal Government has assumed a greater responsibility for
    management of subsistence resources, has promulgated a wetlands policy
    which affects development in the planning area, and has both de-listed
    the peregrine falcon and added the spectacled eider and Steller's eider
    to the list of threatened and endangered species. The new IAP/EIS will
    address management within the context of these new rules.
        Oil development technology has evolved as well. The IAP/EIS will
    analyze impacts from development, taking into account new oil industry
    technology which in some instances may lessen those environmental
    consequences. At the same time, development on the North Slope has
    matured, and as a consequence we can produce an updated and more
    accurate picture of cumulative impacts of any further oil and gas
    development.
        There has been considerable additional resource information about
    the North Slope gathered by the Federal Government, the State of
    Alaska, the Borough, and others. The IAP/EIS will take advantage of
    this better understanding of Arctic resources to reexamine our nearly
    15 year old oil and gas leasing program and to put in place updated
    management for all the resources in the planning area.
        We also need to update the 1983 EIS because it has some technical
    flaws (e.g., it lacks a ``no action alternative''). These flaws, in
    addition to its dated nature because of changes in regulations and the
    on-the-ground situation, make it unlikely any leasing program based on
    the old EIS could successfully withstand a court challenge.
        Question. Will different issues be addressed? If so, what are they?
    Will you provide the Committee a detailed description of the work to be
    performed, issues to be analyzed, and matters to be examined as part of
    the IAP/EIS process?
        Answer. The IAP/EIS will follow the standard EIS process, including
    holding public meetings and soliciting written responses to help define
    issues and obtain comments on the draft plan, preparing descriptions of
    the potentially affected environment and the consequences of following
    a range of alternative future management strategies, responding to the
    public's concerns, and publishing a final decision.
        The public outreach program includes repeated visits to the North
    Slope villages nearest the planning area, news releases, a series of
    newsletters, an internet web site, participation on radio call-in
    shows, and meetings with environmental, industry, Native, and State
    representatives. A symposium of leading scientists from agencies of the
    Federal, State, North Slope Borough Governments, universities, private
    groups, and firms has been held to assure that authors of the IAP/EIS
    will have the most up-to-date information about development and
    resources on the North Slope.
        The North Slope Borough, State, and the Fish and Wildlife Service
    (FWS) are represented on a coordinating group to share their concerns
    with top BLM Alaska managers on the NPR-A effort. The BLM Alaska office
    has established cooperative agreements with the State and the North
    Slope Borough and has funded positions to work directly with the
    planning team. The State's NPR-A staff person has an office with BLM
    NPR-A staff members at the BLM State Office in Anchorage.
        The public has helped identify issues to be addressed in the IAP/
    EIS. In addition to input concerning possible oil and gas development,
    wildlife values associated with the region around Teshekpuk Lake and
    recreation and wildlife values of the Colville River valley are of
    special concern. While North Slope residents have stated their interest
    in participating in any economic development in the area, they
    repeatedly expressed the importance of the availability and
    accessibility of subsistence resources, such as caribou, waterfowl, fur
    bearers, and marine mammals. Others are interested in protecting
    cultural and paleontological resources and adding unique areas, such as
    the Pik sand dunes, to the Special Areas.
                              superfund liability
        The Federal Government is liable just like any other landlord under
    Superfund as an owner of property where a release of hazardous
    substances occurred.
        Question. To what extent does Interior intend to have the Federal
    Government pay its fair share at these cleanup sites? How much will
    that be?
        Answer. The Department, as a land owner under the Comprehensive
    Environmental Response, Compensation and Liability Act (CERCLA) may be
    liable as a Potentially Responsible Party (PRP) for a portion of the
    cleanup costs on our property. This portion may not be recovered from
    other PRPs. Depending upon the viability of other PRPs, the
    Department's share may fluctuate above its fair share. Under this
    circumstance, the Department will always need some level of annual
    appropriation. This level will vary on an annual basis dependent upon
    agreements with regulators and with other PRPs and the work scheduled
    to be performed in that year. Because the Department as a Federal
    agency is not eligible for money from Superfund, demand for response
    and remedy always exceeds funds available by many times. Federal costs
    avoided or recovered on one Interior site often will have to pay for
    defunct or unidentified PRPs on another site.
        The Central Hazardous Material Fund is budgeted at $14 million for
    fiscal year 1998. This is roughly the amount spent on average for
    cleanup at a single site. It does not appear to be an adequate amount
    given the significant joint and severe liability facing the Federal
    Government at unpatented abandoned mine sites.
        Question. How does the Department plan to fund its liability at
    these sites?
        Answer. Abandoned Mine Lands (AML) on the public lands may contain
    both physical safety and environmental hazards. Existing data indicates
    that there are approximately 70,000 AML sites on public lands. The BLM
    field work has shown that about four percent of AML features are
    potential environmental hazards, ranging from lack of vegetation to
    water quality degradation. An AML site will become eligible for Central
    Hazardous Materials Fund (CHF) funding only after the applicable
    Interior bureau or the Environmental Protection Agency (EPA), whichever
    agency has the lead at such a site, has determined that a remedial
    investigation under CERCLA is called for. Examples of mining-related
    projects currently budgeted for in the CHF include Atlas Asbestos and
    Tar Creek. Other mining-related sites have been nominated for CHF
    funding but have not been considered for such funding due to a
    Congressional prohibition contained in the fiscal year 1997 budget
    prohibiting CHF funding of new sites.
        Question. To what extent is the Department relying on cost
    recovery, use of 106 order authority, and abandoned mine fund moneys to
    satisfy response and natural resource damage costs under Superfund on
    public lands under Interior jurisdiction?
        Answer. Within the context of CERCLA and its application and case
    law and the revolving fund intent of the Department's CHF, Interior
    pursues a policy of making polluters pay for the cost of their actions,
    wherever possible. It is the Department's policy to pursue cost
    recovery, cost contribution, or cost avoidance strategies with respect
    to other PRPs associated with the contamination of Departmental lands.
    Cost contribution involves the identification of specific liability for
    each PRP with a concomitant cost share. Cost contribution may be a more
    demanding and costly approach to addressing site liability because it
    requires the development and negotiation of an allocation among the
    parties, including Interior, early in the cleanup process, rather than
    simply suing the other PRPs after funds have been expended and
    requiring that they divide the liability among themselves vis-a-vis the
    Department. The Department of Justice has advised Interior that the
    cost contribution approach, rather than the cost recovery approach, may
    be required at a number of the Department's CHF projects. The other
    strategy utilized by the Department to control costs is cost avoidance
    by having PRPs actually fund and conduct cleanups with participation
    or/and oversight by the Department.
        Interior will cautiously use delegated 106 authority under CERCLA,
    and only where warranted, to accomplish the cleanup of contaminated
    sites by bringing PRPs to the table to contribute to the cost of
    cleanup. Interior, along with other Federal agencies, has been working
    with Justice and EPA to develop a Memorandum of Understanding (MOU)
    which will provide guidance for Federal agencies' use of delegated
    CERCLA 106 order authority. The principles which have governed EPA's
    previous implementation of 106 authority are incorporated into the MOU.
    The MOU would provide for use of 106 authority subject to concurrence
    by EPA and Justice. The MOU has not yet been finalized.
        For AML sites, Interior has an AML watershed initiative in which
    the Department is cooperating with Federal, State, and private partners
    to identify all sources of funds to clean up abandoned mine sites on
    public lands.
        Question. Does the Department plan to have all Superfund liability
    at Interior sites covered by the private sector?
        Answer. Within the context of CERCLA and its application and case
    law and the revolving fund intent of Interior's CHF, the Department
    pursues a policy of making polluters pay for the cost of their actions,
    wherever possible. It is the policy of the Department to pursue cost
    recovery, cost contribution, or cost avoidance actions against other
    PRPs associated with the contamination of Departmental lands. Cost
    contribution involves the identification of specific liability for each
    PRP with a concomitant cost share. As noted in our response to the
    previous question, cost contribution may be a more demanding and costly
    approach to addressing sites compared to cost recovery because it
    requires the development and negotiation of an allocation among the
    parties, including Interior, rather than simply suing the other PRPs
    after funds have been expended and requiring that they divide the
    liability among themselves. The Department of Justice has advised the
    Department that the cost contribution approach, rather than cost
    recovery, may be required at a number of the Department's CHF projects.
    The other strategy utilized by the Department to control costs is cost
    avoidance by having PRPs actually fund and conduct cleanups with
    participation or/and oversight by the Department.
        Interior, as a land owner under CERCLA may have some potential
    liability as a PRP for a portion of the cleanup costs on our property.
    There also are situations where illegal dumpers cannot be found or
    where past contaminators are no longer financially viable or perhaps no
    longer in existence.
        Where imminent hazard or substantial risk are present, the
    Department takes appropriate action, and then tries to find the parties
    that caused the pollution. Where more time is available, the Department
    will often find the responsible parties and get them to take action or
    to fund or contribute to the cleanup. Because the Department as a
    Federal agency is not eligible for money from Superfund, demand for
    response and remedy always exceeds funds available by many times.
    Federal costs avoided or recovered on one site often will have to pay
    for defunct or unidentified PRPs on another site.
        Under Federal law, Interior must provide a Consolidated Statement
    of Financial Position by March 7, 1997 that sets out the Department's
    financial position in a manner consistent with applicable accounting
    and financial reporting principles, standards, and requirements.
        Question. Will Interior be including potential Federal liability
    under Superfund for both response and natural resource damage costs in
    its Audited Financial Statement? If not, why not?
        Answer. The standards covering the recognition and disclosure of
    environmental liabilities are effective for fiscal year 1997 financial
    reporting (due March 1998). The Department will comply with these
    standards. The Department's Financial Report for fiscal year 1996
    includes disclosure of available environmental liability information,
    including Superfund sites. However this information is more limited
    that what will be presented in 1997 as procedures were not in place
    during 1996 to fully gather this data. The Department is currently
    addressing the data collection process to accurately and fully report
    this information in accordance with Federal accounting guidelines when
    the standards become effective in 1997.
        Question. Since the Federal Government Superfund liability at many
    of these sites may be significant by virtue of having owned the lands
    on which the hazardous substances were released, to what extent is
    Interior's liability for Natural Resource Damages being accounted for
    in the Consolidated Financial Statement required by public law?
        Answer. Environmental liabilities, including Superfund Liabilities,
    are to be recognized in the financial statements beginning in fiscal
    year 1997 when the existence of the liability is probable and the
    amount is reasonably measurable, provided that the Department is
    legally liable for the clean-up. The Department is currently evaluating
    all known sites to determine the extent to which these criteria are met
    and the range of the potential liability.
        The vast majority of the Department's environmental clean-up
    responsibilities arise from non-Department and non-Federal uses of the
    lands, such as illegal dumping, landfills, mineral extraction
    operations and pipelines. In these cases, the Government's
    responsibility derives solely from the fact that it is the current
    owner of the land, and the Department is often not ``legally liable.''
    Wherever possible, the costs of clean-up will be recovered from
    responsible parties. In these cases, the standards require that the
    potential costs to be paid by the Department be discussed in the
    textual portions of the report (such as the footnotes) but not
    ``recognized'' (presented on the face of the balance sheet) as a
    liability.
        The Department will recognize the potential liability for Superfund
    and other environmental cleanup costs in its fiscal year 1997 audited
    financial statements in accordance with standards promulgated by the
    Federal Accounting Standards Advisory Board. There is no current
    estimate of the dollar amount of this liability, pending completion of
    the Department-wide evaluation.
        Question. What is your estimate of the Government's total amount of
    liability for remediation of hazardous substances on Federal lands
    overseen by Interior? What is Interior's estimate of its liability for
    Natural Resource Damages?
        Answer. Environmental liabilities, including CERCLA liabilities,
    are to be recognized in the financial statements when both the
    existence and amount of the liability are probable and reasonably
    measurable. The Department is currently evaluating all known sites to
    determine the extent to which these criteria are met and the range of
    the potential liability.
        The vast majority of the environmental clean-up responsibilities
    arise from non-Department and non-Federal uses of the lands, such as
    illegal dumping, landfills, mineral extraction operations, and
    pipelines. In these cases, the Government's responsibility derives
    solely from the fact that it is the current owner of the land. Wherever
    possible, the costs of clean-up will be recovered from responsible
    parties.
        The Department will recognize the potential liability under CERCLA
    for other environmental cleanup costs in its fiscal year 1997 audited
    financial statements in accordance with standards recently promulgated
    by the Federal Accounting Standards Advisory Board. There is no current
    estimate of the dollar amount of this liability.
        The Department of Energy produces a report called the Baseline
    Environmental Management Report that gives Congress important estimates
    on out-year costs and timetables for addressing hazardous material
    contaminations. As you probably know, cleanup costs are expected to run
    into the billions for the Department of Energy.
        Question. Does Interior have any similar information available?
    When does the Department believe it will have completed its inventory
    of contaminated sites?
        Answer. Both the Department and the General Accounting Office (GAO)
    are reviewing existing inventory data to ascertain the Department's
    status with regard to potential CERCLA liability. It is understood that
    GAO will be completing their evaluation of the fiscal year 1997
    reporting sometime in fiscal year 1998. The Department has begun
    developing a financial accounting report of sites likely to result in
    liability to the Government based upon current information.
                               prescribed burning
        In a recent speech you described your intention to increase the use
    of prescribed burning for fire suppression. At the same time, EPA and
    other Federal agencies are forcing grass growers in the Pacific
    Northwest to eliminate the burning of their fields, ostensibly to
    protect air quality.
        Question. How do you reconcile these two positions?
        Answer. Prescribed fire is used in wildlands for fundamentally
    different reasons than agricultural burning, specifically grass
    growers. Grass growers have alternative treatments available in the
    management of their lands. In the wildlands, fire is a natural
    ecological process for maintaining and sustaining healthy ecosystems.
    There are no long-term alternatives to burning that accomplish the
    necessary ecological outcomes. Further, unplanned wildfires will
    eventually occur, and without periodic treatments with fire, those
    unplanned wildfires can be catastrophic for forest and rangelands and
    pose significant threats to public safety. In some locations and
    conditions harvesting of forest products, grazing, and mechanical
    removal of fuels will reduce the risks of catastrophic fire,
    particularly, in areas with exceptionally high levels of fuel. However,
    the continual build-up of brush, needles, and young unmerchantable
    dense stands is the primary source of fuels that result in high fire
    danger and that cause ecological imbalance. The use of periodic, low
    intensity fire (either from planned ignitions or from natural
    ignitions) reduces the risk of catastrophic fire and maintains healthy
    forests and ranges. Ponderosa pine stands, aspen stands, and the
    excellent big game environments that are a mixture of brush, grass, and
    forest are examples of the result of the natural role of fire.
        By contrast, agricultural burning such as that done by grass
    growers is conducted as part of an economic activity or industrial
    process and has alternatives. Agricultural burning is not conducted to
    maintain and sustain natural forest and range systems.
        Nevertheless, burning in wildlands can produce high levels of smoke
    emissions that must be addressed in air quality programs. Since the
    wildland fuels will eventually burn anyway, smoke emissions are
    inevitable though not predictable as to exact time, place, and
    quantity. Use of planned ignitions can help reduce smoke emissions by
    setting the time and circumstances to take advantage of favorable
    atmospheric conditions and to avoid unfavorable conditions. Smoke
    management techniques are routinely applied and many States have smoke
    management programs to mitigate the effects of wildland burning. The
    Department is participating in an EPA-lead effort to work with land
    managing agencies and State regulatory authorities to develop better
    procedures to ensure that the public policy objectives of using fire to
    maintain healthy ecosystems and improving air quality can both be
    achieved.
        Some in the Forest Service have expressed the opinion that you are
    overselling the potential benefits and uses of prescribed fire, in
    large part because fuel loading in many parts of the country is too
    great to allow fire to be used safely without first conducting
    extensive thinning or salvage logging.
        Question. Any comment on this assessment?
        Answer. Fire is the only effective option in the long run to
    restore, maintain, and sustain healthy forests and rangelands. In some
    areas, especially near human developments and near unique natural
    resources, mechanical fuels removal may be the safest and most feasible
    initial treatment. In some cases, vegetation will have to be maintained
    by continued mechanical thinning; in others, prescribed fire can be
    used to maintain open stands and low fuel conditions that are first
    reestablished by mechanical treatments. Extensive stands of open
    ponderosa pine, mixed conifer, and other forests in which fires burned
    frequently under natural conditions have become too dense, and have
    been invaded by non-fire adapted and extremely flammable tree species.
    The fuel ladders created by these young trees have contributed to the
    increase in large, catastrophic wildfires in recent years. Other
    forests, such as the pinyon/juniper in the intermountain west, have
    also become more dense and have invaded areas that were once open
    grass/shrub lands or savanna of grass and scattered trees. Such stands
    would be candidates for mechanical thinning as an initial fuels
    treatment.
                               counter terrorism
        Department of the Interior agencies received emergency supplemental
    funding in fiscal year 1997 for counter terrorism activities.
        Question. Please provide for the record a description of how the
    various bureaus have spent, or plan to spend, these funds.
        Answer. In fiscal year 1997, the Congress appropriated emergency
    supplemental funding to FWS and the National Park Service (NPS) for
    operational and construction requirements to address counter terrorism
    and security concerns. The FWS received $1.5 million and NPS received
    $8.6 million for these activities.
        The FWS is using $1 million to purchase radios to upgrade the
    current law enforcement communication systems in order to comply with
    FCC standards and provide encryption capabilities resistant to
    unauthorized interceptions of transmissions. The remaining $500,000 is
    being expended to purchase and upgrade law enforcement computer systems
    to prevent unauthorized intrusions into law enforcement databases.
        The NPS has allocated their funding to four high profile park
    sites, including Mount Rushmore National Memorial, Jefferson National
    Expansion Memorial, Independence National Historical Park, and the
    Monument Core of the National Capital Region (Washington Monument,
    Jefferson and Lincoln Memorials, Vietnam Veterans Memorial, Lafayette
    Park, and the Ellipse), to implement security systems, acquire
    equipment, and hire staff to ensure that these likely targets of any
    terrorist activity are protected.
                               welfare initiative
        The President recently announced an initiative to increase hiring
    from welfare rolls for Federal positions.
        Question. How will this initiative impact the Department of the
    Interior?
        Answer. The Department of the Interior completely supports the
    President's initiative to move Americans off the welfare rolls and onto
    the work rolls. But the President did not ask agencies to create work
    or provide anything different to employees hired under this initiative.
    And we do not intend to.
        This initiative simply asks agencies to look at what positions they
    have available or anticipate having available that might possibly be
    filled with people who are coming off the welfare rolls--people who
    might have little or no skills. Given that directive, the Department of
    the Interior is turning to the welfare rolls as an additional
    recruitment source.
        This effort may require that some jobs be restructured. In our
    Welfare-to-Work Plan we have identified positions such as clerk,
    laborer, maintenance worker, teachers aide, that are normally filled at
    lower grades which can easily be restructured, if necessary, to allow
    applicants with limited skills to qualify.
        Since Veteran's preference and career transition regulations are
    still applicable, and since there were no special authorities or laws
    that would allow us to give any preference to welfare recipients, we
    view the welfare-to-work program as only a focused recruitment effort.
        Question. How many positions does the Department expect to fill in
    this manner in fiscal year 1997? fiscal year 1998?
        Answer. The Department has set goals for hiring 50 welfare
    recipients in fiscal year 1997 and 75 in fiscal year 1998. Given that
    the Department has approximately 70,000 employees and does a great deal
    of hiring of temporary employees, these are not significant numbers.
        Any training or support services provided to these employees will
    also be available to any other employee who has a similar need. For
    example, our Employee Assistance Program currently provides referrals
    for employees who have concerns such as family issues and credit
    problems. In fact, we see this focus on employing welfare recipients
    and the types of services that they might need, as a way of enhancing
    our quality of work life programs for all employees, which is a current
    focus in the Department.
        Question. Will this initiative have any impacts on program funding
    requirements?
        Answer. We do not anticipate the welfare-to-work initiative to have
    any impact on program funding. We see this as a positive step in
    leading by example and creating a better work environment for everyone
    who works for the Department of the Interior.
                           Bureau of Land Management
                         oil and gas management program
        The BLM proposes to reduce its Oil and Gas Management program by
    $500,000 and 7 FTEs in fiscal year 1998. The program request for 1998
    is $52.47 million and 803 FTEs. The reductions are modest, but they
    illustrate a turning away from extractive uses on the public lands. The
    reductions will result in the stoppage of low priority lease
    application processing in Alaska, Arizona, and Idaho.
        Question. Given all of the proposed increases in BLM programs, how
    do you justify these reductions in the oil and gas program?
        Answer. The reductions are based on sound business practices, i.e.,
    we will continue to act on applications that provide the most promise
    of resulting in oil and gas production. Streamlining program activities
    will also save money and thus there will be no overall diminution of
    the oil and gas program.
        Even though these may be low priority lease applications, they
    still offer the hope of new discoveries that the Nation needs.
        Question. How does the reduction of oil and gas leasing
    opportunities on public lands help the Nation's growing dependence on
    imported oil?
        Answer. We believe that leasing opportunities on public lands will
    not be reduced. The number of applications received for lands in
    Alaska, Arizona, and Idaho is extremely small. In some years we receive
    none. These applications are expensive to process. By focusing on areas
    of higher potential the public is well served.
        I know that the Interstate Oil and Gas Compact Commission (IOGCC)
    is negotiating with the oil producing States concerning transfer of
    certain oil and gas lease management functions to the States.
        Question. When do you expect to bring this effort to closure? Will
    the Department require legislation to implement elements of any such
    transfer? If so, when do you expect to transmit such legislation to the
    Congress? Do you expect savings as a result of this transfer?
        Answer. At a May 2, 1997, meeting with the IOGCC there was
    agreement reached to form a steering committee made up of BLM and State
    representatives which would work to reduce or eliminate duplication,
    streamline processes, create efficiency, reduce regulatory burdens on
    operators, and reduce the cost to the taxpayer. At the same meeting, it
    was agreed that within 90 days (by August 2, 1997) any State wishing to
    request a delegation would submit a complete proposal or letter
    declining to participate. States would still be able to request
    delegations under the provisions of the Federal Oil and Gas Royalty
    Management Act (FOGRMA) of 1982.
                             wild and scenic rivers
        The House Report accompanying the Fiscal Year 1995 Interior and
    Related Agencies Appropriations Act directed BLM and the Forest Service
    to prepare a report on funding for activities associated with wild and
    scenic rivers.
        Question. Was this report ever completed? If so, please transmit a
    copy of the original report and any updates to the Committee. If it was
    not completed, why not?
        Answer. House Report 103-551 accompanying the 1995 Department of
    the Interior and Related Agencies Appropriation Act directed BLM to
    report on: 1) the amount of money spent on Wild and Scenic River (WSR)
    studies and management plans in fiscal year 1994 and projected to be
    spent in fiscal year 1995; 2) the status of studies and management
    plans required by statue and the extent to which statutory obligations
    under the WSR Act could not be met by existing and planned funding; and
    3) the amount of funding necessary for fiscal year 1996 to complete WSR
    studies and management plans on time.
        The following report was completed in 1995.
        The BLM WSR program includes implementation of 33 management plans
    covering 2,022 miles of BLM administered rivers in the National WSR
    System. The BLM started monitoring specific WSR program expenditures in
    fiscal year 1995. As of January 30, 1995, BLM has spent $419,000 on the
    WSR program, which extrapolates to approximately $1.3 million for the
    entire fiscal year. Based on the consistency of the BLM WSR program,
    funding levels for fiscal year 1994 and fiscal year 1996 are assumed
    and projected to be approximately the same as those projected for
    fiscal year 1995.
        Section 5(d) of the WSR Act requires that BLM evaluate potentially
    eligible river segments in conjunction with land use planning, but the
    WSR Act does not specify a deadline for completion of this work.
        The BLM remains in compliance with the WSR Act and will continue to
    evaluate potential WSRs under its Resource Management Planning process.
    The fiscal year 1996 funding level for WSRs is consistent with BLM's
    proposed planning schedule.
        The information in that report is still correct. In addition, BLM
    is currently implementing the management plans that cover all 34 of the
    BLM administered rivers in the National WSR System. During the
    completion of Resource Management Plans (RMP) and/or amendments to
    them, BLM conducts evaluations of rivers and then makes recommendations
    regarding their suitability for designation as a WSR. The WSR Act does
    not specify a deadline for such evaluations.
        In fiscal year 1995 and 1996, BLM expended $1.9 million and $0.9
    million respectively, in administering the WSR Program. Expenditures
    for fiscal year 1997 are projected to be approximately $1 million.
                 sale of the alaska power administration (apa)
        The 1995 Alaska Power Administration Asset Sale and Termination Act
    directs the Secretary of Energy to sell all APA assets, including two
    hydroelectric projects and related transmission facilities. The Act
    also requires other Federal agencies to assist in the sales and
    conveyances. I understand BLM and the Forest Service are directly
    involved in the land issues surrounding these sales.
        Question. Are sufficient funds requested in the President's fiscal
    year 1998 budget to complete all remaining tasks with respect to these
    sales?
        Answer. Yes, there are sufficient funds in the President's fiscal
    year 1998 Budget for BLM to complete its work related to these sales.
    These sales are scheduled to be completed in fiscal year 1998.
                                     helium
        With passage of the Helium Privatization Act, BLM should be able to
    reduce its number of FTEs by 23 positions in fiscal year 1998. However,
    BLM absorbs these FTEs and puts them into traditional programs.
    Congress passed the Helium Privatization Act in part to reduce the size
    of government.
        Question. Does the Department anticipate any savings, as Congress
    had intended?
        Answer. The President's Budget shows a direct savings of 23 FTEs
    and $7 million in the cost to operate the helium program. From 1996 to
    the end of fiscal year 1998, there will be a reduction of in excess of
    100 positions. During the phase-out period, large severance payment
    costs will be incurred in 1998, however, significant savings will be
    realized in future years as intended by the passage of the Helium
    Privatization Act.
                  grand staircase-escalante national monument
        The very first thing BLM highlights in its overview is a
    justification for requesting $5 million of new budget authority to be
    used in the creation of the Grand Staircase-Escalante National
    Monument. This is added to the $1.6 million that BLM was already
    spending in this area. The creation of a national Monument is
    tantamount to the creation of a national park. It will draw a lot of
    visitors and it will continue to consume significant budget resources.
        Question. How are you going to keep this Monument from consuming
    ever-increasing amounts of the BLM budget?
        Answer. The BLM will handle proposed allocations for the Monument
    through the agency's normal budget process. By following customary
    budget procedures, BLM will consider funding for the Monument in the
    context of other resource management priorities. The Monument is a high
    priority for BLM. However, the agency recognizes that it must seek a
    balance in meeting the needs of the Monument as part of the BLM's
    overall mission and responsibilities.
        Question. What activities will have to be forgone in order to
    support the Monument, not only this year but in years to come?
        Answer. The BLM has requested an increase of $5 million in the 1998
    President's Budget. Once the 1998 funding levels for the Monument are
    established, future funding allocations for the Monument will occur
    through the normal budget process. The budget process serves to
    evaluate BLM's priorities and needs, as well as to present workload
    units to be accomplished to support those funding priorities and needs.
    As work is accomplished, or as priorities change, the budget request is
    modified to reflect the changes.
        When the Congress creates a national park, it does so with a
    recognition that it comes with long-term financial responsibilities.
        Question. How will the Department and BLM find ways to support the
    Monument without sacrificing the agency's multiple use
    responsibilities?
        Answer. The Monument encompasses public lands that were previously
    managed by BLM for multiple uses, and many of these same uses will
    continue within the Monument. Thus, the President's designation
    complements the BLM multiple-use mandate regarding activities such as
    livestock grazing and basic visitor services. Through the budget
    process, BLM has identified some Monument area activities for
    additional funding, including recreation and interpretation. These
    activities have been underfunded in the past, and BLM would have
    recommended increases regardless of the Monument's designation.
    Interior and BLM identify new funding needs through the normal budget
    process, which considers the long-term needs of the entire Department.
        Question. How much of the $5 million of new request will go to
    local communities?
        Answer. In 1997, through a cooperative agreement BLM has agreed to
    provide up to $200,000 to Kane County to facilitate its participation
    in the Monument planning process. Although Garfield County initially
    refused any planning assistance, they have just agreed to enter into
    their own cooperative agreement with BLM that would provide $50,000 to
    facilitate participation in the planning for the final months of fiscal
    year 1997. In addition, BLM previously agreed to extend cooperative
    agreements to both counties during the 1997 field season for law
    enforcement, search and rescue, and trash removal costs associated with
    the Monument. Subject to Congressional appropriation, BLM is also
    exploring further cooperative funding options with Kane and Garfield
    Counties regarding law enforcement, search and rescue, trash removal
    and planning for fiscal year 1998. In addition, BLM plans to share
    various resources with Kane and Garfield counties, which will result in
    significant savings for the counties. These resources include
    communications facilities for law enforcement, road signs, and
    Geographic Information Systems (GIS) databases. The BLM estimates the
    value of these shared resources as follows: GIS ($400,000); road signs
    ($50,000); visitor information materials that address dangers
    associated with visiting the Monument ($10,000); road maintenance
    ($50,000); law enforcement ($30,000); sanitation ($60,000); and search
    and rescue access to communications towers and other equipment
    ($100,000).
                              blm law enforcement
        The BLM is requesting an additional $2.054 million and 7 FTEs in
    its law enforcement program.
        Question. How much of this additional funding did BLM intend to use
    in its effort to consolidate its various law enforcement regulations,
    as it had announced?
        Answer. None of the additional funding is to be used to consolidate
    the various law enforcement regulations. The $2.054 million in
    additional funding is intended to reinvigorate the BLM drug enforcement
    efforts within existing BLM law enforcement authority and is being done
    at the direction of the Office of National Drug Control Policy (ONDCP).
        Question. How much was the consolidation going to cost?
        Answer. The proposed consolidation of the BLM law enforcement
    regulations would have had no cost impact.
        In response to criticism of the BLM plan to consolidate its law
    enforcement regulations, you announced on March 11 that BLM would
    shelve its plan to consolidate its various law enforcement regulations.
        Question. Does BLM still need the entire additional $2.054 million
    for law enforcement or can we use that money somewhere else?
        Answer. Yes, BLM does need the additional $2.054 million increase
    in the law enforcement budget to conduct an effective drug enforcement
    program to suppress marijuana cultivation and methamphetamine
    production activities that impact the public lands. The ONDCP has
    directed BLM to spend this additional funding in support of the
    national drug strategy to reduce all domestic drug production and
    availability on public land.
                           payments in lieu of taxes
        The BLM budget proposes a reduction of $12 million in the Payment
    In Lieu of Taxes (PILT) program. The PILT program is the money the
    Federal Government pays to local governments to compensate those units
    of government for the loss of taxes that they would otherwise collect
    if the land were in private hands. The PILT payments were $113.5
    million in 1996, $113.5 million in 1997, and are proposed at $101.5
    million in 1998.
        Question. Why do you propose a reduction in payments to local units
    of government that cannot tax the Federal Government for its occupancy
    of lands within States at a time when the Administration seems to be
    re-doubling its efforts to acquire lands--the Headwaters Forest, Grand
    Staircase-Escalante National Monument, and Crown Butte mining land
    comes to mind?
        Answer. The BLM budget request for PILT is the same as its proposal
    for 1997; Congress appropriated an additional $12 million above the
    1997 requested level.
        Question. Do you think that local units of government are entitled
    to PILT payments?
        Answer. The BLM supports and administers the PILT program that
    makes payments to units of local government that contain certain
    Federally owned lands within their boundaries (the Federal lands that
    qualify include not just BLM lands but lands in the National Park
    System, the National Forest System, National Wildlife Reserve Areas,
    plus a variety of other categories). The amount of payment is
    determined by several codified formulas and is designed to supplement
    other Federal land revenue sharing payments that county governments may
    be receiving.
        Question. How do you explain to local governments that BLM needs
    the money to expand existing programs more than they need it for their
    local needs? What do you propose to use the money for rather than
    making PILT payments?
        Answer. The BLM 1998 budget proposal for PILT is the same as its
    proposal for 1997. However, in 1997 Congress appropriated an additional
    $12 million above the request level. The Administration's commitment to
    deficit reduction has made it impossible to seek budget increases for
    all programs.
        Question. How does the Department intend to deal with the addition
    of land in the unorganized boroughs of Alaska, which accounts for 60
    percent of Alaska?
        Answer. For many years after enactment of the PILT program by
    Congress in 1976, BLM interpreted the law to mean that unorganized
    boroughs in Alaska, and organized cities within them, did not qualify
    for PILT payments. However, this interpretation did not take into
    account the organized cites with the borough which qualify separately
    under the PILT statute. In response to a request from the BLM Director
    in late 1993, the Solicitor's Office rendered an opinion in July 1994
    that organized cities located within unorganized boroughs do qualify
    for PILT payments. Thereafter, BLM started including these organized
    cities in their PILT calculations.
        In November 1996, Public Law 104-333 was enacted, which amended the
    PILT Act's definition of unit of general local government to include
    unorganized Alaska boroughs as eligible for PILT payments. In
    accordance with this recent amendment, BLM will add the census areas
    contained in the unorganized borough to the units of local government
    previously determined eligible for PILT payments.
        Question. How much additional PILT money will Alaska be entitled to
    with this addition?
        Answer. As we testified before the Senate Energy and Natural
    Resources Committee on June 11, 1996, we estimate that this will
    increase the total PILT payments to the State of Alaska by
    approximately $1.5 to $2.5 million, based upon current appropriated
    levels of $113.5 million.
        The unorganized borough of Alaska was added to the list of eligible
    local governments at the end of the last Congress--long before the
    Department put together its budget request for fiscal year 1998.
        Question. Why doesn't the Department budget request reflect this
    additional need?
        Answer. The Department's June 11, 1996, testimony clearly stated
    that we did not oppose adding the unorganized borough to the list of
    units of local governments eligible for PILT payments, but would not
    support expanding the scope of the PILT program in such a way as to
    lead to an increased need for annual appropriations at the expense of
    higher priorities.
        The PILT payments are allocated according to a formula set by law,
    from a fixed pool of funds appropriated by Congress. This fixed pool
    means that, within the appropriated funds, an enlargement of eligible
    lands in one State will diminish the entitlements of other States and
    local governments.
        Payments to each unit of general local government are based on the
    number of acres of Federal entitlement land within each unit of general
    local government. Federal entitlement land is defined to include, among
    others, lands within the National Forest and National Park systems,
    lands managed by BLM, and lands affected by Federal water resource
    development projects.
        For payments under Section 6902 of the PILT Act (payments for
    Federal lands in the National Forest System and the National Park
    system, lands administered by BLM, lands in Federal water resource
    projects, dredge areas maintained by the Corps of Engineers, inactive
    and semi-active Army installations, and some lands donated to the
    Federal Government), the number of acres of Federal entitlement land is
    multiplied by one of two formulae, whichever one provides the largest
    amount of PILT payments for each unit of general local government.
    Payments under either alternative are subject to population payment
    ceilings for each unit of general government eligible to receive
    payments as the principal provider of government services under Section
    6901(2)(A). The payment ceilings are based on a sliding scale, for last
    fiscal year they started at $77.33 per capita for populations of 5,000
    and under, and going to $30.83 per capita for populations of 50,000.
    These figures were then adjusted upward for inflation.
        The two formulae are:
      --(1) Multiply the number of acres of Federal entitlement land within
            each qualified unit of general local government by $1.16 (in
            fiscal year 1996). Compare this amount to the population
            ceiling amount, and use whichever is lower. Subtract from that
            total the amount of funds received by the unit of general local
            government in the prior fiscal year under the following Federal
            programs: the Department of Agriculture Appropriations Act of
            May 23, 1908; the Enabling Act of Arizona and New Mexico of
            June 20, 1910; the Mineral Lands Leasing Act of 1920; Section
            17 of the Federal Power Act; the Taylor Grazing Act; the
            Bankhead-Jones Farm Tenant Act; the Superior National Forest
            State of Minnesota Act of June 22, 1948, as amended by the Act
            of June 22, 1956; Section 6 of the Mineral Leasing Act for
            Acquired Lands; Section 3 of the Material Disposal Act; and the
            Refuge Revenue Sharing Act; as amended. Finally, prorate the
            amount down to the appropriated amount of funds in the PILT
            pool.
      --(2) Multiply the number of acres of Federal entitlement land by 16
            cents. Compare this amount to the population ceiling amount.
            Use whichever is lower. Unlike the first formula, do not deduct
            for prior year payments. Finally, prorate the amount down to
            the appropriated amount of funds in the PILT pool.
        Under the 1996 amendment, BLM will add the census areas contained
    in the unorganized borough to the list of units of general local
    government.
        Typically, there is only one recipient of PILT moneys in an area,
    because in most situations the PILT entitlement is to units of general
    local government that are the principal providers of governmental
    services within the area (e.g., police and fire protection). Thus, a
    county would not receive PILT moneys, if a city or township within that
    county were the principal provider of government services in that area.
        Only the Federal lands within the boundaries of the service area
    for that unit of general local government that is the principal
    provider of government services is considered in determining the PILT
    entitlement. In most instances, this results in counting most Federal
    lands that may be counted as entitlement lands under the statute, and
    in all instances it results in no double-counting of populations or
    lands. The exception to this rule has been Alaska's unorganized
    borough, where cities and townships to Section 6901(2)(A)(i), qualify
    under that subsection as units of general local government, but the
    boundaries of those cities do not encompass most of the Federal lands
    within the unorganized borough, and the unorganized borough does not
    qualify as unit of general local government under the statute because
    it does meet the criteria for a unit of general local government, e.g.,
    it is not mentioned as a unit of general local government that may
    qualify for payments under the statute, and it does not in fact provide
    any government services as required under the statute.
        Senator Stevens' amendment does direct payments to be made to the
    State of Alaska for the unorganized borough, but it does not qualify
    the borough as a unit of general local government, and it does not
    disqualify organized cities within the borough as units of general
    local government. Thus, the organized cities within the unorganized
    borough remain eligible recipients under a separate provision of the
    PILT statute for a separate PILT payment based on entitlement lands
    within the boundaries of the area for which they are the principal
    providers of government services. And that is how BLM is administering
    PILT under the 1996 amendment--it does not pay the unorganized borough
    and organized cities within the boroughs for the same Federal acres.
        Question. I understand that since the unorganized borough of Alaska
    was made eligible for PILT in the last days of the last Congress, BLM's
    regional solicitor in Alaska has either produced or found a previously-
    produced document that cuts against some of the work that Senator
    Stevens accomplished with the amendment to the PILT Act.
        Answer. The Alaska Regional Solicitor's office did not find any
    previously produced document that cuts against the Stevens Amendment to
    the PILT Act. The history of that office's addressing this issue is
    recounted in the answer above.
        The first opinion was provided to BLM by the Regional Solicitor on
    July 14, 1994. It stated that under the PILT law in effect at that
    time, the unorganized borough was not eligible for PILT payments, but
    organized cities within the unorganized borough which serve as the
    principle providers of governmental services that have PILT entitlement
    land within their jurisdiction do qualify for PILT payments. This
    opinion in fact maximized the number of eligible populations that could
    receive PILT moneys within unorganized boroughs under the PILT law as
    it existed prior to the enactment of Senator Stevens' amendment.
        In light of the 1996 amendment to the PILT Act, BLM asked the
    Regional Solicitor to assess its effect. In response, the Solicitor's
    Office pointed out that, even with the 1996 amendment, the statute
    still provided that payments are to be made to cities which are units
    of general local government within the unorganized borough. The
    Solicitor's Office also pointed out that the 1996 amendment for the
    first time made lands in the unorganized borough eligible for PILT
    payments. Finally, the Solicitor's Office concluded that separate
    payments must be made for the qualifying cities based on their
    populations and entitlement lands within such cities, and for the
    unorganized borough based on the population and entitlement lands
    outside of qualifying cities.
        This conclusion is consistent with how BLM administers the PILT
    program outside of Alaska, and is also consistent with what we discern
    to be Senator Stevens' purpose in introducing the amendment.
    Specifically, in proposing the amendment, Senator Stevens stated:
        It is a matter of fairness--60 percent of the Federal lands in
    Alaska are not included under current PILT calculations. Alaska is the
    only State not fully compensated for all of its Federal lands. Even the
    territories and the District of Columbia are fully compensated. (141
    Cong. Rec. S9517-02, *S9534).
        This statement reflects the Senator's concern to include Federal
    lands in unorganized boroughs--and outside of organized cities--in
    current PILT calculations. It does not suggest that double-counting of
    Federal land within the boundaries of unorganized boroughs and also
    within the boundaries of organized cities was the intent of the
    amendment.
        Question. My staff has been told by BLM staff that BLM, subsequent
    to working with Senator Stevens' staff on the amendment language,
    ``found'' information that suggests that small population centers
    within the unorganized borough were eligible for PILT payments without
    the amendment and should have been receiving payments.
        Answer. While BLM did testify at the committee hearing on this
    bill, and did not oppose it, BLM did not work on the actual amendment
    language. The Departmental witness who testified on this amendment
    specifically noted that ``[u]nder current law, Federal entitlement land
    in the unorganized borough located outside the boundaries of an
    organized city does not qualify for PILT payments.'' (Testimony of Gwen
    Mason, Senate Energy and Natural Resources Committee, June 11, 1996,
    emphasis added.) This clearly reflects that BLM was aware, and had
    informed Congress that organized cities fell within the already
    existing PILT entitlement for units of general local government.
        Immediately upon receipt of the July 1994 opinion, BLM began
    gathering the necessary data to include the organized cities in the
    units of general local government eligible for PILT payments. Since
    payments are based on data from the previous year, the first year BLM
    was able to make those payments was 1996, based on 1995 data, and those
    payments were made.
        Question. My staff has also been told by BLM that it is possible
    that BLM's position will be that a mistake was made for many years but
    that it will not make back payments for moneys not paid. At the same
    time, BLM will not allow the populations of these ``pocket''
    communities within the unorganized borough to be counted in the total
    population of the unorganized borough that is now eligible for PILT.
        Answer. As indicated in the previous answer, as soon as the
    Regional Solicitor advised BLM that the organized cities were eligible
    for PILT payments, BLM added them to the list, the data was gathered,
    and they were paid. The BLM did not attempt to gather data from
    previous years to make back payments. The BLM in good faith
    administered the law in one way until advised by the Solicitor's Office
    the law was otherwise, and there is no provision for back-payments to
    correct errors without express authority from Congress.
        The question of whether BLM should double-count Federal acreage in
    organized cities within unorganized boroughs for purposes of PILT
    payments is a separate question. We believe the plain text of the 1996
    amendment, as well as the intent of its sponsor, was not to authorize
    such double-counting, but instead was only to allow Federal land
    outside of organized cities in unorganized boroughs to be counted for
    the first time.
        As you know, the PILT formula considers both acreage and
    population. In a State like Alaska, and particularly in sparsely
    populated regions like the unorganized borough, every body counts.
        Question. Are you aware of this memorandum? What is your opinion or
    that of Solicitor Leshy?
        Answer. Solicitor Leshy has reviewed both the 1994 and 1996
    Regional Solicitor's Opinions and agrees with their conclusions.
        Question. If BLM failed to make payments as required or authorized
    under the law, will it make back payments to these communities in
    Alaska? Why or why not?
        Answer. Since there is no separate appropriation for back payments,
    the BLM is not able to make back payments.
        The BLM has refused to release the regional solicitor's memorandum
    to my staff or Senator Stevens' office.
        Question. When will you provide this opinion to the Committee for
    us to use as we consider the fiscal year 1998 budget for PILT?
        Answer. The opinion has been provided.
                                range management
        For fiscal year 1998, the BLM budget proposes a reduction of $1.6
    million dollars in range improvement activities. The 1996 authorization
    was $9.1 million, the 1997 authorization is $9.1 million, and the
    request for 1998 is $7.5 million. The explanation for this reduction is
    an expected reduction in grazing receipts. According to the Public
    Rangelands Improvement Act (PRIA) of 1978, BLM should request the
    larger of $10 million or 50 percent of the grazing fees collected.
        Question. Given the requirements of PRIA, how can this reduction be
    justified, particularly in light of increases in other land management
    areas?
        Answer. The BLM 1998 request was based on a technical
    interpretation of what is available for this appropriation, which
    provided for 50 percent of the receipts projected for fiscal year 1997
    (half of $14.8 million) as opposed to the $10 million called for in
    PRIA.
        Quoting directly from the budget summary, ``The anticipated
    decreases in [range improvement activities] will have profound impacts
    on the BLM's ability to improve resource conditions on a landscape
    basis.''
        Question. Given this Administration's emphasis on environmental
    stewardship, how can you justify under-funding rangeland improvements?
    What do you say to the professional range management specialists in
    light of the fact that so many other land resource programs are
    proposed for increases?
        Answer. Based on the technical interpretation that 50 percent of
    the receipts (grazing fees) from permittees and lessees that graze
    livestock on public lands is available for this appropriation it was
    not under-funded. Efforts will be made to maintain the 1997 level of
    noxious weed management which is of major concern to Federal, State,
    and local governments as well as private land owners. This will be
    accomplished by deferring other types of range improvement projects
    such as fences.
                          wild horse and burro program
        In recent months, Interior has been criticized for its Wild Horse
    and Burro program. There have been allegations of BLM negligence, even
    concealment, with respect to slaughter of wild horses from public
    rangelands in the West.
        Question. What is your response to these allegations?
        Answer. The BLM's policy is to maintain animals as a natural part
    of the range ecosystem. When necessary to protect both the health of
    the range and to maintain a thriving herd, BLM oversees gather
    operations to remove excess animals which are placed in our Adopt-a-
    Horse or -Burro Program. We treat all gathered equines humanely,
    assuring they receive veterinary care and are well fed and cared for
    prior to adoption. We also assign each animal a unique number--a freeze
    mark--which is useful in tracking that animal throughout its stay at a
    preparation center, its shipment to an adoption center, and its
    adoption to a private individual. This identifier is entered into a
    computer which can be queried by any BLM wild horse and burro office
    for tracking animals and answering questions posed by curious adopters.
        The BLM is committed to doing all that it can to ensure that wild
    horses are placed in homes that will provide humane care. The BLM
    screens individuals to assure they understand the financial
    responsibility and need for proper facilities to care for an animal;
    such as corrals and shelters. Under recently enacted regulations, BLM
    will begin offering some adoptable horses on a competitive bidding
    basis. When not using competitive bidding, BLM will charge a uniform
    base fee of $125 per animal. The competitive bidding process is
    expected to result in higher adoption fees for some animals, which will
    help defray expenses for the program. Higher adopter investment costs
    should also further diminish what minimal profiteering incentives may
    exist for adopting horses and sending them to slaughter after title.
        Title may be received for no more than four animals in a year. The
    majority of adopters adopt only two animals. The adopted wild horse or
    burro remains the property of the Federal Government for one year.
    While the title to the animal is retained by the Federal Government,
    BLM regulations prohibit the sale of the animal, prohibit use as rodeo
    stock, and prohibit neglectful treatment of the animal. This one-year
    waiting period serves as a deterrent to people who want to immediately
    profit by selling their untitled animals. The cost of caring for an
    animal for a year runs an average of $1,000 or higher, depending on the
    part of the country, making it economically impractical for people to
    profit after title is issued. Despite these safeguards, some wild
    horses that are titled and are no longer under Federal protection are
    sent to slaughterhouses. However, none of the animals cited in the
    articles were Federally protected.
        The BLM often performs compliance checks prior to passage of title
    to an animal. Compliance checks are done on all complaints; random
    checks are performed on other adopters. Title is approved only after
    inspection by a veterinarian, humane officer, or other similarly
    qualified individual. About 150,000 wild horses and burros have been
    placed in private ownership since the program began. In 1996, BLM
    conducted almost 3,000 random checks and responded to over 200 horse
    neglect complaints which led to the repossession of 52 horses and the
    reassignment of 317 horses to other adopters.
        Question. Is the Department investigating the allegations?
        Answer. In 1993, the BLM began implementation of the Strategic Plan
    for the Management of Wild Horses and Burros on Public Lands. This plan
    established goals which address wild free-roaming horses and burros as
    important and perpetual components of the rangeland ecosystem. The plan
    also ensures humane care and protection for those animals removed from
    the range and placed into the adoption program. We continue to evaluate
    our performance. We have recently completed two such evaluations: The
    Wild Horse and Burro Program Emergency Evaluation Team, completed in
    January, 1997; and the Wild Horse and Burro Adoption Program Policy
    Analysis Team, completed in April, 1997. The recommendations from these
    two teams will result in improved herd management, healthier animals on
    the land, and increased protection for animals in the adoption program.
    In addition to these completed evaluations, we currently have several
    evaluations underway targeting improving our veterinary practices and
    monitoring of animal health on public lands. These evaluations are
    being conducted with the participation of representatives from the
    veterinary and scientific communities.
        Because allegations that BLM employees may have been involved in
    deliberate profit-taking from the sale of wild horses for slaughter,
    Assistant Secretary for Land and Minerals Management, Bob Armstrong,
    ordered an immediate investigation by BLM's law enforcement special
    investigators. In the course of the investigation, teams of law
    enforcement agents and wild horse experts were sent to eight horse
    slaughterhouses in the United States and one in Canada. With the
    cooperation and assistance of meat processing plant owners and
    managers, the teams reviewed data from the last two years. They found
    that about 266,000 horses were slaughtered during 1995 and 1996 and
    that less than one quarter of one percent, about 350 per year, were at
    any time wild, Federally protected, or managed by the BLM. In contrast,
    the wild horse adoption program adopts approximately 8,000 horses each
    year to qualified adopters.
        About a month ago, BLM announced that it is moving management of
    the Wild Horse and Burro Program from Reno, Nevada, to Washington, DC.
        Question. How many personnel transfers will this move entail?
        Answer. On February 10, 1997, the Acting Director of BLM reassigned
    responsibility for the wild horse and burro program from Nevada BLM to
    the BLM headquarters in Washington, DC. The existing wild horse and
    burro staff in Reno will not be moved but will remain in their present
    location and report directly to Washington rather than the State
    Director for Nevada. The purpose of this reorganization is to provide
    for personnel in the headquarters office with expertise in the wild
    horse and burro program. These personnel will be responsible for
    coordinating policy, communicating with the Congressional delegations,
    the media, and national level organizations interested in the welfare
    of wild horses and burros, and coordinating the national budget. The
    Wild Horse and Burro National Program office, located in Reno, Nevada,
    will remain in its current location and be responsible for coordinating
    all operational matters relative to the management of wild horses and
    burros. None of the Reno staff will be relocated to Washington.
        The reorganization will require that several additional staff be
    added to the Washington Office. One new position is presently being
    recruited for the Washington staff and two additional staff persons
    will also be recruited sometime in the future.
        Question. How much is this going to cost?
        Answer. The reassigning of responsibility of the Wild Horse and
    Burro Program from Reno, Nevada to Washington, D. C., and the
    additional three personnel will cost approximately $250,000 annually.
        Question. Will there be cost savings for the Government?
        Answer. Although it will cost BLM more to have this staff in
    Washington, they will be the contact point to provide increased
    coordination with Congress, other agencies, and National Wild Horse and
    Burro advocacy groups.
        Question. Was this transfer in response to criticism of BLM
    mismanagement of the Wild Horse and Burro Program?
        Answer. The reassigning of responsibility for the wild horse and
    burro program from Nevada to Washington, D. C., was the result of a
    recommendation made by The Wild Horse and Burro Program Emergency
    Evaluation Team. This team was established in August 1996 as a result
    of the drought conditions experienced in Nevada last summer. The Team's
    recommendation for reorganizing the program was based on the need to
    improve wild horse and burro program representation in Washington. The
    recommendation was not based on criticism presented in the recent
    Associated Press article and, in fact, the draft report presented the
    recommendation for reorganization prior to release of the news
    articles.
        Question. How does moving management from the public land region of
    the West to Washington, D.C. solve the problem?
        Answer. The reorganization will allow the wild horse and burro
    program to have a stronger presence in the headquarters office and a
    stronger voice in coordination with other programs. Improved
    communication with the BLM Directorate will aid in resolving many of
    the recurring issues facing the program.
        Question. Is the transfer of management responsibilities temporary
    or permanent?
        Answer. This reorganization of the program is expected to be
    permanent.
        Question. What kind of assurances can you provide the members of
    this Committee that transfer of the management of the Wild Horse and
    Burro Program from Reno to inside the beltway, along with an increased
    budget, will solve the problems that exist within the Program?
        Answer. The BLM is committed at the highest level to improving our
    management and protection of wild horses and burros. We are continually
    evaluating the performance of the Wild Horse and Burro Program. We have
    recently completed two such evaluations: The Wild Horse and Burro
    Program Emergency Evaluation Team (Pierson Report), completed in
    January 1997; and the Wild Horse and Burro Adoption Program Policy
    Analysis Team (Culp Report), completed in April 1997. The Acting
    Director has accepted the recommendations from these reports. The
    Pierson report found that while operational parts of the Wild Horse and
    Burro Program such as scheduling and coordination of animal gathers and
    adoptions had improved, coordination with other closely related BLM
    programs such as Rangeland Management, Wildlife Management, and
    Watershed Management was disconnected under the old organization. It
    also found that the public who have a high degree of interest in Wild
    Horse and Burro management (ranchers and wild horse advocates) thought
    they had lost the ability to make their views known to the highest
    levels of BLM management. We believe that the new organization will
    remedy those problems while retaining the best aspects of the old
    organization. Other recommendations from these two teams will result in
    improved herd management, healthier animals on the land, and increased
    protection for animals in the adoption program. The increased funding
    is necessary to implement these recommendations. In addition to these
    completed evaluations, we currently have several evaluations underway
    targeting improving our veterinary practices and monitoring of animal
    health on public lands. These evaluations are being conducted with the
    participation of representatives from the veterinary and scientific
    communities.
        The Wild Horse and Burro Program is about a $16 million program
    annually. For fiscal year 1998, the Department's request includes a $2,
    443,000 increase.
        Question. The request was put together before announcement of the
    move of the program management to D.C. How much of the increase will be
    used for this move?
        Answer. The reassigning of responsibility of the Wild Horse and
    Burro Program from Reno, Nevada to Washington, D. C., and the
    additional three personnel will cost approximately $250,000 annually.
        The budget justifications indicate that it is BLM's goal to inspect
    a minimum of five percent of untitled wild horses and burros which have
    been adopted under the program.
        Question. Is this a sufficient goal, given the criticism and
    allegations surrounding the long-term outcome for the animals?
        Answer. One of the recommendations made in the Wild Horse and Burro
    Adoption Program Policy Analysis Team Report is to increase on-site
    compliance inspections to assure statistically that 95 percent of
    untitled animals within the last five years are being properly cared
    for. However, to accomplish this goal, an additional $1.1 million
    dollars will be needed.
        The BLM charges $125 to adopt a wild horse and $75 to adopt a
    burro. Your budget request indicates that the Department is considering
    increased adoption fees to offset the costs of the program.
        Question. What is the status of these considerations?
        Answer. In March 1997, the final rule was published in the Federal
    Register which established a minimum adoption fee for all wild horses
    and burros at $125. This new rule also allows for the competitive
    bidding of animals. We are conducting five pilot competitive fee
    adoptions in different regions of the country to evaluate different
    bidding procedures and to gauge public perception of the process.
        We have completed three of the pilots and are very pleased with the
    initial results. The public is very supportive of the competitive
    bidding fee structure, the adoptions take less time and thus cost less
    to conduct, and the average adoption fee has been above the minimum
    $125. Based on pilot events using this competitive bidding process, the
    average adoption fee for a wild horse or burro has been approximately
    $177 with some animals adopting for over $400. After conducting the
    five pilot events, BLM issued its policy in July 1997, on procedures
    for conducting a competitive bid adoption nationwide.
        Question. What other options are being considered?
        Answer. The Wild Horse and Burro Adoption Program Policy Analysis
    Team Report recommended evaluation of a security deposit each adopter
    would provide to BLM. The deposit would be returned to the adopter upon
    successfully caring for the animal for a period of one year and
    receiving title. Failure to properly care for the animal or failure to
    receive title would forfeit the deposit. We are still evaluating
    whether holding these funds would be cost beneficial to the Government.
    Implementing this recommendation would require a change to the
    regulations.
        Question. Would you need legislation?
        Answer. The recommendations from the Wild Horse and Burro Program
    Emergency Evaluation Team and the Wild Horse and Burro Adoption Program
    Policy Analysis Team were made within the parameters of the existing
    law. No new legislation is being proposed at this time.
                                     mining
        Taking out a $50,000 request for use in funding the Grand
    Staircase-Escalante Monument, the request for coal management is flat
    ($5.071 million and 78 FTEs). I note with some interest that BLM is not
    asking for any more money for its coal program.
        Question. Given the President's request for funding increases in
    all the surface programs, do the reductions in oil and gas management
    and the flat funding for coal management suggest that the President is
    turning away from energy development on public lands?
        Answer. Energy development on public lands is an important source
    of the Nation's energy supply. In preparing the budget, the
    Administration had to make difficult choices between increases and
    decreases for various programs. Other BLM programs received increases
    because the Administration believes that the needs are greater in those
    programs. We believe that adequate funds are provided to support
    exploration, development, and production of energy resources from
    public lands.
        Question. Do you believe that the public lands are capable of
    making a contribution to the Nation's energy needs? If so, how does the
    BLM budget request reflect the agency's attitude toward energy
    development on public lands?
        Answer. The BLM lands provide approximately five percent of
    domestic oil and gas production, virtually all the geothermal
    production, and about 35 percent of coal production. As stated
    previously, the budget contains adequate funds to support exploration,
    development, and production of energy resources from public lands.
        The budget assumes that royalties will be available from hardrock
    mining operations to fund reclamation of abandoned mine sites. However,
    activities to remediate contamination from hazardous substances at mine
    sites is already governed to a substantial degree by the Superfund law.
    Under that statute, Interior has the same responsibilities to
    investigate and clean up releases of hazardous materials as a private
    party.
        Question. Could you describe how you intend to have the royalties
    in the Abandoned Mine Land Fund used, and how those actions will relate
    to Superfund cleanups?
        Answer. The Administration has not proposed creation of a fund for
    reclamation of abandoned hardrock mine sites as part of the fiscal year
    1998 budget process.
        Legislation to date has limited Interior's ability to use royalties
    in the abandoned mine fund only if a hazardous substance release has
    been ``listed'' on the National Priorities List (NPL). But, as we know,
    Superfund liability attaches for a release irrespective of whether the
    site achieves NPL status. Other Federal agencies address many Superfund
    sites that are not on the NPL.
        Question. If royalties in the AML Fund are used to respond to
    releases of hazardous substances governed by Superfund, would that make
    the royalty a new category of Superfund tax, similar to what is levied
    on the petrochemical industry?
        Answer. The Administration has not proposed creation of a fund for
    reclamation of abandoned hardrock mine sites as part of the fiscal year
    1998 budget process.
                                  ward valley
        The Federal land sale for the Ward Valley site was approved by your
    predecessor in 1993. Studies were completed, more studies were ordered,
    and today, we are no closer to completing the land transfer than we
    were four years ago.
        In February 1996, Deputy Secretary Garamendi announced a second
    supplemental EIS and additional soil testing despite the California
    Department of Health Services' documentation that all the issues
    subject to the first supplemental EIS were addressed on the record. The
    State has announced it is ready to move ahead with some additional soil
    testing recommended by the National Academy of Sciences but has not had
    access to the site by your Department to conduct the tests. Instead, as
    I understand it, BLM is spending $1.7 million in fiscal year 1997 funds
    to duplicate tests that the State has said it is responsible for.
        The Department of the Interior has undertaken activities for a
    supplemental EIS, field work, testing, and analysis in relation to
    California's licensed low-level radioactive waste facility at Ward
    Valley. In responses to questions posed by a House Committee, the
    Department maintained that the funding for these activities were
    budgeted in BLM's fiscal year 1997 budget.
        Question. Where, precisely, were these funds identified in the
    fiscal year 1997 budget for a supplemental EIS at Ward Valley?
        Answer. Funding for Ward Valley and other land transfer or exchange
    proposals is contained in the Realty and Ownership Management Activity
    in the Management of Lands and Resources Appropriation and in the
    Acquisition Management Activity in the Land Acquisition Appropriation.
    However, Ward Valley is not specifically mentioned by name. Congress
    has provided BLM with the flexibility to work on the highest priority
    lands issues recognizing that they generally take several years to
    complete. Anywhere along the process issues can arise that could
    modify, delay, or terminate a realty action. If a specific lands action
    were delayed, BLM would proceed on to the next highest priority
    project.
        Question. What amount was budgeted?
        Answer. The Land and Realty Subactivity received $28.6 million and
    the Acquisition Management Activity received $2.5 million in the fiscal
    year 1997 Appropriations Act.
        Question. Can you specify the precise funding requirements for the
    supplemental EIS, field work, testing, and analysis that you
    envisioned? How could these items be budgeted and included in the
    fiscal year 1997 budget submission when the announcement of the
    supplemental EIS and additional testing was not made until February 15,
    1997?
        Answer. Costs for fiscal year 1997 as of May 1997 are listed below:

    Funding requirements for supplemental EIS, field work, testing, and
    analysis

            Work                                                   Estimated

    Prepare SEIS..................................................  $427,000
    Prepare protocol for field testing............................    63,000
    Conduct field testing (drilling for tritium)..................   870,000
    Laboratory analysis of testing materials......................   150,000
    Prepare report on field testing and laboratory analysis.......    40,000
    Independent review of laboratory analysis and report
        preparation...............................................    40,000
                        --------------------------------------------------------------
                        ____________________________________________________

          Total................................................... 1,590,000

        The announcement of the supplemental EIS and additional testing was
    made by the Deputy Secretary on February 15, 1996. The budget estimates
    were developed beginning in June of 1996 in consultation with personnel
    from BLM, the U.S. Geological Survey, Bureau of Reclamation (BOR),
    National Academy of Science, and the Interior Solicitor. The
    supplemental EIS contract was awarded on May 15, 1997.
        The scientific contracts for developing the testing protocol were
    awarded on April 21, 1997.
        The amounts required for laboratory analysis and field work are
    uncertain. The Department of Energy has received a request from the
    State of California to fund this effort. Interior is currently
    discussing with the Department of Energy and the State of California on
    how a joint testing effort might work.
        Question. Have any reprogrammings been sought for this purpose? How
    much is budgeted for these activities in fiscal year 1998 and where is
    it identified in the budget materials?
        Answer. The BLM and Department must complete arrangements with the
    State of California and the Department of Energy on funding
    responsibilities for the tritium drilling before specific decisions can
    be made on BLM funding needs and funding sources. The BLM will keep the
    Committee appraised of progress on this issue.
        The BLM has requested $29.4 million in the Land and Realty
    Subactivity in the fiscal year 1998 budget justification. Until funding
    arrangements are determined for the tritium testing it is impossible to
    know what funding requirements BLM may need for 1998.
        Question. Now that the State of California has agreed to perform
    the field testing, why is there a need for the Department of the
    Interior to seek funds for this purpose?
        Answer. In response to Governor Wilson's proposal for the State of
    California to conduct the testing unilaterally, Secretary Babbitt and
    Energy Secretary Pena outlined a joint Federal-State program on May 21,
    1997. The Departments of the Interior and Energy have held several
    meetings with the State of California. The Federal and State
    Governments are discussing how a joint tritium program would work. We
    continue to believe that a cooperative program will best serve the
    interests of both the State and Federal Governments, and will result in
    a credible test that is accurate, reliable, and objective.
        Question. Why is the Department spending additional Federal dollars
    to conduct another supplemental EIS when State documentation shows this
    is unnecessary?
        Answer. The Department is required under NEPA to prepare a
    supplemental EIS when ``there is significant new circumstances or
    information relevant to environmental concerns and bearing on the
    proposed action or its impacts; when the agency determines that the
    purposes of the Act will be furthered by doing so'' (40 CFR 1502.10
    (C)). In the May 17, 1996 Federal Register Notice of Intent, BLM
    identified nine new circumstances or information relating to the
    proposal or its impacts. During the subsequent scoping period,
    approximately 800 public comments provided further evidence of the need
    for the supplemental EIS. Such public concern is ongoing. The
    Department has also consulted with the Council for Environmental
    Quality confirming the need for a Supplemental EIS.
        If the tests are so important, then I agree they should be
    conducted.
        Question. Why aren't California's regulators being allowed to
    conduct them?
        Answer. As stated in the answer above, the Department is currently
    discussing arrangements for a joint testing program with the State of
    California. Should the State desire to undertake unilateral testing,
    however, a land use permit must be obtained from BLM. The existing
    authorizations issued to the State since 1987 do not allow new surface
    disturbance. The State of California has informed BLM that it would
    apply for such a permit but, as yet, no application has been submitted.
    Since the site where the tests would be conducted is within critical
    desert tortoise habitat, consultation with FWS would be required in
    accordance with Section 7 of the Endangered Species Act (ESA) before
    any work could be authorized.
                          fair value in land exchanges
        As you know, Mr. Secretary, the Office of Inspector General (OIG)
    of the Department of the Interior also files a budget request with this
    Subcommittee. The mission of the Office of the Inspector General is to
    detect and prevent fraud, waste and abuse, and to promote economy,
    efficiency and effectiveness in the operations and activities of
    government agencies.
        In the fiscal year 1998 budget justifications, the Inspector
    General's Office described its 1996 audits and investigations. One of
    these operations was the audit of the BLM's Nevada Office land exchange
    activities. The OIG reported that the BLM Nevada State Office did not
    consistently follow land exchange regulations or procedures and did not
    ensure that fair and equal value was received in completing three of
    the four exchanges the OIG reviewed. As a result, the BLM exchanged
    public land for 2,461 acres of private land, valued at $2.7 million,
    that ``had no discernible mission-related purpose.'' In addition, ``the
    Government may have lost revenues of $4.4 million in completing three
    of the four exchanges reviewed.
        Question. The OIG reported that BLM officials agreed with the OIG's
    findings. The description of the investigation ended there. I would
    like to know what is happening with respect to the lost revenues of
    $4.4 million?
        Answer. The BLM generally agrees with the OIG report
    recommendations but we disagree with several of the specific report
    findings. In the Audit report, the OIG recommendations outline
    opportunities for BLM to enhance our land exchange program and we are
    proceeding ahead in implementing these recommendations. However, we do
    not feel that the OIG was correct in their assessment of lost revenues.
    The majority of the claimed $4.4 million in lost revenue resulted from
    one transaction involving a parcel encumbered by a right-of-way for a
    flood control structure. We feel the value established by BLM for this
    parcel was accurate, given the information available to the BLM
    regarding the City of Las Vegas' intended use and need for the right-
    of-way. Our response to the Draft Audit Report on Nevada Land Exchange
    Activities (pages 28 through 35 of the final Audit report, issued July,
    1996) provides a more detailed discussion of the report findings.
        Question. Can you tell us why BLM acquired 2,461 private acres that
    had no mission-related purpose?
        Answer. The 2,461 acres referenced were acquired to provide habitat
    and watershed protection for the woundfin, the Virgin River chub, and
    desert tortoise (all threatened or endangered species). The 2,461 acres
    were evaluated by qualified wildlife biologists and it was determined
    that these acquisitions would benefit these species and were consistent
    with the mission of the Department and with applicable land use plans.
                           Fish and Wildlife Service
                           arid lands ecology reserve
        The Fish and Wildlife Service and the Department of Energy have
    been negotiating a Memorandum of Understanding (MOU) for management of
    the Arid Lands Ecology (ALE) Reserve at the Hanford site in Washington
    State.
        Question. What is the status of the MOU? When will the MOU be
    completed? What role will the MOU likely establish for FWS in
    management of the Reserve?
        Answer. The FWS and the Department of Energy have completed the
    Memorandum of Understanding. The FWS will have full management
    responsibility subject to continued access by the Department of Energy
    and its contractors to pursue ongoing research programs and operation
    of communication facilities. The FWS will operate the ALE in accordance
    with the present Department of Energy-approved Facility Management Plan
    and will develop its own management plan with public participation
    within 36 months. It is expected that FWS will manage the ALE as a
    Research Natural Area with emphasis on research, environmental
    education, and interpretation. Other operating functions may be
    conducted through partnerships.
        Question. Is funding available in fiscal year 1997 to complete and
    execute the MOU? Are funds built into the fiscal year 1998 budget for
    this purpose? If so, how much and within what activity? If not, how
    much would be required in fiscal year 1998, for what purposes, and in
    what budget activity/subactivity?
        Answer. Since 1971, FWS has funded its operation of Saddle Mountain
    National Wildlife Refuge and its related Hanford coordination
    activities, including initial administration of the ALE, as part of the
    Columbia National Wildlife Refuge Complex. Under the ALE MOU, the
    Department of Energy is providing $300,000 to cover the FWS management
    of the Hanford site.
                                okefenokee swamp
        I understand you recently visited the Okefenokee Swamp to announce
    your opposition to a proposed titanium mine on the border of the
    refuge. I don't know enough about the project to know whether the mine
    itself is appropriate, but it does raise a concern.
        Question. Is it possible the Administration will propose a
    Headwaters type exchange in this instance?
        Answer. The Administration does not plan a Headwaters type land
    exchange in this instance.
                                  space costs
        The budget request notes a slight increase in rental payments to
    GSA resulting from changes in rates.
        Question. How have Service rental payments to GSA changed over the
    past three fiscal years? How has the amount of actual space rented
    changed over the past three years?
        Answer. During fiscal year 1995, FWS rental payments to GSA totaled
    $25.5 million. In fiscal year 1996, the FWS's rental payments to GSA
    totaled $27.3 million. fiscal year 1997 payments to GSA are projected
    to be $27.5 million. In this three-year period, the FWS GSA rental
    costs have increased by almost $2 million or seven percent.
        In terms of the amount of space leased through GSA, the FWS fiscal
    year 1995 inventory totaled 2,099,341 square feet. Of this amount,
    993,426 square feet was designated as office space while the remaining
    1,105,915 was utilized for industrial, laboratory, and storage and
    parking purposes. In 1996, FWS leased a total of 2,177,033 square feet,
    of which 1,028,175 was office space and 1,148,858 was utilized for
    other purposes. In fiscal year 1997, FWS is leasing a total of
    2,249,531 square feet through GSA. The utilization of this space is
    broken down as follows: 1,040,271 is office space while 1,209,260 is
    used for industrial, laboratory, storage, and parking purposes.
        Over the past three years, the FWS inventory of total square
    footage has increased by 150,190 square feet. This is an overall
    increase of seven percent. The amount of office space has increased
    over this time period by 46,845 square feet or four percent, while non
    office space increased by 103,345 square feet or nine percent. These
    increases are primarily the result of increased appropriated funding
    for FWS field programs in the Pacific Northwest and Everglades. Both of
    these priority ecosystem-based initiatives have required additional
    biological staff to meet the Administration's goals.
                             endangered species act
        The Administration has requested an $11.4 million increase for FWS
    endangered species activities.
        Question. Will the Administration submit a legislative proposal to
    reauthorize the Endangered Species Act?
        Answer. The Administration is currently engaged in working
    cooperatively with the Senate Environment and Public Works Committee in
    aiding their efforts to reauthorize the Endangered Species Act. The
    Administration believes that the current ESA is an effective and
    flexible tool for maintaining biodiversity for current and future
    generations while at the same time allowing responsible economic
    development to proceed.
        Over the past several years, the Administration has designed a
    series of policies to improve the effectiveness of the ESA while
    enhancing its flexibility for businesses and private landowners. Full
    funding at the fiscal year 1998 President's Budget level of $78.8
    million for the endangered species program will allow these policies to
    continue.
        The Administration's March 6, 1995, announcement of ``Ten
    Principles For Federal Endangered Species Act Policy'' provides an
    overview of the Administration's approaches to minimize economic and
    social impacts on the economy, on private property and the affected
    public. The Ten Principles are:
        1. Base ESA decisions on sound and objective science.
        2. Minimize social and economic impacts.
        3. Provide quick, responsive answers and certainty to landowners.
        4. Treat landowners fairly and with consideration.
        5. Create incentives for landowners to conserve species.
        6. Make effective use of limited public and private resources by
    focusing on groups of species dependent on the same habitat.
        7. Prevent species from becoming endangered or threatened.
        8. Promptly recover and de-list threatened and endangered species.
        9. Promote efficiency and consistency.
        10. Provide State, tribal, and local governments with opportunities
    to play a greater role in carrying out the ESA.
        Candidate Conservation partnership efforts with Federal and State
    landowners and the private sector have been designed to avoid potential
    listings and litigation gridlock. Given the fiscal year 1998
    President's Budget request of $4.9 million for the candidate
    conservation program, FWS will be able to work on 292 actions.
        More is also being done with the use of Habitat Conservation Plans
    (HCP) to ease the regulatory burdens of the ESA on private landowners.
    The FWS estimates that it will work with 400 partners on HCPs given the
    fiscal year 1998 President's Budget request of $26.5 million for the
    consultation program thus demonstrating the flexibility of the ESA as
    it relates to the needs of private landowners. The Administration has
    produced concrete results with these HCPs. In the Pacific Northwest,
    the approved HCPs with State and private landowners cover over 4.2
    million acres in the States of Washington, Oregon, and California.
        Additional steps have been taken to provide landowners with
    certainty regarding potential future impacts of ESA actions. The ``no
    surprises'' policy assures private landowners participating in HCPs
    that no additional requirements will be imposed on plan participants
    for species covered by a properly functioning HCP.
        An HCP seeks to maintain adequate protection measures for species,
    while allowing for development activities. These plans often call for
    land protection or acquisition costs at the local level. The fiscal
    year 1998 President's Budget continues the Section 6 HCP land
    acquisition grants at $6 million to provide grants-to-States for land
    acquisition required at the local level as a result of the HCP planning
    effort.
        The ``safe harbor'' program encourages landowners to provide
    habitat for listed species. Under this program, private landowners with
    assistance from FWS or with other qualified Federal or State agencies
    develop a management program to be carried out on their lands for the
    benefit of listed species. Based on such a program, a safe harbor
    agreement is entered into by FWS and the landowner. The FWS, in turn,
    will issue the private landowner a permit for the future take of listed
    species above the existing baseline conditions at the time of the
    agreement. Over 37 agreements, mostly in the southeast and west, have
    been or are being developed. In the past year, for the Sandhill area of
    North Carolina alone, 18 non-Federal landowners have been given safe
    harbor agreements and it is anticipated that an additional 15 will be
    developed this year.
        The Administration has also developed an innovative way to avoid
    placing a significant and unnecessary regulatory restraint on thousands
    of private landowners in the Pacific Northwest hoping for 4(d) rule
    relief. Implementation of the 4(d) rule for the northern spotted owl
    would relieve certain prohibitions on private lands within the range of
    the owl. The FWS expects landowners will participate more readily in
    conservation and recovery activities because of the relief provided by
    the 4(d) rule.
        The budget justification indicates that funds for delistings and
    downlistings of species are within the Recovery activity rather than
    the Listing activity.
        Question. Does the Administration plan on delisting or downlisting
    any species in fiscal year 1998? Is the conduct of any delistings
    dependent upon the $3.8 million program increase for Recovery being
    funded? If held at the fiscal year 1997 level, would any delistings
    likely occur?
        Answer. Yes, the Administration plans to propose species for
    delisting and downlisting in fiscal year 1998. Up to 25 species will be
    evaluated for possible delisting in fiscal year 1998, provided the
    funding requested in the President's Budget is appropriated. The
    Administration strongly believes that the public is best served by
    removing species from the list of threatened and endangered species
    once recovery has been achieved. This results in a decreased cost and
    regulatory burden on the public and State and Federal agencies. To this
    end, FWS is working hard to recover as many species as possible in an
    expeditious manner. The FWS is responsible for both planning and
    implementing recovery actions for listed species, and accomplishing
    this recovery mission is contingent upon the funding in the fiscal year
    1998 President's Budget. The result of successful recovery planning and
    implementation is downlisting or delisting species. Therefore, given
    the increased recovery planning and implementation workload and the
    need to downlist and delist species, the $3.8 million increase is of
    critical importance to the FWS delisting program and to the extent to
    which FWS can engage in delisting and downlisting species in fiscal
    year 1998 is directly related to the increased funding.
        Question. Why were no delistings or downlistings performed in
    fiscal year 1997?
        Answer. Delisting and reclassification actions are currently funded
    under the ``listing'' line item in the FWS budget. Following the
    lifting of the listing moratorium in April 1996, significant program
    restart costs in terms of time and money were incurred by the listing
    program. The FWS developed listing program restart guidelines in fiscal
    year 1996 to help expedite the resulting backlog of proposed rules
    through the listing process. Due to the listing backlog FWS has at
    least twice the normal pending workload in the listing program in
    fiscal year 1997.
        Under the FWS Final Listing Priority Guidance for fiscal year 1997,
    published in the Federal Register on December 5, 1996, delisting
    activities were assigned to Tier 4, the lowest priority category for
    listing activities. The FWS assigned delistings the lowest priority
    because completing listing activities that provide protection for
    currently unprotected imperiled species is a higher priority and will
    best satisfy the intent of the Act.
        For fiscal year 1998, the delisting funding request is included
    with the recovery program budget. Because delisting is the ultimate
    goal and final step of the recovery process, the Department believes
    that it is more appropriate to include the delisting funding request
    with the recovery program.
        In order to delist a species, FWS must determine that it is no
    longer endangered or threatened based on surveys of its population
    size, recruitment, and habitat quality and quantity. The FWS is
    responsible for evaluating status survey results and coordinating
    conservation efforts with landowners and other Federal, State, and
    local agencies. Delisting and reclassification actions demonstrate the
    recovery successes of the ESA and remove regulatory burdens once they
    are no longer needed.
        Success stories, such as the reclassification of all bald eagles in
    the lower 48 States from an endangered to threatened status,
    demonstrate that there have been, and can continue to be, successes in
    endangered species recovery efforts. Several other species have
    improved in status to the point where they now near reclassification or
    delisting, such as the American peregrine falcon. The fiscal year 1998
    President's Budget requests $42.2 million for the recovery program,
    including an increase of $3.8 million. Part of this increase will be of
    critical importance to the delisting program.
        The budget justification states that no critical habitat
    designations will be made in fiscal year 1998 because this activity is
    a lower priority than responding to listing petitions.
        Question. Absent the designation of critical habitat, at what stage
    of the Endangered Species Act process are economic considerations
    formally taken into account?
        Answer. Species are listed under the ESA solely on the basis of the
    best scientific and commercial data available regarding the status of
    the species. However, economic effects can and should be taken into
    consideration in the planning and implementation of recovery
    activities. The current ESA provides flexibility with regard to
    recovery, and various policies recently implemented by the
    Administration, as well as increasing the role of stakeholders in
    recovery and focusing of Federal lands, will decrease the burden on
    private lands and work towards minimizing the economic effects of the
    ESA on private landowners.
        A new policy--part of the Administration's Ten Point Plan for ESA
    reform--significantly expanded recovery participation beginning in July
    1994. That policy directs that local jurisdictions, private
    organizations, and affected citizens be included in recovery plan
    development and implementation. Also, the public is invited to comment
    on draft recovery plans. These comments can supply important
    information about an affected community and can help to reduce or
    eliminate conflicts with listed species and their habitats. All
    comments are reviewed and addressed--if appropriate--in the final plan.
        The justification indicates FWS will ``significantly reduce its
    outstanding obligation'' under the settlement agreement in Fund For
    Animals v. Babbitt.
        Question. Given that FWS must cope with limited resources, does the
    Service feel its own listing petition management and priority system
    has been superseded or overwhelmed by lawsuits and settlement
    agreements such as the Fund For Animals? Does FWS manage its Listing
    workload according to national priorities that reflect threats to
    individual species, or is it forced to manage on the basis of the most
    recent court decision or lawsuit?
        Answer. Following the lifting of the listing moratorium and the
    restoration of listing funding in April 1996, significant program
    restart costs in terms of time and money were incurred by the FWS
    listing program. The FWS developed listing program restart guidelines
    to help expedite the resulting backlog of proposed rules through the
    listing process. The FWS was not able to finish the backlog during
    fiscal year 1996 using this triage approach and had at least twice the
    normal pending workload in the listing program in fiscal year 1997. To
    continue to address the backlog, FWS issued the Final Listing Priority
    Guidance for fiscal year 1997, published in the Federal Register on
    December 5, 1996. The Department is rigorously following this guidance
    to fairly and adequately address the backlog.
        Under the priority system, resources are apportioned among the
    following actions:
      --Emergency Listing Actions; and
      --Processing Final Decisions on Proposed Listings.
        Resolving the conservation status of candidate species and
    processing administrative findings to add species or reclassify
    threatened species to endangered
        Action on processing critical habitat determinations, is deferred
    because of the higher priority on resolving listing issues.
        The FWS fiscal year 1998 budget request proposes $78.8 million to
    support a workable Endangered Species program. This balanced request
    will address a variety of needs. The $4.9 million requested for the
    candidate conservation program will support 292 partnership efforts to
    keep species off the list. The listing program is funded at $5.2
    million to respond to petitions and answer legal challenges. To support
    full participation in Section 7 and Section 10 consultations, $26.5
    million is requested. This will provide for 900 formal consultations,
    1500 programmatic consultations, and 38,000 technical assistance
    consultations, as well as work on over 400 new and existing HCPs. With
    the $42.2 million request for the recovery program, FWS will be able to
    meet the growing workload demands and to help address the backlog of
    400 species without recovery plans. Delisting and reclassification
    actions previously funded in the listing activity would be funded at
    $500,000 within the recovery program.
        With the requested fiscal year 1998 listing program amount, the
    Department will continue to make progress in processing listings in
    accordance with the priority guidance. During fiscal year 1998, FWS
    anticipates that nearly 100 species will be proposed for listing and
    approximately 120 species will be added to the list. However, FWS does
    not anticipate designating critical habitat in fiscal year 1998, as
    this activity is a lower priority than responding to petitions and
    resolving the status of candidate species.
        The House Appropriations Committee has approved language to
    accompany the fiscal year 1998 appropriation for listing activities
    specifically restricting FWS from spending more than the allocated
    amount on the listing program. This language reads as follows: ``And of
    which not to exceed $5,190,000 shall be used for implementing
    subsections (a), (b), (c), and (e) of the Endangered Species Act of
    1973, as amended.''
        Together with the listing priority guidance, the appropriations
    language will put FWS in a better position to make listing decisions
    based on the best available scientific information, and not necessarily
    in response simply to litigation.
        Question. How much does FWS and the Department of Justice spend
    annually on ESA-related litigation?
        Answer. Our estimate reflects FWS and the Department of the
    Interior's Solicitor's Office costs only. The FWS costs are
    approximately $0.3 million and relate to document research and
    preparation, records assembly, and conferences with attorneys. The
    Solicitor's costs are approximately $0.9 million and assume a net of 12
    FTEs (at $75,000 each). Figures from the Department of Justice will be
    provided under separate cover.
        The budget justification indicates that FWS's Section 7 workload is
    steadily rising.
        Question. To what does FWS attribute this continued increase? At
    what point does FWS expect workload to level off? To what extent is
    increased use of programmatic consultations and Habitat Conservation
    Plans reducing funding requirements for the Consultation activity?
        Answer. The demand from Federal agencies for Section 7
    consultations, especially wide-ranging programmatic consultations, has
    greatly increased the FWS workload. As more species are listed, and as
    Federal agencies increasingly recognize their responsibilities in
    endangered species protection, the number and complexity of informal
    and formal consultations requested under Section 7 has increased
    significantly. This increase has been most dramatic in the southwest,
    southeast, and northwest regions of the United States. To support full
    participation in Section 7 and Section 10 consultations, $26.5 million
    is requested in the President's Budget which is critically important to
    ensure that FWS is able to issue accurate and timely biological
    opinions to other Federal agencies as required by Section 7, to
    maximize opportunities for the identification and informal resolution
    of potential conflicts in early project planning stages for both
    Federal (Section 7) and private (Section 10) actions, and to provide
    technical assistance to both Federal and non-Federal entities for the
    preparation of necessary compliance measures under both Sections 7 and
    10 as early in the planning process as possible.
        In addition, FWS is responsible for monitoring both the
    implementation and effectiveness of any measures required by
    consultations to minimize the take of listed species. As the number of
    formal consultations increase, the need to monitor compliance also
    increases. The increased popularity of HCPs, (Section 10(a)(1)(B) of
    the ESA) as a tool to resolve conservation and development conflicts on
    private lands has also resulted in an increased Section 7 workload
    because FWS must conduct an intra-FWS Section 7 consultation on the
    issuance of each Section 10 permit. As more species are listed, and as
    economic growth continues, the need for HCPs to address non-Federal
    actions on private lands will increase resulting in an increase in
    intra-FWS Section 7 consultations.
        The FWS expects the demand for consultations to continue to
    increase as Federal agencies continue to realize the need to consult,
    as the number of listed species continues to increase, and the
    continued increase in economic growth. However, FWS is taking every
    step to ensure that the consultation program is as effective and
    efficient as possible. To that end, FWS is finalizing a Section 7
    handbook that emphasizes efficiency in the implementation of the
    program. Additionally, we have developed streamlined consultation
    procedures for the implementation of the Pacific Northwest Forest Plan.
    These procedures serve as a model to develop and implement similar
    procedures in other parts of the country to further enhance our
    implementation efficiency.
        The FWS continues to be involved in many national, programmatic
    consultations on issues such as the EPA's registration of Department of
    Agriculture pesticides and pest control programs. The FWS anticipates
    that consultation on these and other national programs will continue in
    fiscal year 1998. Programmatic consultations tend to take longer to
    complete, but are often more effective and efficient in the long run
    because they allow FWS to address multiple actions affecting multiple
    species all at once, instead of several consultations on the same
    issue. The FWS believes that both Section 7 and Section 10
    consultations are equally important, and will need the increased
    funding requested in the President's Budget to address the workload
    associated with both types of consultations.
        A portion of the increase requested for Consultation is for Forest
    Plan activities.
        Question. How much Forest Plan funding is being allocated in fiscal
    year 1997 to Eastside ecosystem management? How much would be allocated
    for this purpose at the fiscal year 1998 request level? Why is this
    work included in the Forest Plan activity?
        Answer. The FWS has allocated $250,000 in fiscal year 1997 for
    participation in developing EISs to launch the Interior Columbia Basin
    Ecosystem Management Project (ICBEMP). The draft EISs were released for
    public comment in May 1997. The purpose of the ICBEMP is to restore and
    maintain long-term ecosystem health and integrity and to support the
    economic and social needs of communities by providing sustainable and
    predictable levels of products from Federal lands managed by the Forest
    Service and BLM. It is also the objective of the ICBEMP that no species
    would need to be listed under the ESA because of management actions of
    the Forest Service or BLM within the Columbia River Basin. Therefore,
    the participation of FWS along with the National Marine Fisheries
    Service was crucial in the development of the ICBEMP.
        Final EIS and Record of Decision (ROD) are planned for the third
    quarter of fiscal year 1998, with ICBEMP implementation to begin in the
    final quarter. The President's Budget requests an increase of $1.3
    million for Forest Plan consultations; approximately half of this
    funding increase would be allocated for the implementation of ICBEMP.
    Funding for the implementation of the Eastside EISs in the fiscal year
    1998 budget reflects the fact that the FWS expertise in these
    activities in the Pacific Region is in the Forest Plan program.
    Additional funding is critically needed for: 1) the FWS participation
    in the Ecosystem Analyses that are to be undertaken on Federal lands as
    a basis for future ICBEMP decision making; 2) the development of an
    HCP/Conservation Agreement capability to enable our non-Federal
    partners to pursue voluntary conservation agreements; and 3) required
    ESA Section 7 consultations on sharply increasing Forest Service and
    BLM activities associated with ICBEMP implementation. In the future as
    the ICBEMP program grows in importance, these funds will be displayed
    separately.
                             partners for wildlife
        The justification seems to indicate that proposed fiscal year 1998
    funding for the Partners for Wildlife program will continue the Klamath
    River Basin program, Nevada biodiversity research, and the Washington
    State Ecosystems Conservation project at the fiscal year 1997 level.
        Question. Is this accurate?
        Answer. Yes, the FWS fiscal year 1998 budget requests $1.7 million
    for the Klamath River Basin Restoration, $1.0 million for the Reno
    Biodiversity Initiative project in Nevada, and $1.5 million for the
    Washington State Ecosystem Conservation project, which is the same
    level as 1997.
        The justification indicates that the Nevada program will be
    completed in fiscal year 1998.
        Question. Are Partners for Wildlife funds for this program expected
    to be requested in fiscal year 1999? Will funding for follow-on
    activities be requested in other FWS activities?
        Answer. This initiative is an intergovernmental effort to assemble,
    analyze, and interpret data on the biological resources of Nevada. The
    University of Nevada at Reno, Stanford University, Nevada Division of
    Wildlife and the Nevada Natural Heritage Program work cooperatively
    with FWS, USGS Biological Resources Division, and the Forest Service to
    collect data and provide it in a usable format to agencies vested with
    the statutory responsibility to manage Nevada Public Lands. The
    initiative provides land management agencies with a planning tool, and
    a forum where they may discuss how they may coordinate their agendas in
    a way that best serves Nevada biodiversity. In addition, cooperators
    are developing a GIS system that would link University of Nevada, BLM,
    FWS, Forest Service, and Gap Analysis Systems, processing sensitive
    species occurrence data, and enhancing quality control procedures at
    the Nevada Natural Heritage Program. The FWS will consider the need for
    continued Federal assistance as it develops future budget priorities.
        The FWS is requesting an increase of $750,000 in Project Planning
    to accommodate work related to the relicensing of hydroelectric
    projects. The justification indicates that FWS will use the increase to
    ``design, test, and prescribe technically sound fishways * * *.''
        Question. Does FWS currently have the type of resident expertise
    required to design and test fishways? Does FWS intend to establish or
    expand its resident design capabilities in this area? Wouldn't it be
    more cost-effective for FWS to focus on analysis and testing of fishway
    designs proposed by license applicants?
        Answer. When an applicant submits a fishway design, FWS must
    conduct a thorough biological, hydrological, and engineering analysis.
    It is imperative that the fishway fulfill the biological needs of fish,
    and function properly in a wide variety of river flow and environmental
    conditions when installed onsite. Often, trial field testing and
    modifications are in order to ensure fish will readily use and pass
    uninjured through the fishway.
        The FWS does not have facilities to test fishways, and does not
    propose to duplicate test facilities available with the USGS Biological
    Resources Division. The most cost-effective method is to focus our
    resources on analyzing the applicants' fishway designs. The $750,000
    requested in the President's Budget would help FWS modestly upgrade
    resident engineering and biological expertise needed to complete
    technical reviews of proposed fishway designs and participate more
    fully in trial testing with license applicants. With the requested
    funds, FWS can also improve customer FWS to Federal Energy Regulatory
    Commission license applicants by providing timely prescriptions for
    fish passage facilities that are biologically and technically sound,
    cost-effective, and reliable.
        Question. How much funding will be allocated to FERC-related work
    in fiscal year 1997?
        Answer. In fiscal year 1997, FWS estimates spending about $2.9
    million on all hydropower licensing activities, and will participate
    fully in the review of about one-third of the 231 projects currently
    pending relicensing, as well as all of the other actions above.
        During fiscal year 1998, FWS estimates that 100 additional license
    renewals will be initiated by applicants. To meet this increased
    workload, the fiscal year 1998 budget includes a request for an
    additional $0.75 million to allow FWS to develop non-regulatory
    partnership solutions by working upfront on 50 new FERC relicensing
    actions. Relicensing actions provide opportunities to mitigate for
    previous fish and wildlife impacts by improving instream flows,
    providing for fish passage, and creating or improving habitat.
        The FWS role in the hydropower licensing process is authorized by
    statute and the FERC regulations. The FWS participates by advising and
    assisting developers in preparation of study plans, developing terms
    and conditions, coordinating with other agencies, preparing mitigation
    plans, and participating in fishway, instream flow, and other studies.
    Relicensing activities are increasing nationwide as licenses for many
    hydropower projects expire. Since 1993, the licenses for over 260 dams
    across the country have expired. The licenses for over 550 more dams
    will expire in the next 15 years. Many of these dams were built without
    the benefit of fishways, instream flows, and other measures to conserve
    and protect fish and wildlife.
        Current workload is significant. During fiscal year 1998, FWS will
    work on almost 1,100 hydropower projects nationwide, including:

                                                   HYDROPOWER PROJECTS
    ----------------------------------------------------------------------------------------------------------------
                                                                                       Fiscal year--
                                                                     -----------------------------------------------
                                                                           1996            1997            1998
    ----------------------------------------------------------------------------------------------------------------
    Prelicensing actions:
        Preliminary permits.........................................             150             140             130
        Original licenses...........................................             150             130             130
        Relicensing.................................................             160             200          \1\230
        Exemptions..................................................              30              40              40
    Postlicensing actions:
        Licenses....................................................             350             450             500
        Exemptions..................................................              50              50              50
                                                                     -----------------------------------------------
          Totals....................................................             890           1,010           1,080
    ----------------------------------------------------------------------------------------------------------------
    \1\ ``Rolling number'' includes 50 of the estimated new applications.

                          national wetlands inventory
        The justification indicates that FWS is continuing to seek
    alternative data collection techniques that may lower the cost of data
    collection per unit.
        Question. What progress has been made in this regard in recent
    fiscal years? What prospects are there for further improvement? Has the
    level of cooperation from other agencies been satisfactory?
        Answer. The FWS has made considerable progress in recent years in
    working with its partners to determine alternative data collection
    techniques in order to lower costs in wetland mapping and collecting
    wetland status and trends data. These efforts are:
      --(1) Collaboration with EPA and the Natural Resources Conservation
            Service on refining a cross-correlation technique. This
            technique uses satellite imagery to monitor wetland changes in
            the 30 percent of National Wetland Inventory maps that have
            been digitized and are components of the wetlands layer of the
            National Spatial Data Infrastructure.
      --(2) Work with the Central Intelligence Agency (CIA) and BLM on use
            of recently declassified imagery to map wetlands and other
            natural resources in remote regions of Alaska lacking existing
            aerial photography.
      --(3) Refinement of the techniques involved with Analytical Stereo
            Plotters and Global Positioning System satellites for
            applications in mapping wetlands on military facilities and for
            updating wetland status and trends plots.
        Improved efficiency and lowered costs are probable with all three
    methods. The only drawback is the scale limitation imposed by most
    conventional satellite imagery. However, the declassified CIA imagery
    may solve that problem. The level of cooperation among agencies
    continues to be congenial and productive.
                                  maintenance
        The budget request includes a $9.75 million programmatic increase
    for Refuge Operations and Maintenance, which follows an $8 million
    increase in fiscal year 1997.
        Question. If funded at the request level, would the maintenance
    backlog in the refuge systems be reduced? If so, by how much? If not,
    why not?
        Answer. The budget includes a three-tiered effort to address the
    highest priority operational and maintenance needs of the Nation's 509
    National Wildlife Refuges. First, operational increases total $13.8
    million, or eight percent (including $4.1 million for pay and FERS
    retirement cost increases). Second, the budget continues the recreation
    fee demonstration program which will initially generate approximately
    $1.0 million for on-the-ground project work at the refuges which
    collect the user fees. Third, construction funding totaling $22.2
    million will be used for the highest priority infrastructure backlog
    needs including the rehabilitation of roads, dams and bridges; as well
    as $17.1 million in ongoing operations funding for routine maintenance.
    The $17.1 million plus the $22.2 million in the construction account
    will address the highest priority needs identified in the Maintenance
    Management System.
        The first increment of the operations increase is $9.8 million to
    protect wildlife, improve habitat, enhance recreation and education,
    and to accelerate comprehensive planning. The new Refuge Management
    Information System (RMIS) database was used to systematically rank
    priorities against nationwide goals to ensure project integrity and to
    compile a project list tied to the $9.8 million increase.
        The additional funding requested for habitat enhancement will be
    used to restore natural water flows and replant trees and prairie
    grasses. This funding will reverse the damaging effects of previous
    land uses which often include drainage, tree clearing, and elimination
    of native grasses. Restoring habitats now will ensure healthy and
    diverse ecosystems; ensure sustainable populations of fisheries and
    wildlife; and provide habitat for Threatened and Endangered (T&E)
    species. Implementation of wildlife dependent recreation and education
    projects will provide additional opportunities to the 29 million annual
    refuge visitors. Funding will also allow additional comprehensive
    management plans to be completed and guide future management of the
    refuge system.
        The second increment of the operations increase is $4.1 million to
    fully fund required pay and FERS retirement system costs for the
    approximately 2,800 employees of the refuge system.
                                law enforcement
        Question. The table on page 105 of the justification indicates that
    the number of shipments inspected in fiscal year 1996 fell dramatically
    from the number inspected in fiscal year 1995. Why?
        Answer. At the time the fiscal year 1998 budget was prepared, FWS
    had only preliminary information on shipments through July 24, 1996.
    The total shipments for fiscal year 1996 are 87,848. The shipments
    increased by 2,190 over the previous year.
                           migratory bird management
        A $1.5 million increase is requested for migratory bird management.
        Question. To what extent are activities that would be funded with
    this increase, particularly the increase for ``Species of Management
    Concern,'' activities that might otherwise be conducted with Endangered
    Species Candidate Conservation or Listing funds? How does FWS determine
    which accounts to draw upon for bird population monitoring activities?
    Are activities that will be conducted with funds identified for
    ``Implement[ing] Conservation Actions'' similar to or the same as
    activities that will be funded with Candidate Conservation funds?
        Answer. Of the $1.5 million increase requested for migratory bird
    management, $600,000 is targeted for ``Species of Management Concern''
    to implement those provisions of the Fish and Wildlife Conservation Act
    of 1980, as amended, that direct the FWS to ``identify species,
    subspecies, and populations of all migratory nongame birds that--are
    likely to become candidates for listing under the Endangered Species
    Act of 1973'' and to undertake appropriate conservation actions. We
    anticipate that fewer than one percent of the ``species of management
    concern'' will also be candidate species in fiscal year 1999.
        Migratory bird populations may also be monitored in conjunction
    with activities in the Candidate Conservation and Listing programs.
    These surveys are focused on specific threatened and endangered
    species, primarily to gather data needed for decisions on regulatory
    actions.
        The planned surveys on ``species of management concern''
    concentrate on species that are not on the threatened and endangered
    species list. The monitoring information helps FWS and its partners to
    take actions to avoid future imperilment and listing of species of
    concern.
        No increase is requested for the North American Waterfowl
    Management Plan (NAWMP).
        Question. How many wetlands joint ventures currently exist? At what
    level are each of these joint ventures funded in fiscal year 1997? In
    the fiscal year 1998 request? How much of an increase would be required
    to provide currently unfunded joint ventures with a level of support
    comparable to funded joint ventures? Would such an increase enable
    currently unfunded joint ventures to coordinate a significant amount of
    additional wetlands restoration projects?
        Answer. Currently, 10 wetlands habitat joint ventures exist in the
    U.S. as part of the North American Waterfowl Management Plan. Of these,
    the six original joint ventures are funded through the FWS Regions. The
    table below presents the fiscal year 1997 allocation to each FWS Region
    in support of coordination activities for the original joint ventures
    (Atlantic Coast, Central Valley Habitat, Gulf Coast, Lower Mississippi
    Valley, Playa Lakes, and Prairie Pothole Joint Ventures). The table
    identifies funded and unfunded joint ventures in each Region and
    indicates the Region with lead coordination responsibility for each
    joint venture.

     FISCAL YEAR 1997 REGIONAL ALLOCATION TO SUPPORT ORIGINAL NAWMP HABITAT
                                 JOINT VENTURES
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                              Joint ventures--
      FWS  ----------------------------------------------------- Allocations
    region            Funded                   Unfunded
    ------------------------------------------------------------------------
         1Central Valley habitat     Pacific Coast \1\,               275
           \1\                        Intermountain West.
         2Gulf Coast \1\, Playa      Intermountain West......         314
           Lakes \1\, Lower
           Mississippi Valley
         3Prairie Pothole, Lower     Upper Mississippi River/         357
           Mississippi Valley         Great Lakes Region \1\.
         4Lower Mississippi Valley   ........................         366
           \1\, Atlantic Coast,
           Gulf Coast
         5Atlantic Coast \1\         ........................         266
         6Prairie Pothole \1\,       Rainwater Basin \1\,             713
           Playa Lakes                Intermountain West \1\.
    ------------------------------------------------------------------------
          \1\ Joint ventures indicate regional lead coordination
            responsibility.

        The fiscal year 1998 President's Budget does not include an
    increase in funding for the North American Waterfowl Management Plan.
    Allocations to the Regions to support coordination of the six original
    joint ventures would remain essentially the same under the fiscal year
    1998 budget request. If appropriated, an additional $800,000 would fund
    the remaining joint ventures with a level of support comparable to that
    provided to the original six joint ventures in fiscal year 1997.
                      hatchery operations and maintenance
        In the fiscal year 1996 budget request, the Administration proposed
    to close or transfer to States 11 fish hatcheries.
        Question. To date, how many of these hatcheries have been
    transferred to States? What is the status of the remaining hatcheries,
    both with regard to fish production and any continuing discussions
    regarding transfer to the host States?
        Answer. Five hatcheries have been transferred to the States: three
    in fiscal year 1996 (Walhalla NFH, SC, to SC; Carbon Hill NFH, AL, to
    AL.; and Bo Ginn NFH, GA, to GA) and two in fiscal year 1997 (McKinney
    Lake NFH, NC, to NC; and Meridian NFH, MS, to MS). Transfer talks have
    been completed with the State of West Virginia for the transfer of
    Bowden NFH, WV, under a MOA that will take effect on July 1, 1997.
        Production at three of the hatcheries not transferred to the States
    (Chattahoochee Forest NFH, GA; Wolf Creek NFH, KY; Inks Dam, NFH, TX)
    will be redirected into high priority Federal Fisheries activities
    (i.e., providing fish to mitigate for the adverse effects of Federal
    water development projects, restoration of imperiled
    interjurisdictional fisheries, and recovery of T&E species). Because
    Mescalero NFH, NM, meets the needs of the Native American Pueblos in
    New Mexico, consistent with the FWS tribal trust responsibility,
    production at the hatchery will not be redirected.
        Valley City NFH, ND was originally proposed for transfer/closure in
    the President's fiscal year 1996 Budget. However, after a subsequent
    review of the hatchery's role, the hatchery was withdrawn and is no
    longer considered for transfer/closure.
        The FWS will continue to pursue State initiated transfer requests
    for Chattahoochee Forest, Wolf Creek, or Inks Dam, and offer the three
    year transition opportunity, through fiscal year 1997.
        Question. What savings from hatchery transfers, production cuts or
    closures will be realized in fiscal year 1997 for use in other
    fisheries programs? In fiscal year 1998?
        Answer. The total base funding of the 10 hatcheries of concern was
    approximately $2.37 million annually. As hatchery transfers proceed
    over the three year period that began in fiscal year 1996, an
    increasing portion of this base funding has been freed-up and
    redirected to meet high priority Federal fishery responsibilities. This
    freed-up funding is $655,000 for fiscal year 1996, $1.2 million for
    fiscal year 1997, and $1.5 million in fiscal year 1998.
        The savings from hatchery transfers have been reinvested into the
    fisheries program in an effort to restore the FWS ability to meet high
    priority Federal responsibilities. Had FWS not done this, the Fisheries
    program would have continued to fall substantially short of fulfilling
    its core responsibilities. The $1.46 million in savings is being
    redirected into: mitigation ($232,000), restoration efforts ($899,000),
    and threatened and endangered species recovery ($44,000). Transfer/
    administrative costs ($282,000) will also be covered out of realized
    savings.
        Page 131 of the justification indicates that Hatchery O&M funds
    will be used to replace inadequate backup water supply systems at
    Dexter National Fish Hatchery.
        Question. How old are the systems that are being replaced? Why were
    these systems inadequate?
        Answer. The current backup systems are over 20 years old and rely
    on water from distant wells being redirected to rearing units where the
    water supply has failed. Because of the need to manually switch valves,
    water to some fish tanks has been disrupted for an hour before backup
    water arrives. This has led to the loss of endangered fish, most
    recently the loss of razorback suckers involved in a broodstock
    development program. A new backup system would provide an immediate
    water reserve through a 50,000 gallon water tower, with water supply
    redirection accomplished using automatic controls. The threatened and
    endangered fish species maintained at Dexter NFH and Tech Center are
    too valuable to be exposed to the risk of the current backup system.
        Over the past several years, the Pacific Northwest has been
    grappling with the issue of salmon recovery. The FWS hatchery system
    plays an important role in this process.
        Question. How have operations at salmon and steelhead hatcheries in
    the Pacific Northwest changed in response to ongoing salmon recovery
    efforts? Have funding requirements for individual hatcheries changed
    significantly? Have funding requirements for the FWS Northwest hatchery
    system changed significantly?
        Answer. In recent years, conservation needs for hatchery and wild
    salmon and steelhead stocks in the Pacific Northwest have become
    increasingly acute. Marine and freshwater conditions have been
    extremely poor in most areas. Habitat, hydropower, harvest, and
    hatchery issues also have received considerable attention. Resource
    managers have responded in a number of ways to ensure that healthy
    productive hatchery and wild salmonoid populations can be recovered,
    restored, and maintained to support sustainable fisheries and other
    important ecological and social values for future generations. The FWS,
    along with its other partners, are committed to a comprehensive
    conservation strategy for salmon and steelhead that has many
    complementary components (supplementation, mass marking, improved
    genetics, improved fish health, captive broodstock, comprehensive
    evaluation, etc.).
        The primary responsibility of FWS hatcheries is to meet the
    restoration/mitigation production and trust resources goals for which
    they were established. Production from these facilities directly
    supports recovery plans/objectives, legislative and judicial mandates,
    and Executive Orders. In order to meet these responsibilities,
    mandates, and goals, FWS must continue to meet hatchery production
    requirements with quality fish in an environmentally sound manner. In
    addition, the FWS hatcheries, fish health centers, and fish and
    wildlife offices must continue to expand their evaluation and
    monitoring programs to maintain production efficiency and assure that
    the genetic integrity, diversity, and fitness of hatchery stocks are
    sustained.
        In response to ongoing recovery efforts, and activities designed to
    preclude species listing, FWS hatcheries and supporting offices have
    initiated many of the following actions:
        1. Develop captive broodstock (maximize effective population size
    and genotypes).
        2. Initiate new broodstock development techniques (improve mating
    protocol, reduce effects of inbreeding, maximize biodiversity, increase
    effective population size, incorporate wild stocks, etc.).
        3. Increase hatchery evaluation and assessment.
        4. Mark additional hatchery fish to assess impacts between hatchery
    and wild populations.
        5. Utilize hatchery stocks for supplementation activities where
    wild stocks have been extirpated.
        6. Restrict locations of hatchery fish releases to reduce impacts
    on wild stock (do not release on top of emerging native fry).
        7. Adjust operational practices to produce hatchery fish which are
    released at the size and time that reduces impacts to wild stocks and
    eliminates competition and displacement of wild populations.
        8. Produce salmon and steelhead smolts that are ready to migrate
    immediately upon release.
        9. Improve fish health and increase disease diagnosis and
    monitoring of hatchery populations (reduce disease impacts of hatchery
    outplants).
        10. Increase fish health monitoring of wild stocks. 11. Mark
    additional hatchery stocks to address harvest management concerns.
        The FWS National Fish Hatcheries and supporting Fish Health
    Centers, Fish and Wildlife Offices, and Fish Technology Center have to
    establish annual funding priorities to meet the growing demands for
    evaluation and monitoring programs that maintain production efficiency
    and assure that the health, genetic integrity, diversity, and fitness
    of hatchery stocks are sustained. Mass marking of hatchery releases is
    also becoming increasingly important.
                         cooperative endangered species
        In fiscal year 1997, the Department for the first time received
    funds for a land acquisition grants to States program.
        Question. How are funds allocated under this program? Has the
    Department established grant criteria for this program? Have such
    criteria been published?
        Answer. The HCP Land Acquisition Grants to States program provides
    grants for land acquisition at the local level for approved HCPs. The
    Department considers the States' use of Federal acquisition dollars for
    habitat protection within, and adjacent to, HCP areas to be an
    important and effective mechanism to promote the recovery of threatened
    and endangered species. These acquisition and land exchanges
    complement, not supplant, private and/or local government
    responsibilities required for mitigation related to implementing HCPs.
    Of the $6.0 million available for the program for fiscal year 1997,
    $2.75 million has been allocated as follows:
      --Balcones Canyonlands HCP, Texas ($1.0 million): The BCCP is a
            regional HCP that protects 35 listed and candidate species,
            including the golden-cheeked warbler, black-capped vireo, and
            six invertebrates, among others.
      --Orange County Coastal Central HCP, California ($0.5 million): This
            HCP covers the California gnatcatcher, peregrine falcon,
            southwestern willow flycatcher, and 34 other rare species.
      --Volusia County HCP, Florida ($0.5 million): This plan protects
            three species of nesting sea turtles as well as piping plovers.
      --Washington County HCP, Utah ($0.75 million): This HCP covers 34
            listed and candidate species, including the desert tortoise,
            peregrine falcon, and bald eagle.
        The remainder of the funds will be allocated later this year as FWS
    continues to evaluate project proposals. The fiscal year 1998
    President's Budget continues this program at the $6.0 million level.
                             National Park Service
                                special use fees
        In a 1995 audit report, the OIG concluded that the National Park
    Service ``did not implement its authority to collect and retain fees
    for special park uses in a consistent manner. This occurred because the
    Park Service has not completed its efforts to revise the existing
    guidance (NPS-53, ``Special Park Uses'') to address the changes created
    by the Appropriations Acts of 1991, 1992, 1993, and 1994 * * *.''
        Question. Has NPS revised its guidelines for collection of special
    use fees subsequent to the OIG's report? If not, why not?
        Answer. The NPS has a draft revision that is out for review.
        Question. Does NPS intend to make such revisions? When, and through
    what process?
        Answer. Yes, after the review is completed, the guidelines will be
    finalized and sent to the field. The NPS expects to complete this by
    late fall or early winter of 1997.
                                  grand canyon
        Non-commercial boaters have expressed concern about the level of
    fees that have been levied on their activities in Grand Canyon National
    Park.
        Question. What fees are currently charged for these activities?
        Answer. Individuals participating in noncommercial river use within
    Grand Canyon National Park currently pay a $100 Permit Application Fee,
    a $25 Annual Renewal Fee (to maintain their position on the Permit
    Waiting List), a $200 Launch Fee, and a $4 per night/per person
    Backcountry Impact Fee. These fees are in addition to the $10 per
    person Park Entrance Fee. This fee program has been specifically
    designed to spread the costs to the users over the life of the
    relationship between the permittee and NPS, which averages nine years.
    Payment is made as services are rendered. Taking all of these fees
    together, split among the average number of participants in a
    noncommercial Grand Canyon river trip, the average cost is $100 per
    person for all services rendered, preservation of the resource, and the
    opportunity to participate in this world class river experience.
        Question. How do the fees compare to the estimated cost to the Park
    Service of managing such activities?
        Answer. The cost recovery component of this fee program is designed
    to achieve 95 percent recovery of direct NPS costs associated with
    managing noncommercial river use in the park, in compliance with the
    law and OMB Circular A-25.
        Question. If the fees are in excess of the costs of managing the
    activity, why?
        Answer. The $4 per night/per person Backcountry Impact Fee is being
    collected as part of the new Recreation Fee Demonstration Program. As
    such, this new fee does generate revenue above and beyond the amount
    necessary to cover current operational costs. In compliance with the
    legislation authorizing the Recreation Fee Demonstration Program, this
    revenue will be used to address a large backlog of resource related
    projects in the backcountry and the river corridor. These funds will
    only be used for projects directed at the prevention, monitoring, and
    rehabilitation of impacts caused by backcountry and river use.
        Question. Are any of the fees assessed on this activity part of the
    recreation fee demonstration program?
        Answer. As described above, the $4 per night/per person Backcountry
    Impact Fee is being collected as part of the new Recreation Fee
    Demonstration program.
                          presidio and presidio trust
        I recently had the opportunity to visit the Presidio in San
    Francisco. While impressed by the beauty of the property, I am perhaps
    more convinced than ever that the Presidio would more appropriately be
    managed as a city or local park. Nevertheless, we have passed
    legislation establishing the Presidio as a national park to be managed
    by the Presidio Trust. My principal concern is now how to pay for the
    operation of this very expensive park.
        The fiscal year 1998 budget request for the Presidio is $24.6
    million dollars. This same amount was approved for fiscal year 1997. On
    April 18, 1997, the Secretary announced selections for the Board of
    Directors of the Presidio Trust.
        Question. What activities will occur during fiscal year 1997 by the
    Board of Directors to move forward with plans to designate sites within
    the Presidio which will be managed by the Board?
        Answer. The NPS expects that through the summer and fall of 1997,
    NPS and the Presidio Trust's Board of Directors will organize the
    transition of responsibilities between NPS and the Trust. Orientation
    provided by NPS will help familiarize Board members with the Presidio,
    their responsibilities as Board members, and the first year's
    requirements as outlined in P. L. 104-333. Once this is accomplished
    the Board can then move forward in designating sites within the
    Presidio they will manage and develop the appropriate plans to guide
    future management decisions.
        Question. Has the agency developed plans and alternatives for
    consideration by the Board?
        Answer. The NPS is developing plans and alternatives to transition
    responsibilities from NPS to the Trust. However, actual decisions
    regarding administration of the Presidio areas managed by the Trust
    rest with the Board.
        Question. Does the agency have estimates of what the long-term
    operations costs will be for those sites not selected by the Board to
    be operated by the Trust?
        Answer. The NPS has not developed long-term operational costs for
    non-selected sites.
        Question. Does the agency have estimates for the potential ``seed''
    money necessary to restore specific sites which may be designated by
    the Board?
        Answer. The Presidio Trust plans to hold its first meeting in early
    July, 1997. As part of the planning process, it is expected that the
    Trust will develop estimates of funds needed to redevelop the Presidio.
        Question. In your mind, how long should it take for the Presidio to
    generate sufficient revenues to finance its own operation?
        Answer. The authorizing legislation requires the Board to present a
    financial plan within a year of the their first meeting, which is
    expected to occur in July, 1997. The financial plan will review
    Presidio leasable space, current market conditions, trust financing
    authorities, and related factors. That plan will also provide a
    timetable by which the lease revenues will finance the operation of the
    areas managed by the Trust.
        Question. How many years do you envision Federal support for
    Presidio operations remaining at the level requested in the fiscal year
    1998 budget?
        Answer. The Department lacks the appropriate information to
    determine the exact time when Federal appropriations will diminish.
    However, the Department notes that significant work must occur before
    the buildings can be leased. To achieve this result, the Trust has
    several financial tools by which it can guarantee loans, provide direct
    loans, or issue Treasury obligations. All of these financial
    authorities are subject to Federal appropriations and the use of these
    tools will require the appropriation of funds in excess of the amounts
    requested in the fiscal year 1998 budget.
        Question. How long before we reduce that amount by half?
        Answer. As stated previously, the Department lacks sufficient
    information to determine when Federal appropriations will be reduced
    for the Presidio. The financial plan that the Trust is required to
    prepare should provide an indication of the timeframe.
                 government performance and results act (gpra)
        The agency budget justification states that by Spring 1997, a
    revised strategic plan will be produced.
        Question. What is the status of the strategic plan development?
        Answer. The strategic plan should be published in the late summer
    of 1997.
        Question. Are copies available? If not, when will they be
    available?
        Answer. Copies of the final draft strategic plan (published October
    1996) are now available, as are the revised interim goals. The final
    strategic plan is expected to be available late this summer.
        Implementation of GPRA requires the establishment of national
    accomplishment and accountability standards.
        Question. How will such uniform standards be established for the
    agency which is highly decentralized, and in which decision making
    authority is delegated to individual park managers?
        Answer. The GPRA requires common outcomes rather than uniform
    standards throughout the agency. Development of an Eight-Step process
    of GPRA implementation--which goes from the mission of NPS to daily
    activities to reporting on annual accomplishments, and by setting
    Servicewide outcome goals--will enable individual parks to use the
    Servicewide goals (which will be aggregated) as well as develop park-
    specific goals. The entire NPS GPRA implementation system is designed
    to work at both the national (Servicewide) and park-specific levels.
        Question. Will GPRA reduce costs for the agency?
        Answer. Once GPRA is fully implemented, NPS expects this will make
    the agency more efficient.
        Question. Does the agency intend to discontinue the use of any
    other planning processes upon implementation of GPRA?
        Answer. The NPS is considering eliminating the Statement for
    Management as redundant to the annual performance plan. The agency is
    also working to integrate GPRA with current NPS planning and management
    reporting processes.
        Question. Does the agency intend to continue its consultation
    process with Congress?
        Answer. The NPS has consulted with Congressional offices since
    August 1995, on GPRA and its implementation. Because GPRA
    implementation is an ongoing process, the NPS intends to continue
    consulting with Congress in the future.
                                park operations
        A $65.7 million increase is planned for park operations. The agency
    budget justification states that parks will receive a one percent
    across-the-board increase. In addition to the one percent across-the-
    board increase, the agency proposes to increase operations at various
    park sites by $16.3 million.
        Question. How are operating costs and efficiencies assessed
    annually to determine if some parks need more or less in funding?
        Answer. The NPS maintains a data base which identifies all unfunded
    park operating requirements. This data base is generally updated twice
    a year: 1) in the spring prior to the beginning of the budget
    formulation process; and 2) in the fall, after enactment of the current
    year budget request. The increases identified in the data base undergo
    review at all levels of the organization, beginning with the park and
    park cluster management, and continuing with the Regional and
    Headquarters Offices. After review, the requests are prioritized within
    the amount of funding allowance provided at each stage of the budget
    process.
        The agency budget request states that 63 units will receive an
    increase of 214 FTEs and $16.3 million.
        Question. How will these FTEs be allocated among each of the units?
        Answer. If the entire $16.3 million is enacted as proposed, the
    FTEs associated with each request and identified by the requesting
    office, would be allocated as described in the NPS fiscal year 1998
    Budget Justifications. Should the requested dollars not be provided,
    NPS would reexamine staffing requirements prior to any allocation so as
    to fit the needed FTE within available targets.
        A $7.1 million increase is requested to improve capabilities within
    the natural resources management program. Included in this amount is
    funding for establishment of Cooperative Ecosystem Studies Units to
    focus on science needs of NPS.
        Question. What portion of the total scientific program will be
    funded from this effort?
        Answer. The NPS defines its ``scientific program'' as inclusive of
    both its research and resource management activities. Natural resource
    management applies the scientific findings of inventory, monitoring,
    and research to the management of park natural resources. The NPS
    technical specialists in natural resource management generally are
    trained in one of the natural or social sciences and use their training
    as scientists to guide their application of scientific information in
    their routine work. The Service's natural resource budget request in
    fiscal year 1998 (Natural Resources Applied Research, Natural Resources
    Management, Everglades Restoration and Research) totals $93.2 million.
    The requested increase of $7.1 million represents 7.6 percent of this
    total request. The Cooperative Ecosystem Study Unit (CESU) portion of
    the increase represents 2.5 percent of the total natural resources
    request.
        Question. What portion of total science needs are handled ``in
    house?''
        Answer. Very little research is conducted in-house. The NPS does
    have structured air-quality and social science research programs.
    However, NPS obtains most of its needed scientific research from its
    partners in the USGS Biological Resources Division (BRD), other
    governmental research organizations, the academic community, and other
    science partners. The Park Service relies on BRD to fund and conduct
    much of the biological research NPS needs, but in some cases also
    directly funds the applied, site-specific biological research that BRD
    either is unable, or does not want, to fund. The NPS receives research
    support from other divisions of the USGS and also directly funds some
    of its water and geology research needs.
        The NPS usually defines ``science needs'' to include its resource
    management activities--that is, the application of science to
    management of resources. The Park Service handles inhouse almost all of
    its resource management science application needs within its resource
    inventory, monitoring, and management activities. The NPS seeks
    technical assistance to support this inhouse application from BRD and
    other government researchers and science-educated professionals, from
    university scientists, and from scientists in other partner
    organizations.
        Question. How does work to be performed by these units differ from
    work performed by the Biological Research Division of the U.S.
    Geological Survey?
        Answer. The BRD conducts biological research, but not research in
    other disciplines and not routine, management-oriented inventories,
    monitoring, and operational management activities that apply science.
    The NPS science-educated resource management professionals analyze and
    apply scientific information from a wide range of physical, biological,
    social, and cultural sciences in conducting their inventory,
    monitoring, and resource management responsibilities. The CESUs will
    provide technical assistance to NPS and other land managers in these
    activities, as well as in a wide range of research disciplines.
        The CESU partnership is designed to provide NPS professionals daily
    consultation with BRD research biologists, as well as with university
    and other Federal researchers in non-biological disciplines. The work
    performed at these units will be directed and overseen by a CESU
    managers committee (from land management and other agencies).
        A $6.5 million increase is planned for cultural resource management
    program needs. Of this amount $3.5 million is planned for the Vanishing
    Treasures program.
        Question. How much of this program involves cooperative
    arrangements with other government or private interests?
        Answer. To date, there are no cooperative agreements with other
    government or private interests in the Vanishing Treasures program. It
    is likely, however, that some parts of the program, for example the
    training, will involve cooperative agreements with educational
    institutions that possess demonstrated expertise in ruins preservation
    in arid lands. There could be room for other agreements as well.
        Question. Is any funding for this effort received through
    leveraging?
        Answer. The vast majority of the need for the Vanishing Treasures
    initiative involves straightforward operational activities of the
    National Park System, in which opportunity for leveraging is limited.
    It is anticipated that private philanthropists will want to
    participate--probably in some area of work that would not normally be
    done with appropriated dollars. The Vanishing Treasures Working Group
    would endeavor to use both appropriated and donated funds in a manner
    that maximize the benefit to the resources and the taxpayers, and that
    might be described as leveraging. We also believe that, should the
    Congress fund the program, the private sector will be more likely to
    support the program, thus allowing appropriated funds to leverage
    donated funds.
        Question. Are Native American Tribes active partners in this
    program?
        Answer. The Vanishing Treasures Working Group has not yet enlisted
    Tribes as active partners, however several Tribes are aware of the
    initiative and could be involved if the program is fully funded. In
    addition, a plan has been developed for consultation with Tribes known
    to have affiliation with the places to be preserved, and preliminary
    consultations will begin within the next several weeks.
        A report by the General Accounting Office, dated April 1997, states
    that ``decisions about spending and operating priorities associated
    with park operating funds are delegated to individual park managers.''
    The report also states: ``According to park managers we (GAO) spoke
    with, regional or headquarters staff rarely, if ever, discussed with
    them operation priorities or results accomplished * * *. No
    expectations have been established for the goals that are to be
    achieved in the parks, and there is no process for measuring progress
    toward these goals.'' The GAO's conclusions are that national priority
    setting and accountability is lacking regarding expenditures and
    accomplishments at the parks.
        Question. What action is the agency taking to address the issues
    identified in this GAO report?
        Answer. The NPS acknowledges that most of the day-to-day operating
    and spending decisions at parks have been delegated to the park
    managers. The need to balance competing priorities as ever-changing
    circumstances warrant is best left to managers on the scene. The NPS
    disagrees with the report's conclusion that operational priorities are
    ``rarely, if ever, discussed'' with park managers by regional and
    headquarters management. Overall NPS operational policies and
    priorities are communicated to park managers in many forms, ranging
    from official memorandum, electronic mail, and formal meetings. For
    example, in fiscal year 1997, the Acting Deputy Director of NPS
    communicated to the field the expectation that the fiscal year 1997
    enacted appropriations should prove sufficient to preclude significant
    closures as was the case in fiscal year 1996. Special emphasis program
    thrusts, such as messages on employee safety and enhanced fee
    collection, are frequently highlighted by central office personnel in
    various communications. In addition, park managers are evaluated by
    regional directors based upon performance in park operations, and
    specific priorities are frequently highlighted in these evaluations to
    stress the importance placed upon them. These practices will continue
    and further emphasis will be placed on effective communication of NPS
    priorities to the field.
        Question. How will these findings be addressed in the development
    of GPRA goals for fiscal year 1998?
        Answer. The NPS is implementing GPRA by requiring the development
    of goals and annual performance plans at the park level. These plans
    will be in conformance with the NPS Strategic Plan and will be approved
    by Regional Directors. This GPRA implementation plan, to begin for
    fiscal year 1998, will ensure that further emphasis is placed on what
    results are anticipated from a park manager's efforts.
        The process of developing appropriate and meaningful goals is
    dynamic. When developed and stabilized, they should provide a linkage
    of budget resources to results achieved. This process may take several
    years, but should lead to performance measurement in a more systematic
    manner than at present.
        A General Accounting Office report dated April 1997 states that the
    agency's flexibility is greatly diminished due to the large proportion
    of permanent employees. The GAO states that 93 percent of the Park
    Service staff is permanent which contradicts with the highly seasonal
    use of the parks.
        Question. Why is the amount of permanent staffing at this
    percentage level?
        Answer. The percentages cited are incorrect. The percentage of
    permanent employees in NPS ranges from 60 to 75 percent of the total
    work force, depending on the time of the year. The number of seasonal
    employees peaks during the summer season. For example, at the beginning
    of the summer season, only approximately 60 percent of NPS employees
    on-board would be classified as ``permanent.'' This number grows as
    seasonals go off the payrolls throughout the summer and into the fall.
        While the number of permanent employees is currently higher than it
    has been in the past, there are several reasons for this trend. So as
    to ensure that health and life insurance benefits are provided to
    eligible employees, NPS has taken steps to more appropriately classify
    long-term temporary employees who work longer than six months of the
    year and are employed without separation for a series of years. This
    has resulted in a reduction of ``temporary'' employees in NPS. Another
    factor which has lessened the number of ``seasonal'' employees is a
    change in the pattern of park use by visitors. It is increasingly
    common to see rising visitation at parks in the ``off-peak, shoulder
    seasons'' of the fall and spring. This practice has resulted in
    seasonals being required for longer than a six-month period, and a
    reclassification of these employees to permanent.
        Most importantly, at many parks, limited funding has decreased the
    number of seasonals able to be hired. The reduction in the seasonal
    program is a common management action taken to offset mandated cost
    absorptions in recent years, particularly the absorption of pay raises
    costs not provided. These actions have reduced the percentage of
    ``seasonals'' in the NPS work force.
        Question. Does the agency foresee an increase in the percentage of
    the workforce comprised of temporary employees?
        Answer. The NPS management has made it clear to park and regional
    managers that the growing percentage of permanent employees is a
    practice that is not generally conducive to good management.
    Accordingly, should the budget of NPS at parks continue to grow
    steadily as in fiscal year 1997, and as requested for fiscal year 1998,
    the percentage and number of temporary employees is likely to
    stabilize, at the least, and should potentially grow.
                              resource stewardship
        During the State of the Union message the President announced the
    establishment of 14 National Heritage Rivers.
        Question. How will NPS be impacted by the establishment of these
    rivers?
        Answer. Communities will submit nominations to designate rivers,
    and some that are identified that may include reaches that run through,
    or near, parks. In the event that one of these rivers gets designated,
    it is likely that park staff will be invited to participate in the
    partnership that is established to work on the community's plans.
        In addition, several technical assistance and grants programs in
    NPS have been identified as useful components of the Federal
    ``toolbox'' that is available to assist communities with river
    conservation and historic and cultural resource preservation. These
    programs include Rivers, Trails, and Conservation Assistance, Historic
    Preservation Tax Incentives program, Comprehensive Historic
    Preservation Planning, the Historic Preservation Fund, and others. It
    is anticipated that NPS, operating these programs according to their
    customary criteria, may be able to assist some American Heritage River
    communities.
        Question. What criteria will be used for designating a National
    Heritage River?
        Answer. The American Heritage Rivers initiative was outlined in a
    Federal Register notice (published May 19, 1997) that invited public
    comment. The criteria listed in the Federal Register notice (which are
    still subject to change) are:
                              qualifying criteria
        The qualifying criteria are intended to be broad, flexible, and
    credible. Designation is available both to community-led efforts that
    are well underway and to communities just beginning. In making a
    nomination, sponsoring communities or organizations must demonstrate
    broad community support; notable resource qualities; local and regional
    partnership agreements; strategies that lead to action; and an ability
    to achieve measurable results.
      --(1) Broad Community Support.--A broad spectrum of private citizens,
            such as landowners, businesses, educational and arts
            organizations, community leaders, economic developers,
            nonprofit organizations, public and private institutions, local
            and State government agencies, Indian Tribes, elected
            officials, and/or other parties within and adjacent to the
            proposed area or areas support the designation and the goals of
            American Heritage Rivers.
      --(2) Notable Resource Qualities.--There are within the proposed
            river area (as defined by the community or organization) a
            range of natural, economic, scenic, historic, cultural, and/or
            recreational features that demonstrate distinctive qualities of
            America's river heritage.
      --(3) Local and Regional Partnership Agreements.--The principal party
            or parties nominating the river and local or regional
            governmental entities show their willingness and capability to
            enter into new, or to continue and expand existing, partnership
            agreements with each other as well as with Federal and State
            agencies, Indian Tribes, and/or other parties to implement a
            plan for the river area.
      --(4) Strategies That Lead to Actions.--The principal local
            sponsoring party or parties has in hand, or is developing, a
            broad plan of action for the river area. Any actions planned on
            the designated area should not impact downstream communities.
          At a minimum, the strategy includes the following components:
            community vision; operating procedures and policies;
            description of how the proposal takes into account existing
            plans for the area; public participation and public education;
            projects and products (including any anticipated impacts beyond
            the designated river area); resources committed and anticipated
            (including means for generating additional and matching support
            from both public and private sources; schedule of actions; what
            the community expects the Federal role to be; obstacles to
            community action, including those the community believes can be
            resolved by joint Federal, State, and local support; and
            Measures of success.
      --(5) Measurable Results.--Implementation of the community's vision
            must result in measurable benefits to the river community
            reflecting the community's goals, including, but not limited
            to, protection of water resources and/or public health,
            restoration of rivers, protection and highlighting historic and
            cultural resources, revitalization of local and regional
            economies, and/or implementing sustainable development within
            the river area.
                               selection criteria
        A selection council, convened by the President and discussed below,
    will, for those nominations meeting the qualifying criteria, also seek
    to ensure that, individually or as a group, American Heritage Rivers
    will exemplify America's river heritage at its best, in all its
    natural, historic, cultural, social, economic, and ecological
    diversity. The selection council will judge whether the designated
    rivers will showcase a variety of stream sizes and situations, in
    urban, rural, and mixed contexts. They will also assess the potential
    for an American Heritage River to showcase one or more innovative
    programs in such areas as watershed planning, historic preservation,
    wildlife management, fisheries restoration, community revitalization,
    floodplain management, and recreation. Applicants should keep in mind
    the selection criteria in their responses to the qualifying criteria.
        In addition, designated rivers will be able to benefit
    significantly from a broad range of refocused or retargeted Federal
    programs or other assistance and help generate broader public support
    for the goals and guiding principles of American Heritage Rivers as
    excellent examples and models for emulation throughout the Nation.
        Question. How much will the President's initiative cost the Park
    Service?
        Answer. Because the work done for this initiative falls entirely
    within the scope of existing programs (and their mandates and
    criteria), it is anticipated that the only cost to NPS for support of
    the American Heritage Rivers initiative will be the time associated
    with FTE dedicated to American Heritage Rivers.
        A $2.5 million increase is planned in the Applied Research program.
    Three projects are scheduled for completion in fiscal year 1997 which
    relate to air quality monitoring.
        Question. Based on findings from these studies, how will
    alternatives be developed to determine the Administration's approach to
    air quality management around these three study areas?
        Answer. The $2.5 million increase for the Natural Resources Applied
    Research Program is primarily for establishing Cooperative Ecosystem
    Studies Units at universities; none of this increase will fund
    additional air quality monitoring and research activities.
    Coincidentally, $2.5 million of the $8.3 million fiscal year 1998
    budget request for applied research is earmarked mostly to support all
    of the ongoing long-term visibility monitoring and research performed
    in national parks--especially those designated as ``Class I'' under the
    Clean Air Act.
        However, a $1.0 million increase is being requested within the
    Natural Resource Management portion of the fiscal year 1998 budget
    primarily for the much needed modernization of the NPS air quality
    monitoring network.
        With respect to the three projects slated for completion in fiscal
    year 1997, the Administration will rely heavily on collaborative
    decision-making processes with all major stakeholders--i.e.,
    appropriate Federal, State, local regulatory agencies and legislative
    bodies, business and industry groups, other Federal land managing
    agencies, foreign governments and environmental agencies (in the case
    of the United States-Mexico Aerosol Study) and the public--to develop
    alternatives in determining its approach to air quality management
    around the three study areas. The NPS is already an active participant
    in numerous multi-stakeholder, regional (and international)
    partnerships that have been formed to carry out these and other studies
    and to formulate appropriate solutions to air quality management
    problems facing national parks.
        Question. What mitigation measures are being employed to stop or
    stall the spread of exotic plants and animals in the national parks?
        Answer. While individual parks conduct many control activities,
    there is currently no Servicewide program in place to control exotic
    plants and animals. However, some examples include herbicide
    applications to control exotic plants, and beneficial (biological
    control) insects have been released at dozens of parks. Several western
    parks require horse and mule owners to use hay which is certified to be
    free of weed seeds. The NPS has played an active role in developing
    ``Pulling Together A National Strategy for Invasive Plant Management''
    and has assisted with several Congressional briefings, developed park-
    specific educational materials and helped fund other educational
    materials. St. Croix National Scenic River in Wisconsin has an
    aggressive education campaign and boat inspection program to prevent
    the introduction of zebra mussels. Eastern parks use funds transferred
    from the Forest Service to spray gypsy moths and hemlock wooly
    adelgids. Wild pigs have been eliminated from Channel Islands National
    Park in California and are being managed at Great Smoky Mountains
    National Park in Tennessee and at the Hawaii Parks. Fencing is being
    constructed at White Sands National Monument in New Mexico to control
    gemsbok. $100,000 is requested for the Northwest Ecosystem Office.
        Question. Does this office have any association with the former
    Office of Forestry and Economic Assistance located in Portland?
        Answer. This Administration established two offices in Portland,
    Oregon in support of the Northwest Forest Plan. One office, the U.S.
    Office of Forestry and Economic Development in Portland, dealt
    primarily with economic assistance to the States and local communities
    that were affected by the Northwest Forest Plan. After publishing its
    final report to the President and Congress, the Economic Development
    office closed, as scheduled, in December 1996. The second office, the
    Regional Ecosystem Office, is an operating, multi-agency office that
    works for various Federal land and regulatory agencies that have
    responsibility for implementing the Northwest Forest Plan. While both
    offices were part of the Northwest Forest Plan, they worked separately
    and on different aspects of the plan.
        The estimated number of acres of park land which have been
    inventoried to current scientific standards for archeological resources
    is 1.5 million.
        Question. What is the long term timetable to obtain an inventory of
    the total acres needed to be assessed?
        Answer. Beginning in 1992, each NPS Region developed a plan
    establishing long-term strategies and priorities for conducting
    archeological inventories on park land within the Region. The plans
    currently are being reviewed and revised to reflect NPS's new cluster-
    level organization. The plans contain a ranked list and schedule of
    needed archeological inventory projects. The inventory program is a
    long term one that will take many decades to complete, depending upon
    the funds available each year to undertake projects.
        The agency proposes $750,000 for finalization of the Cultural
    Landscapes Inventory Procedural Guidance Manual.
        Question. Once the manual is finalized, what are long term
    inventory plans? Be specific relative to timing and cost.
        Answer. Development of the Cultural Landscapes Inventory Procedural
    Guidance Manual is only a small part of the $750,000 allocated in
    fiscal year 1997 for the Cultural Landscape Inventory (CLI). Also
    included is finalizing the development of the associated database,
    Cultural Landscapes Automated Information Management System (CLAIMS);
    conducting CLAIMS training; and ongoing inventory field work
    Servicewide.
        Long-term inventory plans include performing the CLI research and
    field work Servicewide in accordance with the goals of NPS Strategic
    Plan and the GPRA; entering collected data into CLAIMS; refinement of
    CLAIMS management queries and reports; and training to maintain high
    professional standards regarding the information collected. Each region
    has prepared implementation plans establishing long-term strategies and
    priorities for performing the CLI research, field work, and data entry.
        The NPS anticipates this process will take in excess of a decade.
    The total costs associated with the long-term plans are unknown, due to
    the unknown quantity of resources that will be available. In order to
    be more specific regarding timing and costs, a goal has been
    established to complete reconnaissance surveys of all parks by the end
    of fiscal year 1999 to identify the potential scope of cultural
    landscapes in the National Park System.
        The agency states that funding to provide enforcement protection of
    fossil resources has been minimal while documented violations have
    increased.
        Question. How will the proposed increase of $2.5 million affect
    these protection efforts?
        Answer. The $2.5 million increase refers to the estimated increase
    in budgetary resources proposed in fiscal year 1998 to address the
    ``resource protection'' program component of the budget subactivity
    ``Resource Stewardship.'' Most of this funding ($1.5 million) would
    cover the increased benefit costs for NPS rangers who have been
    appropriately shifted to a new retirement plan similar to that provided
    for other law enforcement officers.
        The remaining $1.0 million reflects an estimate of the ``resource
    protection'' share of the funding requested for park base operational
    activities in fiscal year 1998. The total amount requested within park
    management is $24.4 million and would allow a one percent across-the-
    board increase for all park units to maintain current program
    capabilities and selectively address unfunded, high-priority needs at
    63 individual units. Examples of parks proposed for increases which
    would involve resource protection activities include Cape Hatteras
    National Seashore, Kenai Fjords National Park, Florissant Fossil Beds
    National Monument, Whiskeytown National Recreation Area, and Manzanar
    National Historic Site.
        The Park Service just completed its Servicewide strategy for
    management of exotic vegetation. The NPS has a prioritized list of park
    projects that for potential funding. It is estimated that current
    funding has met less than 10 percent of the documented need.
        Mining operations are expected to increase in the California desert
    parks.
        Question. What long term staffing and funding needs will be
    necessary to manage the Desert mining program?
        Answer. At this time it is difficult to discern future long-term
    staffing and funding needs beyond the current baseline of active mining
    operations, number of proposed mining operations, abandoned mine sites,
    and associated resource impact issues. The fiscal year 1998 program
    increase request for salary and support costs for six FTE ($580,000),
    combined with the increase for Mojave National Preserve ($318,000 and 5
    FTE) is the minimum necessary to meet currently anticipated
    specialized, technical assistance needs of the Desert park units. The
    six FTE in the Servicewide program will serve the parks in various
    technical capacities, including conduct of claim validity examinations,
    regulatory and policy guidance, mine land reclamation, and hazardous
    substance toxicology and remediation. However, events beyond Park
    Service control (e.g., significant price increase of mineral
    commodities, increased demand, and development of more cost-effective
    mining technologies) could result in more proposed operations beyond
    the current and projected level, thereby increasing the need for
    additional NPS staff and funding resources to handle management
    demands.
        If an unanticipated increase in mining activity occurs, NPS will
    need additional FTE and support funds to conduct the requisite mining
    claim validity examinations to verify whether a claimant possesses a
    bona fide mineral right and to process proposed plans of operations. In
    addition, NPS may need funding to acquire mining claims if future
    mineral development of specific claims will be in derogation of park
    resources and values.
        Mojave National Preserve's fiscal year 1998 program increase
    request for salary and support costs dedicated to mining claims
    management should meet the current and future park-based workload.
    However, fiscal year 1998 park-based program increases do not address
    long-term mining claims management staffing and funding needs at Death
    Valley and Joshua Tree National Parks.
        Question. Is the proposed addition of six FTEs sufficient?
        Answer. As addressed above, salary and support cost increases for
    six FTE in the Geologic Resources Division will meet current technical
    assistance needs in the California Desert park units. The fiscal year
    1998 program increase proposed for Mojave National Preserve should meet
    current and future park-based mining claims management program needs.
    Death Valley and Joshua Tree National Parks may need additional mining
    claims management FTE depending upon the number and frequency of future
    mining operation proposals.
                                visitor services
        Interpretive and education programs are provided at all 374 units
    in the system.
        Question. How many units present this information only through
    displays (without personal contact with employees or volunteers)?
        Answer. It is difficult to separate the units with only non-
    personal services (exhibits, wayside exhibits, publications) from those
    with personal (ranger-led programs) and non-personal services. There
    are approximately 324 staffed sites which offer both types of visitor
    experiences. Only the smallest of sites offer just displays. Parks such
    as Shenandoah National Park offer all types of display services and
    interpretive staff. Others such as Theodore Roosevelt Island have a few
    wayside exhibits but no permanent staff and the Netherlands Carillon
    only has a single wayside exhibit. There are a small number of sites
    that offer only information displays and no permanent onsite staffing.
        Question. Are there more such units today than in the past?
        Answer. Small, unstaffed sites, in the past, were usually added to
    the System through boundary changes and other adjustments affecting
    larger NPS units. Areas added to the Park System in the past five years
    such as Washita Battlefield and Nicodemus National Historic Sites will
    be staffed by permanent NPS personnel. These areas will likely also
    feature wayside exhibits to assist in interpreting events that took
    place at various locations at these park areas.
        Question. What is the past five year data on this question?
        Answer. The NPS does not maintain historical information on the
    number of units that present interpretive information without staff
    resources. However, information is maintained on the demands for non-
    personal service displays, publications, and the workloads involved in
    production. A survey completed in June 1995 indicated the Service had
    791 visitor center exhibits, 10,618 wayside exhibits, 1,233 media
    programs, 370 folders, and 163 park handbooks. This Harpers Ferry
    Center Interpretive Media Rehabilitations Survey defines the media
    rehabilitation needs for the Service in each category. The following
    statistics represent the work accomplished over the past five years in
    the area of non-personal services. A very small portion of this work
    was accomplished for non-staffed NPS units.

                                                      PUBLICATIONS
    ----------------------------------------------------------------------------------------------------------------
                                                                                                       NPS folders/
                     Fiscal year                   Units print   Quantity printed    Total visitors      visitors
    ----------------------------------------------------------------------------------------------------------------
    1992.........................................          221         20,142,000        274,694,549            1:14
    1993.........................................          259         25,609,900        273,120,925            1:11
    1994.........................................          247         31,117,000        268,636,169             1:9
    1995.........................................          243         27,965,500        269,564,307            1:10
    1996.........................................          218         29,532,050        265,713,599             1:9
    ----------------------------------------------------------------------------------------------------------------

                                                    WAYSIDE EXHIBITS
    ----------------------------------------------------------------------------------------------------------------
                                                                                         Waysides
                               Fiscal year                           -----------------------------------------------
                                                                            New        Rehabilitated       Total
    ----------------------------------------------------------------------------------------------------------------
    1992............................................................             606             417           1,023
    1993............................................................             961             370           1,331
    1994............................................................             433             259             692
    1995............................................................             570             109             679
    1996............................................................             503             217             720
    ----------------------------------------------------------------------------------------------------------------

    Total exhibits completed--new and rehabilitated

            Fiscal year                                             Exhibits
    1992..............................................................    25
    1993..............................................................    13
    1994..............................................................    10
    1995..............................................................    28
    1996..............................................................    39

        Question. Is the ``Parks as Classrooms'' program utilized away from
    park units?
        Answer. Yes, the Parks as Classrooms program is an integrated,
    curriculum based activity that is designed to meet local school
    curriculum and classroom needs. The program is typically made up of
    three activities: (1) a pre-site visit by a Park Service interpreter to
    the classroom where students are prepared for an on-site learning
    activity, (2) an on-site learning experience at the park, and (3) a
    follow-up activity where the learning experience is evaluated. The park
    interpreter works closely with the classroom teacher to assure that the
    teaching/learning objectives are met. Many parks also produce theme-
    related teaching materials such as traveling trunks, teaching kits,
    interactive CD-ROM programs and teaching materials which are sent to
    schools. The Park Service is also using its Internet website, ParkNet,
    and has recently entered into an agreement with NASA's Goddard Space
    Center to provide cooperative education materials and programs
    nationwide.
        Question. Is this program presented in urban non-park areas?
        Answer. Yes, all urban national park sites provide some degree of
    outreach programs to urban populations. For example, Santa Monica
    Mountains National Recreation Area in Los Angeles participates in the
    ``Wonderful Outdoor World'' program which provides outdoor learning and
    camping experiences for youth in their own inner-city neighborhood. At
    Independence National Historical Park in Philadelphia, park personnel
    offer an outreach program called the ``Traveling Ambassador'' which
    takes programs on jobs, history, and the National Park System to the
    inner-city. During the 1996-97 school year, the program was presented
    to over 7,000 students in 54 schools. Ecology Village at Gateway
    National Recreation Area in New York City offers off-site programs to
    over 3,000 children from January to March while the park's Outreach
    Office provides programs to thousands more throughout the year.
        There are similar programs at Golden Gate National Recreation Area
    in San Francisco; Martin Luther King National Historic Site in Atlanta;
    Jefferson National Expansion Memorial in St. Louis; Lake Mead National
    Recreation Area near Las Vegas; Jean Lafitte National Historical Park
    and Preserve in New Orleans; and Boston National Historical Park in
    Boston. Some urban area parks such as those found in Washington, D.C.,
    work with other organizations such as Project Learning Tree, Project
    Wet/Wild, and Urban Tree House to provide educational programs off park
    lands in urban settings. Many parks also offer drug prevention programs
    to urban school groups.
        A Departmental OIG report found that NPS has failed to do an
    adequate job of recovering costs of emergency services from
    beneficiaries. The report states that ``at least $4.5 million were not
    recovered,'' and ``fee collections totaling $757,800 were
    inappropriately retained by park units''.
        Question. What action is the agency taking to rectify this problem?
        Answer. The NPS disagreed with the Office of Inspector General
    Report (96-I-806) recommendation which we felt was in opposition to
    Congressional intent behind current law (28 U.S.C. 2671 et seq.), under
    which NPS has discretion to provide emergency medical services. Loss of
    such discretion would result from a practice of charging for emergency
    services, consequently extinguishing the immunity Congress intended for
    these activities. The Department has taken this matter on itself for
    resolution, and NPS is awaiting the Department's decision.
        Question. What specific changes will be made in billing procedures
    to improve collections and make a more consistent process?
        Answer. The NPS agreed to make the proper deposits into the
    miscellaneous receipt accounts of the U.S. Treasury, but disagreed that
    emergency search and rescue fees or emergency medical fees should be
    collected, absent willful and wanton negligence on the part of the
    lost, rescued, or injured visitor.
        Question. How extensive is the problem of illicit drug
    manufacturing on park lands?
        Answer. The NPS has had, and continues to have, a significant
    impact in the campaign to halt illegal drug production on National Park
    lands. As a result of numerous sustained law enforcement initiatives
    implemented by NPS there are indications that a number of marijuana
    growers have either stopped growing marijuana or have moved their
    operations from NPS lands onto private land or indoors.
        In Hawaii, drug producers avoid national park lands for fear that
    they will be caught by park rangers, convicted in Federal Court, and
    sent to mainland prisons. Rangers have waged a relentless ``Marijuana
    Campaign'' since 1986 on marijuana growers who have historically used
    park lands as their garden sites. These joint eradication operations
    have been so successful that, today, most growers admit that NPS lands
    in Hawaii are off limits to the production of marijuana. The parks
    continue to produce large numbers of plant seizures and arrests.
        The NPS Southeast Region is now the most prolific marijuana
    producing area in the System. Park rangers are producing a continuous
    stream of marijuana production cases. Efforts have increased
    significantly in 1997 to reduce this illicit crop and to arrest those
    responsible. In recent years the Big South Fork National Recreation
    Area has been used for the growing of marijuana plants. Joint
    eradication operations with the Forest Service on the Tennessee and
    Kentucky border have seriously affected the local drug economy and
    resulted in the destruction of large numbers of marijuana plants.
        The NPS areas located on the United States/Mexico border are
    aggressively pursuing counter-drug operations with a sustained year-
    round effort. The U.S. Customs Service and the Border Patrol have
    provided cross training to the rangers with the Customs Service
    providing some cross delegation authority for the rangers. Smuggling
    activities continue and the violence appears to be escalating. Most
    smuggling cases are considered far more dangerous than marijuana
    cultivation because most smugglers are Mexican nationals who are more
    accustomed to violent conflicts with police in Mexico.
        The NPS anticipates continued violent contacts with growers and
    smugglers in the future. The park rangers assigned to the border parks
    are better trained and equipped than they were five years ago. Most of
    these border and marijuana growing park areas have one or two rangers
    who have experience and training in the areas of smuggling and
    surveillance of suspected growth locations.
        Based on Park Service jurisdiction the agency is required to
    enforce all Federal laws and regulations within park units.
        Question. Is there any significant cooperation occurring with local
    authorities on Park land?
        Answer. Yes; NPS is working with a number of local task force
    operations which are being used to conduct coordinated counter-drug
    operations. The NPS is also assisted by the military in a support mode
    where the military provides transportation and other non-law
    enforcement support when requested. The NPS is transitioning to more
    electronic surveillance of the areas where drugs are grown or
    manufactured thus saving overtime costs and operating funds until they
    are actually needed. For the most part, all operations of this nature
    occur within park boundaries. The drug problem has increased in the
    last three years with the production of marijuana on the increase on
    park lands. Special emphasis is being undertaken to eliminate this
    activity, not only due to its illegality but because this farming
    method also causes harm to the park environment.
        Question. To what extent can State and local statues be enforced on
    park land?
        Answer. In areas of proprietary jurisdiction, the State may enforce
    State law, but generally chooses to leave NPS to provide the level of
    enforcement activity that is called for on park land. In areas with
    concurrent or exclusive jurisdiction, NPS cooperates with the United
    States Attorneys Offices that handle court prosecution of violations.
    The decisions regarding jurisdiction are made by Department of Justice
    personnel. For the most part, States consider the parks responsible for
    enforcement actions within park boundaries. Cooperation is excellent
    between NPS and State and local law enforcement officials.
    Additionally, NPS does not volunteer to operate outside its boundaries
    or jurisdiction unless in a cooperative capacity with our State and
    local counterparts.
        Question. Will the agency make increased use of visitor
    transportation systems at more park units in the future?
        Answer. There will be increased use of these systems in park units
    in the future due to growth in park unit visitation and limited funds
    for improving park roads and providing additional parking. In many
    instances roadways cannot be widened or parking areas enlarged to
    accommodate private vehicles because of the need for resource
    protection and other environmental constraints.
        A new visitor transportation system will become operational in Zion
    National Park and systems will be expanded in Grand Canyon and Yosemite
    National Parks in the near future. System planning has been undertaken
    in special studies or in NPS General Management Plans for: Acadia,
    Crater Lake, Sequoia, Mount Rainier, and Yellowstone National Parks;
    Indiana Dunes National Lakeshore; Presidio (Golden Gate National
    Recreation Area); and Bandelier National Monument.
        While there has been major storm damage to facilities at Yosemite
    National Park, there is an opportunity to implement restoration efforts
    which will enhance the outstanding values. A significant aspect of this
    opportunity involves planning the visitor transportation system. The
    fiscal year 1997 Supplemental appropriations bill contains funds for
    repair and restoration of visitor transportation systems.
        Question. What long term plans are being made to implement the best
    possible transportation system?
        Answer. The NPS is working to identify options for a regional
    system through its involvement in the Yosemite Area Regional
    Transportation Strategy (YARTS). The YARTS is currently conducting
    public workshops to help in proposing a level of service for the
    forthcoming plan for a regional system. The local system that will move
    people around Yosemite Valley will be defined through the NPS Valley
    Implementation Plan, which is scheduled to be released for public
    comment in September 1997. This plan is considering an in-valley
    transfer and staging area. A transfer facility in Yosemite Valley is
    needed to provide the linkage between the local in-park system and the
    regional system. The staging (parking) area is being considered as a
    potential interim facility to be constructed and reduced in size with
    the maturation of a regional system. If a regional system develops
    concurrently, then NPS can elect not to construct parking or to
    proportion it based upon the capabilities of the regional system.
        Question. What is the Park Service's ongoing relationship with
    local communities in the planning of the transportation system?
        Answer. The NPS has a formal relationship with its gateway
    communities through its membership on the YARTS board, which consists
    of representatives of Madera, Mariposa, Merced, Mono, and Tuolumne
    counties, Cal Trans, the Federal Highway Administration, Forest
    Service, and NPS. Citizens, such as business and environmental
    interests, also are invited to participate.
        Question. To what extent will the supplemental funds involve local
    communities in the planning of the system?
        Answer. Local communities will be invited to help NPS define the
    criteria and decision points for whether to develop in-valley parking,
    the size of such parking capacity, and the conditions under which to
    downsize parking facilities based on the capabilities of the regional
    system. The NPS will also invite participation from businesses and
    environmental interests, representatives of State and Federal agencies,
    and staff from the offices of the California Congressional delegation.
        Question. Will short term ``fixes'' to the storm damage affect long
    term transportation system options?
        Answer. The repairs undertaken at the park will assure that NPS is
    prepared to link with the long-term regional transportation system if
    such a system is developed in the future. If a regional system were to
    move forward without additional in-valley shuttle buses, then our bus
    capacity would be less than half of that required to effectively move
    the number of visitors that come to Yosemite Valley. Our system is
    currently designed to handle the numbers of people that we can get out
    of their cars and into our bus system, not the number that would be
    utilizing the system under a planned transportation system, where
    automobiles would no longer be used to move about the valley. A
    transfer facility would provide a point of linkage with a regional
    system. A parking area, developed under the criteria mentioned above,
    would be reduced in size and possibly not constructed at all based on
    the capabilities of the regional system.
        Question. Has NPS considered the use of advanced alternative fuel
    vehicles, such as Fuel Cell buses?
        Answer. Currently, two electric buses are in operation in Yosemite
    Valley and two more have been ordered. The supplemental funds will be
    used to purchase electric buses and possibly compressed or liquid
    natural gas buses. Because of the demands that will be placed on that
    system, fuel cell technology is not economically feasible at this time.
    Should the cost be reduced in the future, the electric buses that NPS
    has acquired would be able to take advantage of that technology.
        Question. Of all the agency's facilities used by the public, what
    percent are fully accessible to persons with disabilities?
        Answer. In 1983, NPS established an official policy statement that
    asserted that, ``it is the policy of NPS to provide the highest level
    of accessibility in all visitor and management buildings and facilities
    as is possible and feasible, consistent with the nature of the area and
    facility.'' Over the past several years, NPS has conducted an extensive
    program of education and technical assistance to help the parks
    understand what they should be doing and the methods and techniques for
    doing it appropriately and effectively. Over the past several years,
    most of the parks have conducted evaluations to identify barriers to
    access and have made some modifications and corrections, utilizing
    existing operating funds. Unfortunately, NPS has not conducted a
    comprehensive evaluation of all of its facilities to determine if all
    facilities are 100 percent accessible to persons with disabilities.
        Question. Is there a timetable for achieving 100 percent
    accessibility? If so, what is that timetable?
        Answer. Presently, there is no time table to achieve this level;
    however, all significant modifications and new construction must be in
    compliance with current code related to handicapped access.
        Question. If so, what is that timetable? What are the costs?
        Answer. In 1988-89 NPS asked each park to conduct a ``self-
    evaluation'' of their facilities and programs, utilizing the best
    information available at the time. Using the information generated by
    that evaluation, NPS made some estimates of the cost for correcting the
    access barriers that were identified and projected the cost for
    systemwide improvements. At that time, NPS estimated that it would need
    between $60 and $100 million to bring all of its facilities into
    compliance. However, that estimate was not comprehensive and actual
    costs could be more or less than that amount. Employee compensation
    costs are expected to increase by $1.7 million.
        Question. What is the agency's historic worker's compensation costs
    for the past five years?
        Answer. The NPS actual Worker's Compensation Payments for the past
    five years were as follows:

    NPS actual worker's compensation payments

                                                               Whole dollars
    1992..........................................................$9,364,000
    1993..........................................................10,249,000
    1994..........................................................11,816,000
    1995..........................................................12,332,000
    1996..........................................................14,345,000

        Question. What specific action is the agency taking to reduce these
    costs?
        Answer. The NPS has adopted the following strategy to address the
    issue: (1) the National Leadership Council has committed itself to
    ensuring that all new workers' compensation cases are managed; (2) it
    is the Service's strategic plan goal under GPRA to reduce the cost of
    new workers' compensation cases by 50 percent by 2002; (3) a Workers
    Compensation Case Management Guideline has been drafted and will be
    issued servicewide along with a supportive training video; (4) training
    for case managers is being planned; and, (5) the Department is
    identifying cases on the long-term disability roles that are
    recommended for intervention. The NPS will focus on bringing personnel
    on this list back to work. The limiting factor is lack of funds to
    support FTE for personnel brought back to work, and the lack of
    personnel to manage these cases, but both some of the funding for these
    needs are requested in NPS fiscal year 1998 budget. The NPS is also
    recruiting for a Workers' Compensation Case Manager as a point of
    contact for case management and as a liaison between NPS and the U.S.
    Department of Labor, Office of Workers' Compensation.
        Question. Does the agency have an aggressive program to return
    former employees to positions which will result in reducing
    compensation costs?
        Answer. The NPS has proposed increased funding of $320,000 in
    fiscal year 1998 for the Office of Workers' Compensation Program
    (OWCP). The proposal outlines a complementary program to the
    Department's current policy which provides FTE for two years to
    organizations wishing to reemploy injured workers who have obtained new
    skills. The NPS program would provide funding for those positions, also
    for a two-year period. At the end of the two-year period, the FTE would
    be returned and made available for use by other park units or offices.
    The request would fund nine positions servicewide.
        Question. What are Departmentwide statistics relative to this
    issue?
        Answer. The Department's actual Worker's Compensation Payments for
    the past five years were as follows:

    Department's actual worker's compensation payments

                                                               Whole dollars
    1992....................................................     $35,126,916
    1993....................................................      36,452,000
    1994....................................................      40,528,288
    1995....................................................      42,282,473
    1996....................................................      44,661,217

        The agency manages 18 percent of the land on the border with
    Mexico.
        Question. Have there been increased impacts to NPS lands as a
    result of illegal immigration and drug smuggling?
        Answer. Yes, NPS has found that increased foot traffic has degraded
    park features as well as contributed to littering and resource
    degradation in park areas. Drug smuggling has also made nighttime
    activity in these parks extremely dangerous and campground thefts have
    also increased.
        Question. Does the Border Patrol cooperate with the Park Service in
    the apprehension of illegal entrants?
        Answer. Both the Border Patrol and NPS work together to investigate
    border crimes and to apprehend those individuals entering the United
    States illegally. The NPS has an interest in protecting park resources
    which prevents the use of some Border Patrol vehicles for routine
    patrol activity; these areas are patrolled by NPS on foot.
        Question. Does the NPS utilize State, local, or other Federal
    agency law enforcement dispatch and radio systems for use by law
    enforcement rangers? If not, why not?
        Answer. Yes, in locations where there are dispatch and radio system
    resources are available. However, for the most part, State and local
    agencies do not position there communication operations on border areas
    where parks are located. The NPS, in a number of areas, provides
    communication support, dispatch services, and similar assistance for
    other agencies in ``dead areas'' where State and local communication
    systems do not work. The Park Service works closely with the U.S.
    Customs Service and in some cases shares communications systems. The
    NPS has also received grants to upgrade communication systems for
    cooperative counter-drug work.
        Question. Has the agency investigated the prospect of shared law
    enforcement communication?
        Answer. Yes, NPS has, when possible, joined with other agencies and
    local departments to share communications systems. The main problems
    are that State and Federal radio frequencies and radio equipment often
    are not compatible. For example, NPS has a presence in a consolidated
    Federal facility in Riverside, California, which is comprised mostly of
    Federal law enforcement, fire, and other law enforcement agencies. The
    NPS also shares a facility in Flagstaff, Arizona, which covers NPS,
    BLM, and Forest Service sites.
                                  maintenance
        A $13.5 million increase is requested in the Operational
    Maintenance program in fiscal year 1998, which includes a net
    programmatic increase of $7.3 million.
        Question. What is the past five year history of funding in this
    area?
        Answer. The total funding enacted for Operational Maintenance over
    the last five years was as follows.

    Operational maintenance--enacted amount

            Fiscal year                                         In thousands

    1997..........................................................  $295,830
    1996..........................................................   275,788
    1995..........................................................   273,842
    1994\1\.......................................................   301,086
    1993..........................................................   271,078

    \1\ In fiscal year 1994, NPS restructured its budget and budget
    monitoring system to more accurately reflect costs in various functional
    areas. In fiscal year 1995, after using the new structure and reporting
    mechanism for a year, functional amounts were revised to reflect the
    results of this use. In doing so, the amount estimated for operational
    maintenance was adjusted downward by about 10 percent. Subsequent
    monitoring activity in fiscal year 1996 confirmed the accuracy of this
    revision, in effect verifying the overestimates of the previous years.

        Question. How will the increase be allocated to specific park
    facilities?
        Answer. The $7.3 million in programmatic increases requested for
    fiscal year 1998 will be distributed to a number of parks based on
    needs identified by specific parks. The parks receiving this and other
    park base funding are listed and their funding need identified and
    justified in NPS budget justifications. Examples of the parks that are
    proposed to receive this funding include areas such as Antietam
    National Battlefield, Canyonlands National Park, Chickasaw National
    Recreation, Mount Rushmore National Memorial, and Natchez Trace
    Parkway.
                                  park support
        The use of volunteers is estimated to increase to 90,000 in fiscal
    year 1997.
        Question. Has the agency had difficulty locating volunteers to
    perform work?
        Answer. No; the NPS's Volunteers-In-Parks Program continues to
    experience growth in popularity. The NPS is attempting to increase the
    numbers of volunteers with specific skills relevant to NPS mission. To
    that end a ``Volunteer Opportunities'' homepage has been recently
    established on the Internet to allow individuals interested in the
    program to have direct access to existing volunteer vacancies. The
    following statistics represent the development of the VIP Program
    between 1992 and 1996.

                                  DEVELOPMENT OF THE VIP PROGRAM BETWEEN 1992 AND 1996
    ----------------------------------------------------------------------------------------------------------------
                                                                          Number of volunteers--
                               Fiscal year                           -------------------------------- Percent annual
                                                                           Total           Hours          growth
    ----------------------------------------------------------------------------------------------------------------
    1992............................................................          73,350       3,057,660               4
    1993............................................................          78,500       3,204,880               7
    1994............................................................          80,743       3,471,418               3
    1995............................................................          79,497       3,289,153              -2
    1996............................................................          89,242       3,468,903              12
    ----------------------------------------------------------------------------------------------------------------

        The total number of projects in the challenge cost-share program
    has remained constant for fiscal year 1995-1997.
        Question. What is the future potential to increase the number of
    projects in future years?
        Answer. The number of projects have remained relatively constant
    primarily because the amount of funds earmarked for the Challenge Cost-
    Share Program have remained the same at $1.8 million. The NPS attempted
    to increase the number of projects funded starting in fiscal year 1996
    and fiscal year 1997 by emphasizing in our implementation instructions
    to Regional Office selecting officials that all programs and projects
    of the Service, both inside and outside of parks, were now eligible for
    funding, and also by reducing the Federal share maximum contribution
    from $40,000 to $30,000.
        However, despite the relatively constant numbers of projects funded
    with challenge cost-share money, parks and programs consistently
    receive more than twice the number of applications than can be funded
    by the $1.8 million.
                            wildland fire management
        The agency proposes a funding increase of $2.5 million which will
    result in operations at 88 percent of the most efficient level (MEL).
        Question. What level is the agency operating at in fiscal year
    1997? Assuming this level is less than the 88 percent goal for fiscal
    year 1998, what consequences have occurred due to this lower level? How
    does the 88 percent goal compare to requests made by other land
    management agencies?
        Answer. The Park Service Budget Justification provides a summary of
    likely funding allocations from BLM to the NPS Wildland Fire
    Preparedness and Wildland Fire Operations budget activities. The
    ultimate allocation is subject to the final 1998 appropriation made to
    the BLM Wildland Fire Management account. At the request level
    contained in the President's Budget, all four Interior bureaus would be
    allocated amounts at roughly equal levels of preparedness, based on
    historical use patterns for equipment, salaries, and the other costs
    that figure in the calculation of the most efficient level (MEL). At
    the request level, this would equal about 85 percent of MEL, up from 84
    percent in 1997.
                             historic preservation
        An increase of $9.4 million is requested for the grants-in-aid
    program.
        Question. When providing matching funds for historic preservation
    efforts, is the ratio of matching always 1:1, or does it vary?
        Answer. The ratio it is not always 50 percent Federal and 50
    percent non-Federal matching share. Section 101(e)(1) and 101(e)(2) of
    the National Historic Preservation Act authorize ``matching grants'' to
    State Historic Preservation Offices (SHPO's) and to the National Trust
    for Historic Preservation, respectively, and Section 102(a)(3)
    stipulates that grants to SHPO's may not exceed 60 percent Federal
    share.
        However, Section 101(e)(3)(B) of the National Historic Preservation
    Act authorizes direct grants to ``nonprofit organizations representing
    ethnic or minority groups for the preservation of their cultural
    heritage.'' While Section 101(e)(3) is silent about a matching share
    requirement for direct grants, it is within the Secretary's
    administrative authority to require a non-Federal matching share. The
    $4.3 million cumulative total of grants awarded to historically black
    colleges and universities in fiscal years 1995 through 1997 were made
    to the United Negro College Fund (UNCF), which raised most of the $4.3
    million non-Federal matching share in accordance with the Memorandum of
    Agreement then in effect between NPS and the UNCF, and subgranted the
    funds to individual colleges.
        However, Section 507 of Public Law 104-333, the Omnibus Parks and
    Public Lands Management Act of 1996, authorizes $29 million in grants
    and identifies 12 HBCUs selected by Congress. Public Law 104-333 also
    provides authority for the Secretary to waive the non-Federal matching
    share requirement. Recent discussions between NPS, UNCF, and the 12
    HBCU's indicate that neither the HBCU's nor the UNCF can promptly raise
    the 50 percent matching share that has been contributed for previous
    HBCU grants.
        Question. If it does vary, please provide a project specific list
    for fiscal year 1998 showing the matching fund shares.
        Answer. As indicated previously, NPS does not vary the matching
    share ratio except as prescribed by the National Historic Preservation
    Act. For fiscal year 1998, it is still too early to know how much
    funding the UNCF will raise for HBCU's.
        Question. What process is used to award grants under this program?
        Answer. The $4.3 million in HBCU grants awarded during fiscal years
    1995 through 1997 were selected based upon the following criteria: (1)
    the building was listed in the National Register of Historic Places;
    (2) the building possessed greater architectural and historical
    significance than other HBCU structures; and (3) the building was in
    such a State of disrepair that, if structural deficiencies remained
    uncorrected, then the structure would be critically endangered. As a
    result, 11 of the most historically significant and threatened
    structures were evaluated by a joint Department of the Interior-private
    sector field assessment team and ranked in order. Seven of the 11 HBCUs
    selected have received grants during 1995-97. Section 507 of Public Law
    104-333, the Omnibus Parks and Public Lands Management Act of 1996, has
    identified 12 HBCU's and has authorized specific amounts for these
    individual HBCU's ($22.9 million was earmarked for the 12 schools from
    the $29 million total authorization). The Administration has requested
    a $9 million increase in HBCU grants for fiscal year 1998, and proposes
    to award grants to the 12 schools in the order they were listed by
    Congress in Section 507 of P. L. 104-333. This would be a multi-year
    effort; in order to complete enough work to make each building safe and
    usable, only three HBCU's could be assisted with the funds requested in
    fiscal year 1998.
                                  construction
        The requested allocation for the construction program calls for a
    $20.7 million decrease.
        Question. What affect will this decrease have on the construction
    backlog?
        Answer. The NPS has requested over the past number of years a Line
    Item Construction program level of $80 to $100 million worth of high
    Servicewide construction priority projects as well as other projects
    which can be linked to eliminating deteriorated conditions and
    achieving park development goals. This amount of funding is what NPS
    expects to accomplish each year given its planning and contracting
    abilities and workloads. The $20.7 million reduction from the Line Item
    program appropriation does not represent a decrease in the Service's
    effort to reduce the backlog. It is, in fact, an increase of $5.8
    million over our fiscal year 1997 request.
        Question. What are projections for income from the Recreation Fee
    Demonstration project that will be allocated to construction projects?
        Answer. The President's Budget anticipated that the Recreation Fee
    Demonstration project would raise $48 million in fiscal year 1998;
    however, since that estimate was made, Congress has amended the program
    in ways that provide for additional revenue. At this time, however, it
    is too early to know how much will be allocated to construction and how
    much will fund simple repair and rehabilitation projects.
        Question. What are projections for allocation to maintenance
    projects?
        Answer. As noted above, revenue from the demonstration fee program
    will be used to fund various high priority park projects, however,
    funding to be allocated to any particular program has not been
    determined.
        The agency has been involved in a recent consolidation of design
    services with BLM and FWS.
        Question. How is this consolidation working in terms of efficiency,
    project timing, and the ability to coordinate and prioritize between
    agencies?
        Answer. The BLM and FWS are co-locating with NPS. In December 1996,
    FWS completed their move into NPS building. The BLM will complete their
    move into NPS building by July 1997. This physical co-location of
    bureaus affords all bureaus the opportunity to share and make efficient
    use of NPS technical support systems. These systems include telephones,
    computer LAN, micrographic reproductive services, technical information
    databases, and interagency contracts. Even though each bureau continues
    to maintain the lead on their construction program, overall project
    timing is expected to improve. The co-location affords greater
    opportunity for all project mangers to confer about alternative ways to
    schedule and sequence their projects. This exchange of information and
    techniques across bureaus will allow work to be more uniformly produced
    through ``best practices.''
        The prioritization and coordination of work between agencies will
    be enhanced through the availability of a more technically diverse and
    singularly located workforce. Should there be a project that exceeds
    the capability or capacity of any one bureau, the sister bureau will be
    able to immediately assist. This sharing of technical expertise is
    currently happening through the archeological services NPS is providing
    to FWS.
        An increase of $3.5 million is planned for equipment replacement.
    The agency justification states that a total of $3.5 million is
    proposed for allocation to narrow band radio conversion and information
    management equipment modernization.
        Question. Does this represent the total $3.5 million increase?
        Answer. The increase would be devoted to only these two areas; $3.0
    million of the additional $3.5 million would be used to initiate a
    multi-year plan to modernize NPS computer hardware and software by
    placing this equipment on a scheduled replacement cycle and allowing
    the technology used by NPS to remain current for maximum effectiveness.
    The remaining portion of the proposed increase, $500,000, would be
    devoted to the implementation and testing of the narrow band technology
    for radio communications equipment in selected parks.
        The agency reports a $75 million vehicle/equipment replacement
    backlog.
        Question. How have vehicle maintenance expenses (for vehicles
    retained past planned life) been affected by this backlog?
        Answer. The current inventory of NPS equipment fleet identifies
    passenger cars, trucks, and heavy equipment that are operating well
    beyond their designed life expectancy. As equipment nears or reaches
    this stage, fleet operational costs increase. This is due in part to
    more frequent equipment breakdowns and more expensive drive train
    components wear out and have to be replaced, all resulting in more
    frequent and costly maintenance activities. This does not include the
    staff hours lost to efficiently perform work when equipment fails to
    perform.
                             everglades restoration
        The land acquisition program for the Everglades restoration project
    states that 58,000 acres will remain to be acquired after fiscal year
    1997. A request of $63.6 million is being made for fiscal year 1998
    land acquisition. The Administration is also proposing to establish the
    Everglades Restoration Fund which is expected to result in the receipt
    of $35 million for land acquisition.
        Question. What are long-term projections for the Everglades
    Restoration Fund in terms of reducing land acquisition requests from
    regular appropriations?
        Answer. The Everglades Restoration Fund consists of two components.
    First, is the request for direct appropriations of $100 million every
    year for four years, for a total of $400 million. The President's
    Budget had requested $100 million for fiscal year 1998, with the
    remaining funding requested as an ``advance appropriation.'' The second
    component consists of revenues of about $35 million per year as a
    result of enacting a sugar marketing assessment on Florida sugar
    producers. If enacted this year, the Department estimates that about
    $35 million would be available every year to acquire lands in the
    Everglades ecosystem. At some point, this income would reduce, but not
    eliminate, the requirement for direct appropriations to protect land in
    the Everglades region.
        Restoration of the Florida Everglades and the South Florida
    Ecosystem is a high priority of the Administration. Much of the program
    emerged during a time of contentious litigation with Florida's sugar
    industry. This required the industry to contribute a total of $312
    million towards this acquisition through the Restoration Fund.
    Successful implementation of the program requires extensive
    coordination with other Federal agencies as well as State and local
    governments and industry. Plans are very ambitious and involve a major
    effort to mimic, not restore, nature's processes.
        Question. What is the current overall status of the restoration
    effort?
        Answer. The Department believes that significant achievements have
    been made since the Administration established the South Florida
    Ecosystem Restoration Task Force in 1993. Lands that have been
    identified for protection are being acquired; scientific research is
    on-going; construction of the modified water delivery project for
    Everglades National Park continues; the Task Force has been expanded to
    include State, tribal, and local representatives; the Army Corps of
    Engineers' restudy of the Central and South Florida project continues;
    and an unprecedented level of partnership among Federal, State, tribal,
    and local governments is occurring.
        Question. How well is cooperation with other agencies and private
    parties working?
        Answer. As stated above, an unprecedented level of partnership is
    occurring among all the parties to the restoration effort. At the field
    level, Federal, State, tribal, and local representatives have formed
    work teams to address numerous issues that affect the restoration
    effort. Similarly, at the Washington level, there is coordination among
    all the parties.
        The NPS portion of the Everglades Restoration effort proposes $12
    million for science in fiscal year 1998. In fiscal year 1997, $8
    million will be spent on science.
        Question. If the agency is actively engaged in a major scientific
    study effort, is it getting the ``cart before the horse'' in
    implementing this major program?
        Answer. No, studies completed to date and the consensus of Federal,
    State, and local partners in the ecosystem restoration effort indicate
    that certain actions can and must proceed immediately while some
    scientific research remains on-going. Generally, completing Federal
    land acquisition, acquiring additional land outside Federal areas, and
    completing the modified water delivery project to restore a more
    natural hydrologic flow for Everglades National Park are three
    components of the Everglades Restoration Fund that do not require
    additional scientific study. In addition, these areas also comprise the
    majority, or $88 million, of the $100 million requested for the
    Everglades Restoration Fund, with the $12 million proposed for
    scientific research comprising the remainder.
        Question. How much confidence does the Department have in the
    scientific and engineering studies made so for, to be sure the attempt
    to mimic Mother Nature will actually work?
        Answer. The Department believes that the key to success of the
    restoration effort is in our ability to understand how the natural
    system functioned in the past and how man-made changes have affected
    that system. The knowledge gained from research efforts in these areas
    will guide future management decisions in an attempt to avoid similar
    mistakes in the future. The Department has a great deal of confidence
    that such research will allow it to design future systems that will
    replicate the natural system as much as possible.
                      recreation fee demonstration project
        This program will allow the Director of the Park Service to
    disperse 20 percent of the funds collected from a specific site to be
    distributed at sites on a service-wide basis.
        Question. What criteria will be used to determine the allocation
    process for this 20 percent?
        Answer. The Director has requested all units of NPS to submit
    priority projects for funding from the 20 percent funds available from
    the total new revenue collected from the Recreation Fee Demonstration
    project. A panel will be established to review and recommend selected
    projects for the Director's approval. Once approved by NPS, the
    Department will review the proposals and approve the selected projects.
    The ``20 percent'' money will be largely targeted at parks that do not
    collect fees or are not part of the demonstration program.
        Question. How will the recent the recent storm damage in Yosemite
    affect implementation of fee demonstration plans?
        Answer. The recent storm damage in Yosemite affected the fee
    demonstration program only by causing a two month delay in implementing
    the program in Yosemite. Yosemite's visitation figures, however, are
    showing a decline that is greater than anticipated. The NPS is now
    doing a formal estimation of what this will mean to Yosemite's
    projected income, based on two full months of normal operation after
    the flood. The best current estimate is that the impacts of the flood
    will cost Yosemite nearly $2 million in returned revenue this fiscal
    year.
        Question. Please provide a project specific list for each of the
    Recreation Demonstration sites which will be accomplished under the
    program.
        Answer. At this time, the specifics of what will be accomplished
    under the program is still under review. The Park Service will provide
    this information to the Committee once final decisions are made.
        Up to 100 park sites will operate under this program.
        Question. What is the projected income from the sites designated?
        Answer. The fiscal year 1998 President's Budget estimated that NPS
    would collect about $48 million in additional revenue from parks
    participating in the demonstration program. Since the President's
    Budget was submitted, the Congress has amended the demonstration
    program by changing the base year for which the new fee revenue is
    calculated from 1995 to 1994, which would result in $12 million more in
    revenues. After the completion of the first year, NPS should be able to
    provide a more accurate estimate.
        Question. What are the priority uses for income through the fee
    demonstration program?
        Answer. The priorities of the program are the reduction of
    maintenance and resource backlogs as well as projects or activities
    that directly enhance the experience of the park visitor.
                              administrative costs
        A Department of the Interior OIG Report 96-I-1259 dated September
    1996, made five recommendations to address the issue of extended travel
    costs for Denver Service Center employees.
        Question. What is the status of implementation of those five
    recommendations?
        Answer. The OIG found that the policies and procedures of the
    Denver Service Center for extended travel of construction supervisors
    were in compliance with Federal and Department of the Interior
    requirements. However, the Inspector General found that the Denver
    Service Center did not adequately justify, or keep adequate records to
    justify operational decisions. To rectify this situation, NPS is
    reissuing its policy regarding extended travel costs. Following is more
    detail The five recommendations and the status of their implementation
    follows.
        Recommendation 1: Either ensure compliance with existing policy or
    revise the policy for extended travel to include consideration of other
    relevant and appropriate factors.
        Recently, all Denver Service Center employees received a copy of
    the reissued policy in the form of DSC Guideline 97-01.
        Recommendation 2: Develop procedures for estimating the cost of per
    diem versus the cost of employee relocation.
        DSC Guideline 97-01 contains procedures for estimating the cost of
    per diem versus the cost of employee relocation.
        Recommendation 3: Document the specific considerations that
    resulted in the determination to either pay per diem or relocate
    construction supervisors.
        DSC Guideline 97-01 requires Construction Quality Leaders to
    prepare a ``Record of Decision'' form to document the decision-making
    process of whether to execute a permanent change of station move or to
    place an employee on extended duty when the duration of an assignment
    is expected to exceed two years. Factors to be considered include cost,
    human, and business/project factors. No one factor is more important
    than another.
        Recommendation 4: Develop and implement procedures for authorizing
    per diem rates that consider actual expense levels at the specific
    locations of travel.
        DSC Guideline 97-01 requires that per diem rates are computed under
    the lodgings-plus per diem system with the total not to exceed the
    applicable maximum per diem rate for the location. DSC Guideline 97-01
    provides a flat rate for meals and incidental expenses that will be
    reviewed and reestablished every two years. Employees are responsible
    for obtaining lodging and for documenting their search, investigating a
    minimum of three equivalent lodging units. This procedure will
    determine the lodging flat rate for the location. Every six months the
    employee must certify that their costs have not been reduced. When an
    employee moves, their circumstances change, or an adjustment is
    requested, the same procedure will be followed to verify the applicable
    per diem rate.
        Recommendation 5: Require travelers either to note annual leave
    taken on the travel voucher or to certify ``no leave taken.'' on the
    voucher.
        DSC Guideline 97-01 requires the recommended certification.
        The agency recently went through a downsizing exercise and buyout
    program.
        Question. For the hearing record will you provide the Committee
    with a detailed analysis of the cost savings which have occurred as a
    result of the NPS reorganization?
        Answer. The NPS reorganization resulted in streamlined and
    reengineered administrative processes and downsized central offices.
    Since fiscal year 1993, NPS estimates that it has achieved annual
    operational savings of approximately $31.5 million through these
    efforts. These annual savings have been shifted over the last four
    years, through both the President's Budget requests and Congressional
    appropriations, to help support the additional park and program
    increases that have been appropriated to NPS.
        Question. How many central office positions were transferred to
    individual park units?
        Answer. Since fiscal year 1994 central office FTE have been reduced
    by over 20 percent while available park-based FTE allocations have
    increased by about 1,100, allowing more staff at the operational level
    while keeping overall NPS FTE levels stable. This includes 264
    employees transferring from central office positions to fill vacancies
    in park areas through Operation Opportunity--a program developed at the
    time of the implementation of our reorganization.
        Question. How many positions were vacated as a result of the buyout
    and early retirement incentive programs?
        Answer. In 1994 and 1995, 868 employees took advantage of the
    buyouts offered. The survival of pre-reorganization or pre-buyout
    positions cannot be tracked for two reasons. At NPS central offices,
    where 528 of the buyouts occurred, a job vacated by a buyout was
    allowed to be refilled as long as another central office position was
    not. Simultaneously, the reorganization caused changes to many position
    designations causing situations where certain positions were
    ``vacated'', but not because of downsizing.
        Question. How much money will be expended in the buyout and early
    retirement incentive program for NPS?
        Answer. The cost NPS will incur to cover the Voluntary Separation
    Incentive Payments and the nine percent early-out charge for those
    taking the buyout offer will be approximately $22.1 million. This is a
    one-time only cost.
        Question. Is the composition of the NPS headquarters and regional
    offices as lean as it should be?
        Answer. The NPS continues to analyze reengineering possibilities
    and make additional reductions where possible.
        In total, the agency proposes to add 440 FTE's to the workforce.
        Question. Please stratify these positions for the record in terms
    of field, regional, and headquarters employees.
        Answer. The 440 FTE's would be distributed as follows:

    Adding 440 FTE's to the workforce

    Field.............................................................   376
    Regional..........................................................    36
    Headquarters......................................................    28
                            -----------------------------------------------------------------
                            ________________________________________________
          Total.......................................................   440

                              parkway divestiture
        A September 11, 1996, report from the agency acknowledges that
    Maryland and Virginia strongly oppose a ``plan in its present form'' to
    divest four parkways in the greater Washington area. Specific standards
    for continued management of the Parkways are contained in the present
    divestiture plan.
        Question. What proposed standards could be relaxed to make the
    divestiture more appealing to Virginia and Maryland?
        Answer. All of the standards contained in the proposed conditions
    of transfer are essential to ensure that management of these parkways
    meet the legislative intent that they serve as scenic gateways to the
    Nation's Capital. In our judgment, the States were not objecting to the
    standards as much as they were concerned about the maintenance costs,
    and the feeling that these roads should be a Federal responsibility as
    part of the park system of the Nation's Capital.
        Question. What portion of United States Park Police staffing is
    directly attributable to traffic enforcement on the major parkways in
    the suburban parkways of Washington DC?
        Answer. The U.S. Park Police assigned to the Glen Echo, Greenbelt,
    and the Anacostia Stations provide law enforcement services to the
    George Washington Memorial Parkway, Clara Barton Parkway, Baltimore-
    Washington Parkway, and Suitland Parkway 24 hours a day. Each police
    cruiser beat requires 5.3 FTE to maintain 24 hour-per-day coverage.
        Three police cruiser beats are assigned to patrol the George
    Washington Memorial Parkway and the Clara Barton Parkway. In addition,
    five sergeants assigned to the Glen Echo Station, dedicated to
    supervising law enforcement activities on the parkways, assist in the
    patrols. Furthermore, in an effort to reduce excessive speeding that
    has led to serious traffic accidents along George Washington Memorial
    Parkway, the U.S. Park Police has redirected existing resources on an
    intermittent basis to provide increased coverage, especially during
    peak traffic hours. Two primary police cruiser beats are assigned to
    patrol the Baltimore-Washington Parkway. Due to extensive long-term
    highway construction, three additional officers are being used to
    supplement traffic enforcement efforts, eight hours per day. In
    addition, four sergeants assigned to the Greenbelt Station, dedicated
    to supervising law enforcement activities on the parkway, assist in the
    patrols.
        One cruiser beat is assigned to patrol the Suitland Parkway. Five
    sergeants from the Anacostia Station, who provide necessary supervision
    of officers assigned to the parkway as well as other areas within the
    confines of the station, assist in the patrols.
        Question. If divestiture occurs, what will happen to these
    positions?
        Answer. If divestiture of the four parkways were to occur, the U.S.
    Park Police would reassign the previously mentioned parkway positions
    to other areas within the force. With the ever-increasing drug and
    criminal problems within our Nation's Capital and the increased
    responsibilities of new memorials and other areas within the District
    of Columbia, these positions would be effectively utilized.
                             U.S. Geological Survey
                                  program base
        According to the budget proposal, the U.S. Geological Survey (USGS)
    will be required to absorb fiscal year 1998 uncontrollable
    administrative increases, which are estimated at a minimum of
    $11,895,000, from within their current program base. No other Interior
    Department agency funded through this bill has been required to meet
    additional costs of this same magnitude from within its current program
    base.
        Question. How was the determination made to propose funding
    uncontrollable increases for some agencies, such as BLM, NPS and the
    Bureau of Indian Affairs, but not USGS?
        Answer. In an optimum budget with unlimited resources, each of the
    bureaus would request increases for uncontrollable costs. The
    Department began the formulation process for fiscal year 1998 with that
    goal in mind, but the realities of balancing the budget forced
    difficult choices about priorities for program increases and overall
    funding levels for individual bureaus. As a result, some bureaus were
    able to cover uncontrollable costs with funding increases and others
    were not. The USGS presentation of uncontrollable costs is different
    from other bureaus because USGS elected to show their uncontrollable
    costs as non-adds rather than show the specific program reductions. It
    must be noted that regardless of the display methodology used, these
    are real costs that must be paid by all agencies of the Department in
    1998.
        In addition to absorbing uncontrollable increases, current program
    levels are proposed to be reduced further in fiscal year 1998 in order
    to offset funding for new program proposals, such as the Kalamazoo
    Project (+$9 million). A significant increase for the Global Seismic
    Network (GSN), a relatively new program, is also offset from the
    current program base; the fiscal year 1997 appropriation for the GSN is
    $800,000, with a proposed increase of $3 million in fiscal year 1998.
        Question. Why isn't there greater emphasis on enhancing traditional
    USGS programs? Are these programs now funded at sufficient levels to
    accomplish their purposes? Or is there a need to redefine the programs
    that comprise the Survey's core that is represented by the budget
    request?
        Answer. Research conducted by USGS is not static; programs
    continually adapt and change to respond to emergency needs brought on
    by natural disasters, changing priorities of its clientele, and
    increased basic operating costs. Shrinking budget levels and the need
    to balance the Federal budget have created an environment in which
    managers and agency directors are forced to do more (and, in some
    cases, less) with fewer resources. They attempt to find programs and
    functions that can be eliminated or carried out in a new manner,
    thereby allowing for the redirection of funds to higher priority
    programs. In many instances, the proposed decreases in the fiscal year
    1998 budget reflect estimated savings achieved under efforts to further
    Phase II of the National Performance Review goals of Reinventing
    Government (REGO II). As a result, USGS carries out program reviews and
    strategic planning to ensure an appropriate level of funding, so that
    its programs continue to provide credible and impartial information
    relevant to society's needs. There is no need to redefine the programs
    that comprise USGS' core represented by the budget request, because
    each budget submission of USGS portrays the changing nature of USGS
    science programs.
        Buyouts and reductions-in-force have reduced the ranks of the USGS
    by over 1,000 people since 1994. In July of 1995, USGS indicated to the
    Subcommittee its concern that the division's ability to carry out its
    programmatic responsibility had been severely eroded by absorption of
    salary and other fixed costs.
        Question. Inasmuch as the program base is proposed for further
    reductions through the continued absorption of fixed costs and new
    programs, please comment on the current ability of USGS to fulfill its
    mandate.
        Answer. In the past five years USGS has absorbed over $43 million
    in uncontrollable costs. The USGS has sought to deal with the effects
    of this absorption, as other bureaus have--by streamlining processes,
    by working more efficiently, and by setting priorities. In recent
    years, USGS has also had to conduct a Reduction-in-Force, pursue buyout
    relief, defer recruitment, defer replacement of equipment, and reduce
    travel and training in order to sustain operations at levels sufficient
    to carry out programmatic responsibilities. In fiscal year 1998 another
    $12 million is proposed to be absorbed, with attendant impacts on
    program quality, timeliness, and output. The following are examples of
    the types of impacts to programs that can be expected from continued
    absorption of uncontrollables.
      --Decline in timeliness and geographic extent of data collection and
            deferred modernization and upgrade of monitoring networks
            impacting availability of information for flood warning, water
            quality assessments, and geologic hazards assessments of
            earthquakes, volcanoes, and landslides.
      --Reduction in the amount of geospatial data and satellite imagery
            that can be acquired, integrated, and made available to users
            each year to help resolve environmental and land and resource
            management issues facing the Nation.
      --Reduction in the amount of effort to implement national digital
            data bases further delaying implementation of accessible,
            standardized frameworks of data.
      --Decline in the number of research and development investigations,
            reducing the USGS ability to address emerging national problems
            and future needs of local, State, and other Federal Government
            agencies.
      --Reduction in work with partner agencies and organizations in
            developing scientific information and management tools to
            enable wise use of resources.
                            national mapping program
        An $850,000 reduction in research for the National Mapping Program
    is proposed for the purpose of advancing REGO II goals. Funds will be
    redirected to higher priority programs in other divisions. The
    reduction modifies the mapping program's operational management
    strategy so that the original plan for relational data implementation
    will be postponed.
        Question. How does the postponement of this work advance REGO II?
        Answer. The proposed $850,000 decrease represents an acceleration
    of anticipated REGO II savings which were originally scheduled for
    fiscal year 1999 and 2000. The decrease will delay implementation of a
    standard relational database management system for program operations.
    Savings from REGO II are expected to result from efficiencies gained
    through public access of cartographic data and products via the
    Internet. New Internet access capabilities have allowed the public to
    investigate USGS data holdings, determine the availability and
    characteristics of the data being sought, and arrange for delivery of
    the data, usually instantaneously, without the need for USGS personnel
    to assist in the process. This new mechanism saves the need to produce
    search materials and operate search mechanisms, saves salary and
    related costs for personnel no longer needed to operate the systems,
    and saves costly computer processing times, materials, and mailing
    expanses to retrieve, replicate, and transmit data to customers.
        $1.2 million of the National Mapping Program's budget is proposed
    to be refocused for the Urban Dynamics project, a three year program
    scheduled to begin in fiscal year 1998.
        Question. What programs are being reduced or have been completed in
    order to begin this initiative?
        Answer. The redirection of $1.2 million to increase work on urban
    dynamics will result in curtailment of research projects that support
    the data programs of the National Mapping Division. These programs
    focus on improving existing production methods, supporting the
    development of new spatial data products, and improving the methods of
    spatial data acquisition and integration.
        The other major area of research activity within the National
    Mapping Program, data applications development, has no flexibility for
    adjustment, and is a higher priority activity because of its direct
    support of customer requirements for methods to use geographic data in
    addressing issues of national importance related to the environment,
    resource management, and socio-economic topics. Production system
    maintenance and computer support activities also are not adjustable
    because the National Mapping Program hardware and software systems are
    dependent upon them and because of their direct linkage into the
    private sector, which provides most of the services in these areas.
        Question. How was it determined which four metropolitan areas would
    be the focus of the program?
        Answer. The four cities were selected from the American Farmland
    Trust (NFT) list of high priority cities where urbanization threatens
    agricultural land. Further refinement of the list was done by examining
    cities where there was concern for impacts on ecological diversity in
    very different ecological regions. Specific city selections had
    additional regional criteria as well. Philadelphia and New York were
    then identified as major urban areas that would continue the work
    started in the Washington/Baltimore area. Chicago was identified as a
    critical mid-western city that met the NFT and ecological criteria.
    Portland, Oregon was selected because the effect of different land use
    planning models being used in Washington and Oregon can be compared in
    subsequent research. All cities were chosen to meet multiple criteria
    important for geographic research.
        The National Mapping Program has complied with the Congressional
    directive to increase its use of contractor services for data
    collection and integration.
        Question. Please comment on the results of this action to date.
        Answer. The USGS has increased the level of contracting for
    services in map and digital production by a third over the levels of
    fiscal year 1996. This represents nearly a doubling of the fiscal year
    1995 level. Contracting has extended the capacity for several data
    categories of the National Mapping Program.
        Developing successful contracting partnerships has required a
    significant investment of USGS resources. Some delivery schedules have
    slipped as new contractors adapt to USGS product and quality
    requirements. The USGS has had to curtail spending on other efforts to
    redirect funds to production contracting, thus reducing programmatic
    flexibility. The National Mapping Program will continue to pursue a
    policy of contracting with the private sector throughout the program
    and in all areas where it is in the best interests of the Government to
    do so.
        Last year, Congress included funds to assist USGS in preparing an
    Electronic Atlas of the United States.
        Question. Please report on the progress of this project.
        Answer. Significant progress has been made on the electronic
    National Atlas of the United States in fiscal year 1997.
    Accomplishments during fiscal year 1997 included initial development of
    a suite of National Atlas products, development of a prototype,
    conducting market research activities, developing atlas products for
    the World Wide Web (WWW), and seeking private sector partners.
        The USGS has completed the revision of basic digital map layers
    such as boundaries, highways, and streams for the entire country. These
    data have been compiled according to exacting standards so that they
    will serve as an accurate and reliable framework for the integration of
    thematic data sets, such as geology, soils, major groundwater
    reservoirs, and demographic information. Work has begun on integrating
    thematic data from the U.S. Bureau of the Census and the National
    Center for Health Statistics.
        The USGS has also completed an electronic prototype that
    demonstrates the vast potential of the National Atlas. Prototype
    development provided an opportunity to investigate the integration of
    multimedia software with geographic information systems capabilities as
    well as an opportunity to experiment with differing graphical user
    interfaces. The National Atlas prototype has been demonstrated to
    prospective partners in Government and the private sector. It will be
    used to assess consumer attitudes towards the National Atlas in focus
    groups scheduled for later this summer. The USGS has also initiated
    work on several map prototypes that will be available for customer
    assessment during the first quarter of fiscal year 1998.
        The USGS has begun other market research activities that will help
    to determine the initial content and functional capabilities of the
    National Atlas and support the production of a comprehensive and
    cohesive marketing plan for all National Atlas products. These
    activities include a comparative assessment of atlas-like products
    currently marketed, point-of-sales tracking for these products, focus
    groups, and customer surveys to aid in focusing product development.
        We are currently developing National Atlas products for the WWW.
    These include information products such as fact sheets, promotional
    materials, and project status reports. Also under development is a
    basic geographic information system capability that allows WWW users to
    select, symbolize, view, and query the data collected by this project.
    The WWW will be used to deliver National Atlas data and provide access
    to other sources for local, more detailed data and information. The WWW
    site for the National Atlas will be fully operational during the third
    quarter of fiscal year 1997.
        The USGS has sought the participation of private sector partners to
    ensure the success of the National Atlas. The USGS has held discussions
    with companies involved in software development, market research,
    publishing, and product distribution. At present, USGS has formed a
    partnership with Environmental Systems Research Institute of Redlands,
    CA, to develop the National Atlas WWW prototype. This cooperative
    research and development agreement will expand to include development
    activities that exploit emerging technologies for managing large
    digital cartographic data sets and for serving map products via the
    WWW.
        Question. How much is included in the fiscal year 1998 base to
    continue work on this project?
        Answer. There is $2.0 million included in the fiscal year 1998 base
    to continue work on this project.
                             global seismic network
        The GSN is proposed to receive an increase of $3 million to its
    current base of $800,000 in order to begin the operation and
    maintenance phase of the program. The GSN is part of an international
    monitoring system being developed to verify compliance with the
    recently signed Comprehensive Test Ban Treaty.
        Question. Specifically what will the proposed increase be applied
    to? What enhancements, if any, are anticipated to the GSN and how will
    long-term operation and maintenance costs be affected?
        Answer. The proposed increase of $3.0 million for fiscal year 1998
    will be spent in the following manner: 1) $1.7 million is for network
    deployment and support. This involves the preparation and testing of
    new equipment at the Albuquerque Seismological Laboratory remote
    diagnosis of equipment problems, and repair of equipment malfunctions;
    2) $200 thousand is for routine maintenance visits to USGS-operated GSN
    sites within the U.S. and its territories; and 3) $1.1 million is for
    data management and quality control. This involves shipment of data,
    extensive quality control, data archival, and reformatting of raw data
    for dissemination to users.
        The GSN currently consists of 107 stations of which USGS maintains
    77. When fully implemented, the GSN will have approximately 150
    stations for which USGS will have operational responsibility for 106.
    Funds currently spent on testing and deployment of new equipment will
    be shifted to network maintenance and support as the network is
    completed.
        Question. What agencies will be responsible for interpreting the
    data collected by USGS relating to implementation of the nuclear test
    ban treaty? Will USGS be reimbursed for their costs by these customers?
    Can the network eventually become self-sustaining?
        Answer. The International Monitoring System (IMS) defined by the
    test ban treaty will consist of 50 primary seismic stations, 120
    auxiliary seismic stations, and other technical sensors. The auxiliary
    stations are to be used to clarify the nature of events detected and
    located by the primary network. The GSN contains 69 of the auxiliary
    seismic stations. The Air Force Technical Applications Center (AFTAC)
    is responsible for the interpretation of all IMS data. Additionally,
    GSN data are used in treaty related research programs supported by the
    Department of Defense (DOD) and the Department of Energy (DOE). Because
    of initial capital investment in the GSN program by DOD and DOE, USGS
    does not expect to be reimbursed by these agencies for their use of GSN
    data.
        The GSN is also supported in part by each of the host countries.
    They provide the local infrastructure required to keep the stations
    running. Nevertheless, because of the technical complexity of GSN
    stations, a central maintenance and support facility is also required
    for operation of the network. The USGS does not expect the network to
    become self-sustaining.
        The Office of Science and Technology Policy (OSTP) reviewed the GSN
    funding issue in November 1995. As a result of this review, OSTP
    recommended that funding for the GSN should not be placed in DOD, but
    rather within the budgets of USGS and the National Science Foundation
    (NSF).
        Question. How much and in what ways are other partners in the
    International Monitoring System contributing to the project? Why will
    USGS bear the responsibility for funding the operation of this network?
        Answer. The NSF has provided substantial funding to USGS to install
    GSN stations. The NSF will continue to provide funds for the operation
    of those GSN stations not installed by USGS. It is appropriate for USGS
    and NSF to bear the responsibility for operating this network because
    its primary use is in the routine reporting and characterization of
    earthquakes and in research. The USGS' National Earthquake Information
    Center analyzes GSN data on a daily basis to determine the location,
    depth, magnitude, and ``source mechanism'' of large earthquakes
    worldwide. These results are usually obtained within an hour or less of
    the occurrence of the event. These results are used in emergency
    response and to determine if an earthquake is likely to have generated
    a tsunami which may affect coastal regions of the Pacific Northwest,
    Alaska, and Hawaii.
        Data from GSN also are used in research for scientific exploration
    of the Earth's interior and for studies of the earthquake sources. For
    example, the recent discovery of the differential rotation rate between
    the Earth's inner and outer cores was based, in part, on data from GSN.
    This discovery is a major advance in understanding the source and
    nature of the Earth's magnetic field. Data on the source mechanisms of
    earthquakes worldwide, particularly those occurring in the middle of
    continents, can be applied to the understanding of earthquake hazards
    in the United States.
        The GSN is a multiple-use activity. Data from GSN are used for
    disaster warning and response, research on earthquake and the interior
    of the Earth, and in arms control research and monitoring. The primary
    users of the data are USGS and the academic community and thus it is
    appropriate that USGS and NSF assume responsibility for the operation
    of GSN.
        Question. To what extent have defense and intelligence-related
    functions traditionally been performed by USGS? Does USGS anticipate a
    greater program emphasis in these directions in the future?
        Answer. Since World War II, USGS has been involved in varying
    degrees in defense and intelligence-related functions. Most of this
    involvement has been in the collection and interpretation of geological
    and geophysical data from foreign sites. Generally it has been on a
    reimbursable basis but in some cases cost sharing has been applied
    where mutual program benefits are identified. Most of the work is done
    in-house, but USGS personnel have been assigned to other agencies for
    extended periods for specific purposes. During the past decade, USGS
    has made increasing use of data collected for defense and intelligence
    purposes in the revision of topographic maps, geologic mapping, and in
    assessments of natural hazards, mineral resources, and environmental
    changes.
        Although USGS does not plan greater program emphasis on traditional
    defense and intelligence roles, it expects and welcomes an expansion of
    data sharing with these communities. In some cases, such as in the
    collection of satellite imagery data, the defense and intelligence
    communities carry the major costs of data acquisition. In other cases
    where USGS interests prevail, costs of data collection are borne by
    USGS.
                 national cooperative geologic mapping program
        In order to fund higher priority programs, a program reduction of
    $1,726,000 to the National Cooperative Geologic Mapping program is
    proposed. It would be disbursed among the three program components as
    follows: -$1,346,000 to the FEDMAP program; -$345,000 to the STATEMAP
    program; and -$35,000 to the EDMAP program.
        The budget request could not provide information on the effects of
    decreases to the STATEMAP and EDMAP programs.
        Question. Why was the decision made to reduce these programs when
    the impact of the reductions cannot be assessed?
        Answer. The general impacts can be assessed; however because
    STATEMAP and EDMAP activities are based on annual proposals, the
    specifics cannot be determined until after the individual State mapping
    advisory panels meet this summer and the national awards panels meet
    during the late Fall of 1997. The STATEMAP awards committee consists of
    five representatives from State geological surveys, three USGS
    scientists, and the coordinator of the program's external funds. The
    EDMAP awards committee consists of three University professors, two
    State Geologists, and the coordinator of the program's external funds.
    The general impact of the decrease is the equivalent of funding four
    fewer cooperative projects with State surveys (STATEMAP) and four fewer
    cooperative projects with universities (EDMAP).
        The FEDMAP program decrease would delay or terminate projects
    engaged in mapping earthquake faults, urban geology and risks
    associated with geologic hazards, along with a number of others.
    Dissemination of geologic map information would also be curtailed.
        Question. What factors led to the decision to reduce this
    particular program? Why don't the activities accomplished with these
    funds merit a priority?
        Answer. Difficult decisions were required in order to meet target
    allowances associated with formulating the fiscal year 1998 budget. In
    addition, within the geologic programs of USGS, decisions are made
    within the context of the recent Reduction-in-Force which was
    undertaken to correct a decade long problem of excessive personnel
    costs, the absence of operating funding, and the inability to carry out
    a financially balanced program. Based on these experiences, the
    decision was made to achieve the allowed funding level for fiscal year
    1998 through cutbacks in a limited number of programs. This approach
    enables preservation of the financial viability of remaining programs
    as opposed to spreading these cutbacks across all programs and thereby
    eroding the financial balance that was achieved through the Reduction-
    in-Force.
        This proposed reduction does not suggest that USGS considers
    geologic mapping to be a low-priority activity. In addition to
    construction of a digital National Geologic Map Data Base, the National
    Cooperative Geologic Mapping Program is conducting geologic mapping to
    address pressing issues related to natural hazards, water resources and
    quality, land-use planning, urban geology, and non-renewable resources.
    The program's activities are focused mainly on urban corridors in
    Washington-Oregon, California-Nevada, New Mexico, Colorado, Nebraska-
    Iowa, Kansas-Missouri, Georgia, South Carolina, Virginia-Maryland,
    Vermont, Florida, and Alaska. Priorities for FEDMAP projects are set in
    partnership with other Federal, State, and local agencies and industry.
    During the past year, the program has sponsored regional workshops to
    assess geologic mapping needs in the East, upper Mid-West, and West.
        In addition, the program funds cooperative geologic mapping
    projects with State surveys and universities in more than 40 States on
    an annual basis. Significant funding would remain in the National
    Cooperative Geologic Mapping Program to support the continuation of a
    number of important projects, although the program be downsized to
    match the proposed reduced funding level.
                              continental surveys
        The continental surveys program is slotted for elimination and its
    funding of $2,848,000 proposed to be used for higher priority programs.
    Results of the interdisciplinary research accomplished by this program
    are used by other USGS programs to help assess alterations of the
    earth's surface, earthquake hazards, volcano hazards, and petroleum
    energy resources. It is proposed in the budget request that, when
    feasible, some activities will be integrated into other USGS programs.
        Question. Is there currently a determination of what activities
    will be continued in other programs? If so, please explain.
        Answer. Program and financial plans for fiscal year 1998 are being
    prepared this summer. Through this planning process opportunities to
    absorb staff and functions of Continental Surveys in other geologic
    programs will be thoroughly explored.
        The budget proposal does not specifically address the merits or
    lack of them that resulted in the proposed elimination of the
    continental surveys program.
        Question. Please provide the Committee with the rationale for this
    action.
        Answer. One aspect of the REGO II exercise conducted two years ago
    required the identification of program areas for termination. Because
    the Continental Surveys Program was conducting research and
    investigations supportive of other USGS programs it was selected for
    elimination on the grounds that these other programs might be able to
    absorb some of these activities.
                               kalamazoo project
        The Kalamazoo project proposes to use $9 million in new budget
    authority within the National Water Quality Assessment program to
    implement the President's announcement of an initiative last August to
    improve a community's knowledge about the quality of its water supplies
    and increase its ability to protect this resource. Offsetting
    reductions were taken in other USGS projects in order to absorb the
    proposed increase.
        Funds for this project were not requested by USGS or the
    Department, but were included by OMB in the final budget proposal
    submitted to Congress.
        Question. Please explain.
        Answer. The Kalamazoo Initiative was introduced by the President in
    August 1996, too late to be included in the USGS budget submission to
    the Department or OMB. Although this initiative was a Presidential
    initiative which did not originate at USGS, the USGS strategic plan
    states that USGS will increase emphasis on ``studies involving
    population centers, quality, and accessibility of resources''. Further,
    the strategic plan identifies Environmental Effects on Human Health as
    an integral business activity of USGS. The President's Initiative is
    consistent with these provisions of the plan.
        Question. How do you justify decreasing already reduced programs
    further in order to accommodate a new start?
        Answer. The Administration places a high priority on the public's
    ``right to know'' what is in its drinking water, which is addressed
    directly by this initiative. But in order to fund this work within a
    shrinking Federal budget, it is necessary to provide partially
    offsetting decreases from other programs.
        As presented on page 164 of the budget proposal, there are five
    distinct components of this initiative.
        Question. Please explain how much of the $9 million will be
    allocated for each component.
        Answer. Allocation of funding among the five components of the
    Kalamazoo Initiative will change over the course of the planned four-
    year effort. Emphasis the first year will be on assembling existing
    information and identifying information gaps. Additionally, efforts in
    the first year will build the linkages necessary for easy public access
    to the data and information. In subsequent years with data gaps
    identified, much more of the funding will focus on collecting
    additional samples, expanding the available data on source water
    quality. For data collection activities to be effective and efficient
    in the out-years, a thorough analysis of existing information is
    planned the first year. Resulting funding allocations for fiscal year
    1998 are:

    Funding allocations for fiscal year 1998

                                                                    Millions
    Analyze existing information, design data base, build public
        access........................................................  $5.6
    Develop fact sheets summarizing current knowledge.................   1.0
    Augment some existing NAWQA sampling in urban areas...............   1.0
    Identify and sample new streams and aquifers......................    .5
    Enhance existing research capabilities for contaminants...........    .9
                            -----------------------------------------------------------------
                            ________________________________________________
          Total...................................................       9.0

        A major emphasis of the program is dissemination of information to
    the general public through published fact sheets, as well as a Web
    Site, in order to meet the American public's right to know.
        Question. Is water quality assessment information currently
    reaching experts at the Federal, State, and local levels where
    productive work can be accomplished to effect change?
        Answer. In addition to describing the status and trends in the
    quality of the Nation's waters, and understanding the natural and human
    factors affecting water-quality conditions; the third goal of the
    National Water Quality Assessment Program (NAWQA) is providing
    information to Federal, State, and local water-resource managers. There
    are liaison committees for each of the 36 study units begun in either
    1991 or 1994. These liaison committees include more than 800
    representatives of Federal, State, local agencies, and non-governmental
    organizations. At the national level there is also a Federal and non-
    Federal Advisory Council with more than 50 members. These committees
    meet annually. An example of recent impact can be found in Washington
    and New Jersey. Using USGS information on the vulnerability of shallow
    aquifers to pesticide contamination, the regulatory agencies in these
    two States instituted waivers (from Safe Drinking Water Act
    requirements) on source water sampling where the pesticide
    contamination risk was low. Each State saves about $5 million annually.
    The Kalamazoo Initiative will provide for expanding communication with
    more managers in geographic locations beyond NAWQA study units.
        This project is intended to be a collaborative effort with the EPA
    and National Oceanic and Atmospheric Administration (NOAA).
        Question. How much is each of the other agencies proposed to
    contribute? What will their roles be? What are the anticipated costs
    for this program in future years for USGS and its Federal partners?
        Answer. Each agency would have a different responsibility under the
    Initiative. The USGS ($9.0 million) will provide information on the
    character of drinking water sources and how the quality varies
    temporally and geographically. The EPA ($35.0 million) will work with
    cities serving information to the public on water conditions in the
    urban area, including toxic release information, types of water
    treatment for municipal supply, and impacts of the water delivery
    system infrastructure which partly determines the quality of water
    consumed. The NOAA ($4.0 million) will evaluate the impact of cities on
    coastal water resources, and provide information to the public on beach
    and shell fish bed closures. In summary, USGS would work with the
    source water, EPA would focus on treated water consumed by the public,
    and NOAA would address the impacts of cities on coastal areas. Outyear
    estimates for each agency are:

                                            OUTYEAR ESTIMATES FOR EACH AGENCY
                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                               Fiscal year--
                                                     ---------------------------------------------------------------
                                                           1998            1999            2000            2001
    ----------------------------------------------------------------------------------------------------------------
    USGS............................................               9              12              12              12
    EPA.............................................              35              35              35              35
    NOAA............................................               4               3               2               2
                                                     ---------------------------------------------------------------
          Federal total.............................              48              50              49              49
    ----------------------------------------------------------------------------------------------------------------

        Question. What steps have been taken to assure that this proposal
    will not duplicate work already being done at the State and local
    levels, or by other Federal agencies? Is there a consistent set of data
    standards to which State and local agencies adhere currently?
        Answer. At the Federal level, this proposal is coordinated with
    major water-quality activities of EPA. The USGS effort will build on
    and expand efforts underway at EPA. Through its network of
    communication with over 1,100 State and local cooperators across the
    country, USGS will ensure that this initiative does not duplicate
    existing efforts. Further, across the country, consistent data
    standards have not been adopted at the State and local level. That was
    one of the reasons for initiating the NAWQA Program, and it remains the
    reason why the Program's results are of high interest to national
    organizations. Because this initiative will not duplicate existing
    efforts locally, work under the Initiative will have varying emphasis;
    however, no matter the emphasis, the approach and methods will be
    nationally consistent. In some locations the emphasis may be on
    disinfection by product precursors, and in other areas the emphasis
    could be on arsenic; consistent national methods will be used in either
    case.
                               acid rain program
        The acid rain program is proposed to be discontinued as an isolated
    monitoring program in fiscal year 1998. Its current funding level is
    $1,657,000. Some of the deposition monitoring activities of this
    program will be incorporated into the National Water Quality Assessment
    program.
        Question. Which of the activities in the acid rain program will be
    discontinued altogether?
        Answer. The USGS remains committed to its role as the lead Federal
    agency for the monitoring of atmospheric deposition. There are no
    immediate plans to change funding support for acid rain monitoring or
    to alter activities at any of the 71 USGS monitoring stations currently
    funded by the Acid Rain Program. Any changes in program composition
    based on this consolidation of programs will affect core NAWQA
    activities, rather than acid rain activities. The USGS will continue
    working closely with many other Federal, State, and local partners in
    the National Atmospheric Deposition Program (NADP) to ensure that the
    network continues to produce high-quality, relevant, and timely
    information needed for policy decisions on many critical environmental
    issues, and that any proposed modifications to USGS monitoring network
    arising from effects of inflation or future budget constraints will be
    fully coordinated with the multi-agency NADP.
        Question. If NAWQA is capable of assuming a number of this
    program's activities without additional funding, why hasn't this
    consolidation been proposed before now?
        Answer. There are three reasons why the change occurred in fiscal
    year 1998: 1) funding for the Acid Rain Program is slated for
    elimination in fiscal year 1998 as part of REGO II; 2) in fiscal year
    1998, the Acid Rain Program would have been eliminated as a separate
    line item as part of a budget restructuring process; and 3) the
    importance of atmospheric contributions to the quality of ground water
    and surface water being studied in the NAWQA program has become
    increasingly important, so that only recently have the benefits of
    incorporating the two programs become obvious.
                    federal-state cooperative water program
        A decrease of $1,214,000 is proposed for the Federal-State
    Cooperative Water Program. In terms of data collection, all activities
    at 120 streamflow gaging stations would cease. Additionally, the budget
    notes that important water supply and contamination issues would not
    begin as a result of this decrease.
        Question. Are any of the stations proposed for closure among those
    that were damaged in recent floods? If so, were replacement funds
    included as part of the current supplemental request?
        Answer. The stations which would be closed as a result of the
    proposed reduction in the Cooperative Program for fiscal year 1998 have
    not yet been identified. Since the stations supported by this program
    are funded by a combination of Federal appropriations and State
    matching funds, USGS will need to consult with its State and local
    cooperators to determine which stations should be closed. This
    consultation is necessary to ensure that the hydrologic information
    needs of State and local government agencies who participate in the
    Cooperative Program will continue to be met, to the fullest extent
    possible, despite the station closures.
        Question. Why doesn't the work produced through this program merit
    sufficient priority to receive continued funding?
        Answer. The funding proposal is not a judgment on the merits of
    this program. In these times when the Federal budget is under tight
    fiscal constraint, the reduction is proposed as one of several
    decreases to partially offset the increase for the Kalamazoo Initiative
    (to provide the public with information on the quality of their
    drinking water sources). Within the current fiscal climate, difficult
    decisions had to be made to accommodate new work, often at the expense
    of other programs.
                      water resources research institutes
        A proposed budget reduction of $2,803,000 could result in the
    closure of institutes that cannot find a replacement for Federal funds.
    About one-third of the institutes now receive all or most of their
    funding from this appropriation and its matching funds. This reduction
    would also result in a loss of some data collections activities and
    interpretive studies dealing with water management issues.
        Question. Please explain the reasons used to determine that this
    program lacks the priority of others.
        Answer. The Institutes Program, though very important, supports
    USGS core mission less than other funded programs. By design, the
    programs of the Institutes are to be focused on priority needs of the
    States and are not required to contribute to national data bases or
    resolve multi-State water issues. Funding from the States and from
    Federal agencies such as the NSF, EPA, and Department of Agriculture,
    along with specific project-related funding from USGS, will continue to
    support water science in the States.
        Since there are alternatives for funding water science which
    addresses issues of specific concern to the States, and since there is
    no alternative for funding the types of work that are done in-house at
    USGS, the Administration's priorities lie in ensuring continued support
    for long-term research and monitoring activities that take a national
    perspective. These activities cannot be undertaken by the States or by
    academia because there is no national infrastructure to support such
    work at the State or local level. In addition, there is no other single
    Federal agency which has the interdisciplinary scientific expertise to
    carry out an integrated national program of water resources research
    and monitoring.
                          biological research division
        Question. Please comment on the consolidation of the Biological
    Resource Division's functions into the USGS. What problems, if any,
    have been encountered?
        Answer. The consolidation of the functions of the former National
    Biological Service (NBS) into USGS as BRD is largely complete. This is
    the second fiscal year that USGS and the former NBS budget
    presentations are combined in budget to Congress. Administrative and
    personnel functions are being merged in line with the schedule
    presented in the USGS/NBS Steering Committee Merger report that was
    completed in late 1996. For instance, the Washington area BRD staff
    moved into the USGS National Center in Reston in September 1996.
    Science programs are being integrated through both day-to-day research
    and in planning for future inter-divisional science initiatives. These
    efforts are applying the strengths of traditional USGS culture with
    those of NBS to develop improved, integrated, and efficient Bureauwide
    procedures.
        Question. Are the Interior agencies that are served by the BRD
    satisfied with the support they receive under this consolidated
    division?
        Answer. Given the diversity and magnitude of the resources for
    which the Department is responsible, the needs of its resource
    management bureaus related to scientific information will most likely
    always exceed the available resources of USGS. Department bureaus are
    generally satisfied with the support they have received from BRD and
    see the future stability of the organization as improving the ability
    of BRD to address their science needs effectively. In particular, BRD
    has worked hard to maintain and foster its working relations with the
    resource management bureaus. Improvements in identifying Bureau
    Information Needs (BIN) are being pursued to ensure that the critical
    needs of the bureaus are communicated to BRD and that the science
    conducted by BRD is responsive to these needs. While BRD is taking
    actions to improve this process, its initial success can be judged by
    the positive actions that have been stimulated in these bureaus.
        The FWS has established and filled a senior management position to
    coordinate the identification of information needs within the Service.
    The BLM has formalized its strategic science planning process to
    systematically provide its science information needs directly into the
    BRD BIN process in a timely manner. Various avenues are used to report
    back to the bureaus on BRD responses to information needs. For example,
    BLM recently received a major report on the status of their information
    needs and on projects and activities underway to address these needs.
    The BRD Research Centers are holding workshops and meetings with
    counterparts at the regional and local level to discuss progress in
    addressing information needs. These actions have enhanced communication
    between BRD and bureaus at all levels.
        Question. Has the integration of BRD into the Survey's activities
    enhanced the two divisions' abilities for interdisciplinary research,
    or is the nature of their work such that they perform as two distinct
    entities?
        Answer. The BRD integration into USGS has enhanced the opportunity
    for interdivisional collaborative research. The BRD is a full equal
    partner on bureauwide councils and task forces. Interdivisional
    planning and discussions are a key feature for identifying and
    developing budget initiatives for future years. Interdivisional
    meetings of program managers are regularly held to foster such
    discussions and collaborations of ongoing activities. Points of contact
    for specific topics (e.g., environmental contaminants) are identified
    at headquarters and regional levels to facilitate interactions between
    scientists at the working level. Collaborations are beginning where
    expertise and ongoing activities in each Division complement each
    other. For example, BRD was incorporated into the planning and
    implementation of the Abandoned Mine Lands Initiative.
        A $6,000,000 increase is requested for biological research and
    monitoring activities.
        Question. Please provide the committee with a list of these
    programs with the currently appropriated levels of funding and
    prioritize the program increase request.
        Answer. The biological research and monitoring activities
    constituting the requested $6 million are listed below. The science
    addressed by the requested increases are the top information needs
    identified by bureaus submitted in 1995 and 1996.

    Biological research and monitoring activities

                                                                 In millions

    Science support for management of Federal Lands................... +$3.0
                            -----------------------------------------------------------------
                            ________________________________________________
    Invasive species (base: $3.3):
        Weeds in the West.............................................  +1.2
        Exotics in the East...........................................  +0.7
        Integrated monitoring (base: $0)..............................  +0.8
        Air quality impacts on biological resources (base: $0)........  +0.3
                            -----------------------------------------------------------------
                            ________________________________________________
    Endocrine disrupters (base: $0.6).................................  +1.0
                            -----------------------------------------------------------------
                            ________________________________________________
    Restoration of degraded lands and resources (base: $0)............  +1.0
        Coastal habitats..............................................  +0.5
        Pacific salmon................................................  +0.5
                            -----------------------------------------------------------------
                            ________________________________________________
    Restoration of Great Lakes fisheries and habitats (base: $5.0)....  +1.0

                          Minerals Management Service
                              director's statement
        The Minerals Management Service Director issued a statement to the
    House of Representatives regarding the fiscal year 1998 program. The
    Subcommittee has the following questions relative to this statement.
        The agency states that it is accomplishing streamlining goals by
    reducing management layers.
        Question. What are the specific statistics regarding this
    accomplishment? How many positions at mid-level grades have been
    reduced over the past three years? What savings have been derived from
    this effort? How have these savings been reallocated to other MMS
    programs?
        Answer. Under the recently implemented MMS 2000 reorganization all
    organizations reflect fewer reporting layers. The organization has
    flattened by eliminating layers of supervision and having Divisions and
    Regions reporting directly to the Associate Director. In that vein the
    following actions have been implemented:
      --Five Deputy Associate Director (DAD) positions have been abolished.
            Pre-MMS 2000 there were seven DADs whereas post-MMS 2000 there
            are only two.
          For both the Royalty Management and Offshore programs two DADs
            have been combined into one; General Administration (2) and PMI
            (1) have eliminated their DADs.
      --A number of Divisions have been combined and or abolished as
            follows:
          In General Administration, the Budget and Finance Divisions have
            been combined into one division; the EEO office has had
            training functions combined into it from Personnel, creating
            the Equal Employment and Development Opportunity Division; and
            the Management Services and Security Division has been
            eliminated.
          In Offshore, the Engineering and Technology, and Inspection
            Compliance and Training Divisions have been combined and
            retitled to Engineering and Operations Division.
          In Royalty, the Data Management Division, and Reports and
            Financial Division have been combined as the Accounting and
            Reports Division; and the Valuation and Standards Division and
            all solid minerals functions from the Data Management Division
            have been combined as the Royalty Valuation Division.
        From October 1994 to the end of May 1997 MMS has been striving to
    reduce the number of GS 14s, GS 15s, and SES positions. As a result of
    that effort, to date MMS has 40 fewer GS 14s, 14 fewer GS 15s, and nine
    fewer SESs. A large majority of these vacancies were created by
    individuals accepting the voluntary separation incentive program
    (buyouts). The savings attributable to buyouts was partially offset by
    the buyout payment itself and the cost of an individual's lump sum
    annual leave. The funds not used to support the buyout program have
    been rolled back into their respective programs. Legislative and
    regulatory authorities have increased over the past three years, in
    most cases without a commensurate increase in funding availability.
        The agency is attempting to reduce and streamline industry
    reporting requirements with a goal of 100 percent electronic reporting.
        Question. What is the target date for achieving this goal? How has
    this goal been viewed by industry?
        Answer. The Royalty Management Program's (RMP) target date for
    receiving 100 percent of its reports electronically is the end of
    fiscal year 1998. The industry is cooperative and recognizes the
    benefits of electronic reporting. The RMP currently receives 80 percent
    of its royalty reporting lines and 50 percent of its production
    reporting lines electronically which account for less than 10 percent
    of its total reporter universe. To assist reporters, the RMP provides
    free reporting software and many electronic reporting options that
    require minor conversion commitments. To ensure conversion, the RMP is
    drafting a proposed rule to require electronic reporting, but will
    include an exception for hardship cases.
        Question. How does the Indian Royalty Internship intend to achieve
    its objectives of having Tribes manage their minerals affairs? What is
    the long term objective in terms of specific transfer of functions to
    Tribes for performing royalty management work? What is the cost of this
    program? How will personnel costs be affected by this program?
        Answer. The program is intended for mineral producing Tribes
    considering self-governance or self-determination contracts and for
    Tribes who want to become more knowledgeable about royalty management.
    After consulting with the Tribes, we decided to offer a very flexible
    training program, built around on-the-job training and customized as
    much as possible to the needs of each participant. Interns can receive
    hands-on training in various aspects of RMP's mineral revenue
    management activities, including royalty accounting, report processing,
    exception resolution, audit, and valuation. The program will entail
    some classroom training, but will consist primarily of work assignments
    in one or more of our operating divisions.
        The MMS is committed to providing opportunities for Tribes to
    manage or monitor their own affairs with regards to mineral revenues.
    The Royalty Internship Program is being designed for two purposes: (1)
    to provide tools and expertise for Tribes to monitor and oversee their
    mineral interests as well as the royalty management functions MMS
    performs in behalf of Indians; and (2) to help Tribes gain the
    experience and information they need to make decisions about potential
    assumption of royalty management functions.
        Currently we have one intern from the Cherokee Tribe in the
    program. We have received interest from several other Tribes and expect
    to begin two additional intern training programs later in year. Costs
    for the program are difficult to predict until we have worked with the
    individual Tribes to design the best program for their needs. The cost
    for the initial trainee is expected to be less than $20,000.
        We do not anticipate any change in personnel costs due to this
    program. The objective of the internship is to provide Tribes with
    enough information so they can make an informed decision concerning the
    assumption of Federal duties regarding the management of their mineral
    resources. It is unknown at this time what, if any, functions may be
    assumed by the Tribes.
        In June 1996, the agency announced plans to streamline its EIS
    process.
        Question. Has this effort been fully implemented? In the Gulf of
    Mexico, the agency states that ``EIS work for the period 1997-2002''
    will be reduced by 80 percent due to streamlining. What specific
    requirements have been eliminated to result in such a reduction of
    process? What cost savings have resulted from this streamlining effort?
    Has this increased the vulnerability to environmental appeals?
        Answer. We are streamlining the EIS process in two ways. First, we
    are providing more focused, narrowly written lease sale EISs, making
    them less repetitive, less voluminous, less expensive to print and
    distribute, and easier to use. A recent lease sale EIS in the Gulf of
    Mexico (Sales 166 and 168) was reduced in size by 35 percent resulting
    in a $9,800 savings in printing and distribution costs. This savings
    was accomplished through improved internal procedures for document
    preparation while continuing to fulfill NEPA requirements. Making these
    documents more readable will not increase our vulnerability to
    environmental appeals.
        A second effort, limited to the Central and Western Gulf of Mexico
    planning areas, is also under way. We are eliminating the repetitive
    issuance of lease sale EISs for annual sales in the Central and Western
    Gulf. The results of such sales are similar in nature and level of
    environmental impact. The Council on Environmental Quality (CEQ), in
    their regulations at 40 CFR 1502.4(c)(2), recommends assessing similar
    actions in a single EIS. We cover all approved proposed sales in each
    planning area in one EIS. Producing, printing, and distributing two
    multisale EISs instead of five annual lease sale EISs is estimated to
    save approximately $110,000 over a five year period. While this is a
    reduction of up to 80 percent in the cost of preparing and publishing
    lease sale EISs, it does not result in a concomitant reduction of NEPA
    work and manpower requirements. In order to meet CEQ requirements, we
    conduct an additional NEPA analysis for each lease sale to ascertain
    whether the coverage in the ``multisale'' EIS is still applicable. The
    Environmental Assessment (EA) or Supplemental EIS (SEIS) that results
    from this analysis cost somewhat less than the EIS's that were produced
    annually. The principal cost savings result from the fact that an EA
    does not entail publication and distribution costs, and an SEIS, if and
    when required, is a much smaller document than a full EIS.
        By using a multisale EIS approach, coupled with additional sale
    specific NEPA coverage, MMS can continue to fulfill its environmental
    requirements, and there should be no increased vulnerability to
    environmental appeals.
        Question. What are the receipt implications of allowing the
    Secretary more discretion to set royalty terms which adjust
    automatically to changing market conditions?
        Answer. Our royalty receipts already adjust automatically to market
    conditions. Since the vast majority of Federal leases have ad valorem
    royalties, royalty receipts vary directly with the value of production.
    However, one could increase the Government's share of market risk by
    making the royalty rate vary with changes in prices or production
    value. In principle, given a set of expected market conditions, one
    could design royalty terms that, on average, would provide the same
    revenues as the current, fixed royalty rate terms. However, the
    receipts could increase or decrease, depending on; 1) the formula used
    to adjust the royalty rate; and 2) actual market conditions.
        The agency claims to have made significant reductions in
    procedures, processes, and paperwork, through an aggressive
    reengineering effort. These reductions have been cited as offsetting
    the need for significantly more funds to meet rising agency demands.
        Question. How does the agency account for the ability to make such
    significant reductions? Was it inherently inefficient prior to the
    reengineering effort? As the effort to further reduce the Federal
    budget deficit continues into future years, should it be expected that
    the agency will be less able to accomplish significant reductions?
        Answer. Recent operational and procedural efficiencies in MMS have
    been motivated by a number of internal and external initiatives. These
    include:
      --Implementation of Congressional legislation meant to reduce
            regulatory reporting requirements for industry.
      --Implementation of Congressional and Administrative initiatives to
            streamline and downsize Federal agencies.
      --Advances in electronic technology.
      --Frequent reviews of MMS processes by internal staff and oversight
            organizations, to assure program objectives are accomplished
            and customer needs are met.
        The MMS is committed to continuously looking for ways in which to
    improve the efficiency and effectiveness of its operations while
    delivering high quality service to its customers at the lowest possible
    cost. Through aggressive performance improvement initiatives and now
    reengineering, MMS has been able to identify ways to simplify its
    regulatory requirements; consolidate and flatten its organizational
    structure; and streamline or eliminate internal procedures, processes,
    and paperwork needed to accomplish its mission. In some cases,
    organizational structure, work processes, and regulatory requirements
    were found to be inefficient and in need of improvement, yet in other
    cases significant advances in technology and automation have permitted
    program performance gains.
        In looking toward the future, the RMP Reengineering Initiative is
    now addressing core business processes and support systems in its
    accounting, financial, and compliance operations. The objective of the
    initiative is to design, develop, and implement new business processes
    and support systems for the 21st century. Continued Federal downsizing
    and growing expectations for better service at less cost led us to
    conclude that maintaining the status quo, with improvements on the
    margin, is not an acceptable strategy for the future. Furthermore, the
    Royalty Simplification and Fairness Act of 1996 (RSFA) has served to
    amplify the need for us to pursue a strategy of significant change.
    Clearly, capability for further reductions will depend on both the
    success of the reengineering effort and future legislative
    requirements.
                           royalty simplification act
        This act was enacted in August 1996. The act provides for a seven
    year statute of limitations on royalty collections.
        Question. What are the receipts implications of the act relative to
    this statute? Over the past three years what total sums have been
    ``receivable'' to the Treasury that are more than seven years in
    arrears?
        Answer. The MMS does not believe the seven year statute of
    limitations will impact compliance collections because the major
    initiatives currently underway apply mostly to production that occurred
    prior to September 1996, the effective date of the seven year statute.
    Assuming these and other special initiatives are timely completed and
    progress is made on current reengineering initiatives, such as
    shortening the lease compliance periods to much less than seven years,
    the RSFA statute period should not impact collections.
        By 2003, when the provision is fully effective, we believe we will
    be contemporaneous with respect to auditing as well as valuation and
    other issues. Our goal is to have leases verified in less than the
    seven year statute.
        When MMS issues a bill for royalty underpayment, the payment is
    accounted for in the year in which it is received. An audit identifies
    the period and amount of underpayment and calculates interest due.
    While we have the basic data needed in our Auditing and Financial
    System, a separate report/query is not maintained that would track how
    much of the total underpayments are attributable to any prior year(s)
    period. To provide ``receivables'' to the Treasury that are more than
    seven years in arrears would be time consuming and extremely
    burdensome.
        Question. How much interest has been paid by the agency since
    implementation of the act due to overpayment?
        Answer. The RMP has processed three months of royalty data
    (February, March, and April) since implementing the interest programs.
    During each month, we process the reports and payments received during
    the previous month. In other words, reports and payments received
    during February were processed during March. Since RSFA has an
    effective date of February 13, 1997, for interest due to payors for
    overpayments, only overpayments made and corrected after that date
    would be included in the interest due to payors calculations. Very few
    payments qualified under this criteria when we ran the first cycle
    after implementing the software. In fact, from the first run we
    calculated only 18 cents in overpayment interest due payors.
        The interest programs create prebills from which we verify the
    accuracy of the interest exceptions before the interest statements are
    sent to the payors. The prebill amounts have generally been reduced
    during prebill verification by up to 25 percent. For the March 1997
    reporting month, we have verified about 50 percent and we are just
    issuing some of the statements which reflect interest MMS owes the
    payors. The third cycle, the April 1997 reporting month, is in the
    early verification stages. The data below summarizes the information
    contained on the prebills.

                                       PREBILL INTEREST CALCULATIONS--(UNVERIFIED)
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                             Reporting month--        March 1997 and
                                                                     --------------------------------   April 1997
                                                                        March 1997      April 1997        totals
    ----------------------------------------------------------------------------------------------------------------
    Tentative interest owed to:
        Payors......................................................          $440.1          $703.1        $1,143.2
        MMS.........................................................         2,553.1         1,366.5         3,919.6
    ----------------------------------------------------------------------------------------------------------------

        The interest exception processing software reviews royalty lines
    only after the data has been verified through royalty edits. This
    process generally requires 30 days. At each month end, the interest
    module compares due and payment dates for accepted lines to generate
    prebills, which are manually reviewed and processed as final statements
    and mailed to the payors. Overall, 75 to 90 days pass between the time
    the royalty lines are received and the payors mailed interest
    statements. Overpayment and underpayment interest are netted together.
    The payor either pays the balance or can apply credits to their next
    royalty payment. If they are no longer a payor they will receive a cash
    refund.
                            state benchmarking study
        Question. What specific ``best practices'' have been identified at
    State auditing organizations that are likely to be implemented in the
    MMS Royalty Management Program?
        Answer. The ``Final State Benchmarking Study'' report prepared by
    the MMS Office of Policy and Management Improvement and issued February
    14, 1997, identified a variety of ``best practices'' of State royalty
    programs for potential adoption by RMP. The report states that these
    best practices may or may not be practicable for RMP to adopt,
    depending on further analysis of the feasibility of implementation, a
    process to be conducted within RMP's Reengineering Initiative.
        The RMP Reengineering Initiative is currently addressing core
    business processes in its accounting, financial, and compliance
    operations. As a part of the process, we are examining the feasibility
    of adopting/adapting ``best practices'' of a wide variety of financial,
    accounting, and compliance organizations. The principal audit-related
    ``best practice'' identified in the above-mentioned report was to
    conduct audits in two year increments. Currently MMS conducts audits in
    three to six year increments. Reducing the time increments addressed by
    audits is consistent with one of the ``stretch goals'' of the
    Reengineering Initiative; i.e., to assure compliance with applicable
    laws, lease terms, and regulations for all leases in the shortest
    possible time, but no later than three years from the due date.
    However, it is still too early in the Reengineering Initiative to
    confirm if or how this ``best practice'', as well as the other ``best
    practices'' identified in the above-mentioned report, will be included
    in RMP's future business processes. We anticipate completing the
    development of the preliminary design of our future business processes
    by the end of the calendar year.
                       national petroleum reserve support
        The agency has been chartered to support BLM in development of
    leases in the National Petroleum Reserve-Alaska (NPR-A). This follows a
    reduction in the size of MMS's Alaska Regional Office by 50 percent.
    This effort is planned for fiscal years 1997-99. The Subcommittee
    understands that tentative plans are for BLM to pay the cost of support
    items which are above normal salary for MMS employees involved in this
    project.
        Question. Is the above assumption about costs correct?
        Answer. Yes, the assumption is correct. The BLM will reimburse MMS
    for all above normal salary costs. These costs include any overtime
    compensation as well as all non-personnel costs, e.g., travel,
    printing, and data acquisition, incurred by MMS in support of the NPR-A
    effort.
        Question. What planned work will not be accomplished as a result of
    assigning MMS employees to this effort?
        Answer. To allow for this effort, MMS will defer action on the Cook
    Inlet Sale 173 which has been proposed in the approved Outer
    Continental Shelf (OCS) 5-Year Plan for 1997-2002. The prelease work
    for this sale was to begin this fiscal year and continue through 1999,
    which is the scheduled date for this sale. Following completion of NPR-
    A review, action on the Cook Inlet Sale 173 will resume and the sale
    may be conducted in the year 2001. This delay in Sale 173 is not
    considered to be a significant action and, thus, will not affect the 5-
    Year Plan for 1997-2002.
        Question. Will the MMS need to hire additional employees to
    compensate for the temporary loss of these permanent employees?
        Answer. The MMS staff will be diverted from planned activities in
    support of Cook Inlet Sale 173 in order to pursue the NPR-A review. As
    a result, it will not be necessary to hire any additional employees,
    either permanent or temporary, nor will it be necessary to shift funds
    between planned budget activity or sub-activity levels.
                  outer continental shelf--regulatory program
        The agency expects a significant increase in demands for services
    from its regulatory program as a result of renewed interest in Gulf of
    Mexico production. The cost of conducting the regulatory function will
    increase.
        An additional $1.9 million is being requested. With leasing
    activity occurring further offshore and the number of operators
    increasing, the agency must enhance its attention to regulatory
    functions.
        Question. With an increase of $1.9 million and 15 FTEs in this
    function, will demands for services match this increase? What
    shortfalls, if any can be expected? How will individual productivity
    measures be affected by the factors of greater complexity in the
    regulatory function?
        Answer. Demands on regulatory services in the Gulf of Mexico Region
    (GOMR) are expected to increase rapidly for the remainder of fiscal
    year 1997, through fiscal year 1998, and into fiscal year 1999. These
    expectations are based on an understanding of industry's commitment to
    exploring and developing the current lease inventory as well as on
    current statistical observations. Offshore operators have significantly
    increased their lease inventories through leases obtained in recent
    GOMR OCS lease sales. The increase in demand on services in the GOMR in
    the regulatory function can be attributed to (1) an increase in
    activity based on higher oil and gas prices and available lease
    inventories; and (2) more complex operations.
        Increased demand has already been experienced in two areas of our
    regulatory function. The amount of rig activity rose 20 percent in
    fiscal year 1996 and another 20 percent during fiscal year 1997.
    Second, the number of plans of exploration and development have
    increased by more than 100 percent over the past two years. Further,
    the plan review workload has also increased because of the additional
    time required to review the more complex plans, such as Deepwater
    Operating Plans (DWOP). Several very complex deepwater structures
    (Mars, Ram Powell, and Neptune) have been installed in fiscal year 1997
    and several more are planned for fiscal year 1998 and beyond. These
    facilities represent a significant level of capital expenditures for
    projects that will be in place and operating over a 10 to 20 year life.
    These development plans, along with the industry's plans to build at
    least five new deepwater drilling rigs by the end of fiscal year 1998,
    demonstrate the offshore operators' long-term commitment to developing
    their lease inventories in the Gulf. These more complex facilities
    require a substantially longer amount of time to review and to inspect.
    The review of these projects now entails a multi-disciplinary review
    through the DWOP. Many of the projects propose to use substantial
    amounts of new technology. Since most of these new approaches are not
    addressed in the current regulations, they must be analyzed on a case-
    by-case basis to determine if the intent of the regulations is met. (It
    is not uncommon for a DWOP to request waivers from 27 regulations.)
        On the inspection side, these new, more complex facilities take
    longer to inspect than the typical production facility in the shallower
    shelf region. In many cases, two or more inspectors may have to be
    assigned to inspect these facilities where one is the norm. These
    facilities also are farther from shore and will require additional
    helicopter travel time. Longer flight times will directly affect
    inspector productivity; however, the proposed inspector FTEs should
    offset this loss in productivity.
        In addition to the deepwater activities, an increase in the
    activities offshore Alabama and in the Eastern Gulf have and will
    continue to stretch resources. Travel times to these areas, from
    existing MMS offices, is comparable to the deepwater areas, with
    equally complex facilities. To better utilize helicopter flight time,
    the District offices are using overtime budgets to keep inspectors in
    the field. The additional FTEs proposed will allow more flexibility in
    scheduling and better utilization of helicopter seat space.
        In short, we are certain that the full $1.5 million/15 FTE increase
    requested in Regulatory Operations is necessary for MMS to keep up with
    the increased workload associated with heightened industry activity in
    the Gulf. Through careful management of budget and personnel resources,
    such as concentrating inspector resources on problem areas and
    performing pre-installation inspections, as described below, we do not
    anticipate any shortfalls.
        In many cases, engineers and inspectors travel to onshore
    fabrication yards to inspect subsea systems that cannot be physically
    inspected once they have been installed on the seafloor. These trips to
    the fabrication yards also are used to conduct pre-production
    inspections for the most complex facilities. These trips often save the
    operator expensive changes in the field and save helicopter flight time
    for MMS. Due to the complexity of these facilities, consideration must
    also be given to the training that will be needed to support these
    approval and inspection activities.
        Question. How will the costs of supporting employees involved in
    the regulatory function (travel, helicopter time, etc.) be affected by
    the greater complexity in this program?
        Answer. The support costs will definitely increase, as mentioned in
    the answer to the previous question, because these new, more complex
    facilities take longer to inspect than the typical production facility
    in the shallower shelf region. In many cases, two or more inspectors
    may have to be assigned to inspect these facilities where one is the
    norm. These facilities also are farther from shore and will require
    additional helicopter travel time.
        In addition to the deepwater activities, an increase in the
    activities offshore Alabama and in the Eastern Gulf have and will
    continue to stretch resources. Travel times to these areas, from
    existing MMS offices, is comparable to the deepwater areas, with
    equally complex facilities.
        The agency states that a transition is occurring in production
    operations from large companies to significantly smaller operators with
    less financial resources.
        Question. How has this trend increased direct inspection costs? How
    has this transition affected compliance with regulation and policy?
    What are comparative enforcement activity figures for the past five
    years? How have FTEs assigned to the enforcement function changed over
    the past five years?
        Answer. Many of the large multinational companies are making the
    move to the large fields anticipated in the deepwater areas of the
    GOMR. To make this transition to deepwater from the shallower shelf
    region, many of these companies are selling off their interest in
    shallower water fields to smaller companies that can make a profit
    based on their lower overhead. Some of these small operators, who are
    taking over these mature fields have never operated in the GOMR. These
    fields are generally characterized by aging infrastructure with
    declining production. Some of these facilities were installed in the
    late 1950s and are in need of constant attention by the operator. The
    MMS has concentrated some of its efforts at reviewing the condition of
    these facilities, prior to an operator transferring these facilities to
    an operator with significantly less financial resources, and in
    visiting the new operator to make sure regulatory compliance occurs.
    Our inspections have identified that some of these operators are
    unfamiliar with OCS regulations and compliance issues. The level of
    operating experience has also decreased at many of these field
    locations. For these reasons, our inspectors spend more time at these
    facilities for noncompliance and compliance education purposes. Our
    managers also spend time meeting with operators stressing the
    importance of safety.

                                   FIVE YEAR COMPARATIVE ENFORCEMENT ACTIVITY FIGURES
    ----------------------------------------------------------------------------------------------------------------
                                                                  1992       1993       1994       1995       1996
    ----------------------------------------------------------------------------------------------------------------
    Incident of noncompliance................................      4,139      4,044      3,662      3,866      4,826
    Production INCs\1\.......................................      3,596      3,414      3,299      3,570      4,463
    Drilling INCs\1\.........................................        543        630        362        296        363
    Warning..................................................      1,754      1,587      1,286      1,482      1,976
    Component shut-in........................................      2,246      2,229      2,238      2,186      2,556
    Facility shut-in.........................................        139        228        138        198        294
    Civil penalties paid.....................................  .........  .........         15         19         32
    ----------------------------------------------------------------------------------------------------------------
    \1\  Incident of noncompliance [INC].

        FTE's assigned to inspection/enforcement have been relatively
    stable as new efficiencies were implemented to keep up with the growing
    workload. While this has helped, we now need more FTEs to monitor and
    ensure compliance.
        Enactment of the Deep Water Royalty Relief Act has spurred a
    significant increase in Gulf of Mexico leasing activity. The Budget
    Summary states that ``by 1998, the enormous increase in the number of
    active leases in the Gulf of Mexico will require a redirection of
    resources'' to ensure managing the program in a ``safe and
    environmentally sound manner.'' This new activity will require
    additional resources in all areas of the regulatory program.
        Question. Is MMS adequately prepared to keep pace? Is the $6.3
    million increase sufficient?
        Answer. The GOMR believes the $6.3 million increase will be
    sufficient to meet the demand on services through fiscal year 1998. The
    GOMR has made several changes to ensure that the OCS program is managed
    in a ``safe and environmentally sound manner.'' These changes include
    promoting performance-based regulations and the Safety and
    Environmental Management Program (SEMP). These changes to the MMS
    regulatory program will lead to a different strategy in the inspection
    and enforcement program. In many cases, MMS will analyze trends and
    operator performance and will conduct risk-based inspections.
        Enforcement actions will be based on these indicators rather than
    the current prescriptive requirements. The GOMR has also moved to the
    use of statistical sampling and clustering of offshore structures to
    make more efficient use of current inspection resources.
        Question. What are projections for how passage of this act will
    change receipts to the Treasury?
        Answer. The Deep Water Royalty Relief Act (DWRRA) will impact
    Federal receipts in several ways. First, additional tracts will receive
    bids in near-term sales. Second, tracts that would have been bid on
    anyway will tend to receive higher bids. Third, there will be less
    royalties collected to the extent leases qualify for royalty relief.
        Preliminary results on leasing activity tend to indicate
    significant positive impacts on bonus and rental receipts from DWRRA.
    However, it is difficult to statistically separate the impact of DWRRA
    from other possible effects arising from improved economic and resource
    factors which have also tended to spur leasing activity.
        Concerning possible royalty impacts, there is not adequate data
    from exploration and production to reliably estimate this effect at
    this time. The MMS has only recently issued final regulations under
    DWRRA, and only one application for relief has been received (and
    granted). Thus, it is virtually impossible to derive accurate estimates
    of these various, and countervailing, factors at this time.
        Question. Has passage of the act spurred any increased interest in
    OCS leases in Alaska? What additional incentives could improve Alaskan
    OCS production potential?
        Answer. Most of the provisions of the Deep Water Royalty Relief Act
    apply only to the Gulf of Mexico, west of 87 degrees, 30 minutes west
    longitude. The one exception is DWRRA's discretionary authority to
    offer leases with royalties suspended for a period, volume, or value of
    production determined by the Secretary. The Secretary has not exercised
    this authority outside of the portions of the Gulf of Mexico where such
    royalty terms are mandatory. Therefore, DWRRA has not had any effect on
    the Alaska OCS program.
        The MMS continues to monitor the health of the OCS industry in all
    regions. Should incentives be warranted, we have regulatory tools in
    place to provide appropriate financial incentives. On February 2, 1996,
    MMS published a final rule modifying the regulations governing the
    bidding systems used to offer OCS tracts for lease. The regulations now
    give the Department flexibility to offer leases with financial terms
    other than the traditional one-eighth royalty, including terms similar
    to those in place for the deep water areas of the Gulf of Mexico. The
    Department considers options for financial terms on a sale-by-sale
    basis as part of the individual lease sale planning process. As part of
    this process, MMS would consider any comments it receives on the
    financial terms in the Proposed Notice of Sale before making a final
    decision on those terms. In addition, on May 31, 1996, MMS published an
    interim rule modifying the regulations governing royalty relief on
    existing leases. With respect to the Alaska OCS, MMS may grant relief
    for producing leases if revenues are inadequate to sustain production
    or for projects to expand production that would be uneconomic without
    royalty relief.
                             environmental studies
        The administration proposes to increase funding in this program to
    $14.4 million. This is an increase of $1.5 million. The agency budget
    justification does not reflect any FTEs for this function.
        Question. While the justification speaks to leveraging with other
    agencies, State and local governments, and industry, what function
    manages the overall studies program? What portion of this funding is
    associated with program administration? Assuming the Leasing and
    Environmental Assessment function oversees the Environmental Studies
    function, what amount of FTEs are attributable to the environmental
    studies program?
        Answer. Management of the Environmental Studies Program (ESP) is
    carried out under the Leasing and Environmental Assessment Program.
    None of the ESP funding request is associated with program
    administration. All of the ESP budget, including the requested
    increase, will be directed to scientific research. The MMS has
    integrated management of the ESP throughout the Leasing and
    Environmental Assessment function so that many staff will participate
    in the management of studies as well as the preparation of NEPA
    documents. This approach facilitates utilization of studies results in
    NEPA documents and decisions. Approximately 43 FTE, including technical
    and clerical staff, are distributed in Headquarters and the Regions,
    and are involved in oversight of the Environmental Studies Program.
                                   moratoria
        The Administration now has in place a five year plan for
    development of oil and gas from the OCS. I believe this plan was
    developed pursuant to the requirements of the Outer Continental Shelf
    Lands Act and other relevant environmental statutes. Under the law, no
    oil and gas development can occur during the pendancy of the five year
    plan in areas of the OCS not specifically identified in the plan.
        In its fiscal year 1998 budget, the Administration has requested
    continuation of the various OCS development moratoria that have been
    included in the Interior Appropriations bill for a number of years.
    However, I don't believe any of the areas covered by the moratoria are
    included as possible development sites in the five year plan.
        Question. In light of this fact, aren't the legislative moratoria
    redundant? Why do you put so little stock in your own five year plan?
    Doesn't this amount to an appropriations rider that supersedes existing
    environmental statutes?
        Answer. The President's fiscal year 1998 Budget does not propose to
    continue the current moratoria in their present form. Rather, the
    proposed budget includes amendments that would conform the moratoria
    provisions to the newly-approved 5-year OCS oil and gas leasing program
    for 1997-2002, which proposes leasing in an area that previously has
    been subject to moratoria.
        The current moratoria include restrictions pertaining to a specific
    lease sale--Eastern Gulf of Mexico Sale 151--that had been proposed in
    the 5-year program for 1992-1997 but was canceled in 1995. Proposed
    Eastern Gulf Sale 181 in the new 5-year program for 1997-2002 would
    offer a small portion of the area that had been proposed for leasing in
    Sale 151; this new proposed sale was developed in cooperation with the
    States of Florida and Alabama.
        Removing the outdated reference to Sale 151 is intended to clarify
    that the current restrictions would not apply to the newly-proposed
    Sale 181. In addition to striking the reference to Sale 151, the
    proposed amendments would replace a similar outdated reference to a
    specific Atlantic lease sale with more appropriate wording and would
    remove North Aleutian Basin drilling restrictions, that are no longer
    necessary, due to the expiration of all leases in that planning area.
    Thus, the revisions would have the effect of continuing the existing
    preleasing and leasing restrictions as they apply to areas excluded
    from the new 5-year program for 1997-2002.
        By proposing to remove moratoria restrictions that are ambiguous or
    inconsistent with the provisions of the new 5-year program, the
    Administration hopes to clarify and strengthen the role of the 5-year
    program in implementing our OCS leasing policies while also
    acknowledging that there is still considerable constituent support for
    continuing the current restrictions that apply to certain areas
    excluded from the program. We have made conflict resolution a high
    priority in managing the OCS program, and we believe that continuing
    the moratoria as they apply to the areas that are excluded from the new
    5-year program will support our overall conflict resolution efforts.
    Although we have developed a leasing program based on science and
    consensus, which includes the small portion of the Eastern Gulf of
    Mexico Planning Area that previously was subject to moratoria, we
    realize that longer term efforts will be necessary to resolve conflicts
    related to the other areas under moratoria. We believe that continuing
    the moratoria as they apply to those areas will provide a useful
    foundation for those efforts, as the restrictions serve to assure
    stakeholders that the status quo will be maintained while discussions
    of relevant issues ensue. Thus, unlike previous moratoria that did not
    conform to existing 5-year programs-and might be perceived as
    superseding existing statutes governing the formulation and
    implementation of those programs--the Administration views the
    provisions we are recommending for fiscal year 1998 as complementing
    the program for 1997-2002 and serving our longer term priorities.
        In light of the Senate question's reference to development
    moratoria, we wish to clarify that the new 5-year program and the
    proposed fiscal year 1998 moratoria language pertain only to preleasing
    and leasing activities. Thus, neither the 5-year program nor the
    amended moratoria language will directly affect the development of
    existing leases, including those located in areas subject to moratoria
    on future preleasing and leasing activities.
        Question. Recognizing that many areas of potential leasing are
    under moratoria, how have recommendations from this program affected
    planning for eventually proposing a complete or partial end to the
    moratoria?
        Answer. As explained in the answer to the previous question, the 5-
    year program for 1997-2002 proposes a lease sale in a portion of the
    Eastern Gulf of Mexico Planning Area that currently is subject to the
    moratoria but would be available for leasing under the fiscal year 1998
    amendments to the budget recommended by the Administration. Proposed
    Sale 181, which is acceptable to a consensus of stakeholders including
    the Governors of Alabama and Florida, represents a small yet
    significant step on OCS moratoria.
        The new program's exclusion of OCS areas subject to moratoria in
    which there are existing leases--Southern California, Florida
    Panhandle, and North Carolina--is enabling us to focus on resolving
    issues related to those existing leases without having to deal with
    additional conflicts and controversies that proposed new leasing in
    those areas would engender. We are addressing issues related to
    potential development of the Southern California leases through a
    multiyear study--the California Offshore Oil and Gas Energy Resources
    Study (COOGER)--which involves representatives of MMS, the State of
    California, the three affected local counties, and the lessees and
    operators. We have established an information office in Pensacola to
    conduct local education and outreach efforts relating to the Florida
    Panhandle leases, and we are consulting with the State of Florida and
    other stakeholders concerning exploration and development plans in that
    area. We have successfully settled buyback litigation relating to the
    North Carolina leases with all but two of the companies holding those
    leases. We also are planning to work with the State and other
    stakeholders to resolve issues concerning the North Carolina leases
    that will remain in effect as a result of the settlement that has been
    reached with all of the other companies. We believe that if new leasing
    were proposed in these areas in the program for 1997-2002, these
    efforts would be seriously impeded, thereby prolonging conflicts and
    preventing the consensus-building needed to set the stage for
    considering even very limited additional leasing in these areas in
    subsequent 5-year programs.
        Question. How does the economic potential of areas under moratoria
    compare to other planning areas on the OCS?
        Answer. In Alaska, the North Aleutian Basin's economically
    recoverable resources of 0.02 billion barrels of oil (BBO) and 0.88
    trillion cubic feet (TCF) represent five percent on a barrel of oil
    equivalent (BOE) basis of the equivalent total Alaskan resource and
    less than one percent of the BOE OCS resource. The economically
    recoverable resources in the Pacific planning areas of 5.3 BBO and 8.3
    TCF represent 25 percent of the BOE OCS resource, while the
    economically recoverable resources in the Atlantic planning areas of
    0.4 BBO and 5.2 TCF represent five percent of the BOE OCS resource. The
    economically recoverable resources in the Eastern Gulf of Mexico of 1.1
    BBO and 4.9 TCF represent seven percent of the BOE. Therefore, in
    aggregate, approximately 37 percent of the OCS economically recoverable
    resources are expected to be in areas under moratoria.
        Question. Does the agency acknowledge an eventual need to enter
    areas currently under moratoria? If so, what steps are being taken to
    encourage the public's acceptance of leasing in areas presently covered
    by moratoria?
        Answer. The Department does not rule out the possibility that
    changing international conditions or evolving domestic conditions and
    attitudes eventually could result in future consideration of leasing in
    areas currently under moratoria and believes that such consideration
    should be based firmly on science and consensus. As previously stated,
    we are attempting to resolve issues related to existing leases in
    certain moratoria areas to build public trust. The Department also is
    attempting to identify scientific information needs for areas currently
    subject to moratoria, and as part of this effort, requested that a
    joint subcommittee of the OCS Policy and Scientific Committees of the
    Minerals Management Advisory Board conduct a review and provide
    pertinent recommendations to the Secretary. In May 1997 the
    Subcommittee on Environmental Information for Select OCS Areas Under
    Moratoria submitted its report, which presented 10 specific
    recommendations in support of proceeding with environmental studies in
    moratoria areas. This report has been approved by both the OCS Policy
    Committee and the Scientific Committee. The report is under review at
    the Department, and the Secretary has not yet responded to the Advisory
    Board concerning the recommendations.
                           royalty management program
        The agency proposes to reduce this program by $3.7 million and 36
    FTEs.
        Question. With increases in production expected, does the agency
    project an increased demand for services from the Royalty Management
    Program? How will valuation, operations, and compliance be affected?
    Has the agency identified program vulnerabilities in this area as a
    result of the personnel reductions?
        Answer. Although we project significant increases in the production
    of both oil and gas by the year 2000, it will occur mainly in the Gulf
    of Mexico, and be the result of deepwater drilling. Such production
    from a few large leases will have a much smaller impact on RMP workload
    than would increased onshore production which is characterized by
    hundreds of small lessees. The workload increases that will be
    realized, we believe can be absorbed through the efficiencies gained
    over the past two years involving the streamlining of reporting and
    internal processes, and organizational efficiencies resulting from the
    MMS 2000 Reorganization. We have not identified program vulnerabilities
    resulting from personnel reductions which would impact the current
    valuation, operations or compliance processes, even with the increased
    production levels discussed above.
        Question. Will the $3.7 million reduction in any way affect
    implementation of the Federal Oil and Gas Royalty Simplification and
    Fairness Act of 1996?
        Answer. The overall reduction of $3.7 million will be achieved
    through several streamlining efforts that have been in development and
    are now providing efficiencies, such as electronic commerce initiatives
    which are significantly reducing the error rates of the reporters,
    eliminating some processes no longer considered beneficial such as late
    and erroneous reporting assessments, and consolidating and flattening
    the organizational structure which reduced the need for some management
    positions. The impact of this reduction on the implementation of the
    Royalty Simplification and Fairness Act (RSFA) has not been completely
    assessed at this time. The RSFA was signed into law well after many of
    the streamlining initiatives referred to above were initiated. The
    requirements of RSFA provide for many changes in the way MMS conducts
    business, not the least of which is the need for several significant
    software changes. Some of those development efforts will take place
    this fiscal year through system reprioritization efforts.
        Question. Will efficiencies offset the program reductions? If not,
    what functions will be reduced?
        Answer. Yes, efficiency-derived savings should offset the program
    reductions. The MMS began a compliance reengineering effort in April
    1996 which has now been expanded to a full program reengineering
    undertaking. As a result of the compliance study, we are beginning to
    implement process improvements that will result in more efficient use
    of auditors' time. Several recommendations in the reengineering report
    will be implemented which will both meet the General Accounting Office
    audit standards, while at the same time significantly reduce the amount
    of administrative paperwork currently required of the auditors. This
    workpaper and process streamlining will enable us to continue to
    provide effective compliance coverage with fewer staff. In other parts
    of the program, several streamlining initiatives including an
    aggressive electronic reporting policy have enabled the program to
    continue to provide effective levels of service with significantly
    fewer Federal and contractor resources.
        An Office of the Inspector General audit report (96-I-1264) cited
    some weaknesses in negotiated royalty settlements. One specific finding
    included remarks about insufficient personnel in the Royal Management
    program to provide necessary documentation during negotiations.
        Question. Will there be further difficulties in carrying out basic
    Royalty Management functions due to a lack of personnel?
        Answer. The RMP has assigned two additional FTE for paralegal
    personnel to the Office of Enforcement specifically to assist in
    documenting negotiated settlements and civil penalty actions. Team
    members will assume greater responsibility for assuring settlement
    documentation is complete. We believe this will assure all the
    necessary internal controls will be in place.
        Interior's Office of the Inspector General budget justification
    states that ``MMS has not been successful in ensuring that all lessees
    and operators comply with its requirements to accurately and timely
    report the production and sale of oil and gas from Federal and Indian
    leases.'' The OIG states that this occurred because of ``the lack of
    strong deterrent against noncompliance.'' The OIG cited a backlog of
    unresolved exceptions totaling $21.2 million above the threshold for
    such exceptions.
        Question. What is MMS doing to reduce this backlog? What will
    prevent this situation from worsening with reductions in the Royalty
    Management program?
        Answer. To address the exception backlog the MMS added 10 employees
    for two-year terms to the Compliance Verification Division (CVD) and
    began implementation of a software development effort to streamline the
    follow-up process. As a result, the CVD has experienced a significant
    improvement in productivity and efficiency related to the Auditing and
    Financial System/Production Accounting and Auditing System (AFS/PAAS)
    comparison. During the January-April 1997 time frame, unresolved case
    closures increased 75 percent over the same 1996 period, from 3,200 to
    5,700, while AFS/PAAS triggered royalty collections which previously
    averaged about $1.5 million per month approached $2.5 million in May
    1997. The number of unresolved exceptions should continue to decline in
    the future.
        The MMS has conducted a limited pilot project on royalty-in-kind.
        Question. When additional efforts are undertaken with this program,
    will the agency test the OIG recommendation that royalty-in-kind
    involve government use of natural gas as opposed to marketing the gas
    commercially? If not, what are the agency objections to this proposal?
        Answer. With deregulation and easy access to an open gas market,
    there doesn't appear to be any additional benefits associated with
    designating specific production for a particular end user. In fact,
    such arrangements will likely result in additional transportation and
    administrative expenses for a given user versus acquiring the gas in
    the open market. Large Federal end users are currently taking advantage
    of the open access in the gas market and are currently negotiating
    better prices via the competitive market. This has been confirmed by
    MMS in recent discussions with the State of Texas who acknowledged this
    is what's happening with their own royalty-in-kind program.
          Office of Surface Mining, Reclamation and Enforcement (OSM)
                      appalachian clean streams initiative
        A $1 million increase is planned in this program for the purpose of
    restoring streams to pre-coal mining conditions and to combat acid mine
    drainage.
        Critics state that an increase to the Clean Streams Initiative has
    the potential to reduce funds available for high priority reclamation
    projects, including those that protect health and safety.
        Question. How has State funding of programs not related to the
    Clean Streams Initiative been affected? Please provide data since 1994
    showing total State funding program expenditures for non-clean stream
    initiative projects.
        Answer. Since the Appalachian Clean Streams Initiative (ACSI) was
    first conceived, it has been OSM's intention that the initiative not
    displace funding for regular State Reclamation Grants, but to instead
    fund it only through a net increase in State Reclamation Grant funding.
    However, as illustrated in the table below, OSM's goal of holding
    regular State Reclamation Grants harmless was not completely achieved
    in the fiscal year 1997 appropriations process, as Congress reduced
    regular grant funding by $2 million to accommodate $4 million in
    funding for ACSI. While the fiscal year 1998 President's Budget does
    include a small decrease ($678,000) for regular grants, that decrease
    is proposed as a means to offset uncontrollable cost increases, not to
    accommodate the $1 million increase proposed for ACSI. It must also be
    emphasized that all of the Appalachian Clean Streams projects funded in
    fiscal year 1997 were priority two projects listed on the State
    Abandoned Mine Land (AML) inventory and these projects have generated
    more than $4 million in contributions from other sources.
        The following table shows the funding history for regular State
    Reclamation Grants and Appalachian Clean Streams Initiative grants
    since fiscal year 1994. It should be noted that the history of the AML
    State Reclamation Grant program is characterized by fluctuating funding
    levels from one year to the next.

      FUNDING HISTORY FOR REGULAR STATE RECLAMATION GRANTS AND APPALACHIAN CLEAN STREAMS INITIATIVE GRANTS--FISCAL
                                                          YEARS
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                      Enacted
                                               -------------------- 1996 \1\   Enacted  1997 \1\   Enacted  1998 \1\
                                                  1994      1995                1996                1997
    ----------------------------------------------------------------------------------------------------------------
    Regular State reclamation program grants..   135,793   135,534   135,534   140,000   140,000   138,000   137,322
    Appalachian clean streams initiative......  ........  ........    11,009  ........     4,300     4,000     5,000
                                               ---------------------------------------------------------------------
          Total \2\...........................   135,793   135,534   146,543   140,000   144,300   142,000   142,322
    ----------------------------------------------------------------------------------------------------------------
    \1\ President's budget.
    \2\ State reclamation program grants.

        Question. How is the Clean Streams Initiative applicable to non-
    primacy States? How are project funding decisions made in these States
    relative to the initiative?
        Answer. The Appalachian Clean Streams Initiative is broadly aimed
    at remediating the effects of acid mine drainage throughout the
    Appalachian region in both primacy and non-primacy States. In both
    cases, OSM financial assistance is provided to the State. The primacy
    versus non-primacy distinction is important in terms of the mechanism
    by which OSM provides the financial assistance and the source of the
    funds. In primacy States, OSM provides funding for Clean Streams
    projects through supplemental AML State Reclamation Grants. The fiscal
    year 1997 Interior Appropriations, as included in the Omnibus
    Consolidated Appropriations Act, earmarks up to $4 million for such
    grants. By contrast, the mechanism for providing Clean Streams
    financial assistance to non-primacy States, such as Tennessee and
    Georgia, is a cooperative agreement funded through OSM's Federal
    Reclamation program, the roughly $2.4 million budgeted each year for
    Federal high priority reclamation projects. The State of Tennessee will
    receive $325,000 in such cooperative assistance in fiscal year 1997. At
    present, OSM is evaluating potential projects in primacy and non-
    primacy States for funding in fiscal year 1998. In non-primacy States,
    OSM selects Clean Streams projects in concert with appropriate State
    agencies and local watershed organizations.
        The Department's Office of the Solicitor states that their office
    has provided extensive legal support to this initiative. The Office
    states that methods are being pursued to enlist industry's assistance
    in reclaiming abandoned mine lands.
        Question. What interest has been expressed by industry in
    participating in the Clean Streams Initiative? Are specific projects
    being planned for accomplishment with industry participation? What
    methods of industry participation are planned (cash payment, in-kind
    participation, etc.)?
        Answer. The Appalachian Clean Streams Initiative is an effort by
    OSM to establish partnerships with other government, non-government,
    and public groups that will work together to clean-up streams impacted
    by acid mine drainage (AMD). The focal point of these various
    partnerships is the ``Statement of Mutual Intent,'' co-sponsored by OSM
    and EPA-Region III that was signed in February 1995. A strategic plan,
    developed as a part of the Statement of Mutual Intent, envisioned
    several industry-related objectives: site-specific clean-up projects
    with partners, including industry; industry financed projects; and
    encouraging more remining of AML lands in order to gain reclamation
    benefits such as cleaned-up or improved streams. The mining industry
    has been involved in the Clean Streams Initiative by contributing funds
    for specific reclamation projects, donating land for use in project
    construction, and providing in-kind services, such as equipment, design
    advice, or other project leadership/partnering contributions.
        The OSM-sponsored Acid Drainage Technology Initiative is designed
    to complement the Clean Streams Initiative by focusing on coal mining
    operations in the planning phase, during operations, or prior to bond
    release. One objective of this initiative is to identify high-risk acid
    or toxic areas prior to permits being issued by the regulatory
    authority. A second objective is to use state-of-the-science design for
    operations so that AMD does not result in offsite damage or lead to a
    long-term problem that may require perpetual treatment. The success of
    this initiative largely revolves around the coal mining industry being
    willing to assist in developing workable strategies that will result in
    lowered risk of unanticipated AMD problems from active mines.
        The OSM is also encouraging remining and its associated reclamation
    benefits under Title V of the Surface Mining Control and Reclamation
    Act (SMCRA) through various activities. Specific remining projects are
    being developed by industry, with participation of the regulatory
    authorities, which address serious water quality issues. The OSM, EPA,
    and States are participating on an interagency task force that, in
    part, is examining water issues associated with the Clean Water Act
    that appear to be impediments to remining.
        Furthermore, OSM is working on a separate initiative to develop
    approaches under Title IV of SMCRA that will result in more reclamation
    of abandoned mine land. One specific Title IV approach could save AML
    Fund dollars through encouraging industry to restore abandoned mines by
    using proceeds from the sale of incidental coal recovered in the
    process to help finance the projects and to provide a reasonable profit
    to the operator. In fiscal year 1996 the agency obligated $7.3 million
    for emergency projects.
        Question. What has been the emergency obligations for the four
    years prior? Does the $7.3 million include states with emergency
    reclamation programs?
        Answer. Shown below are emergency project obligations for fiscal
    years 1992 through 1996 as reported in the OSM's annual reports.

    Emergency project obligations for fiscal years 1992-96 in whole dollars

    1996..........................................................$7,240,542
    1995.......................................................... 8,788,444
    1994..........................................................10,742,901
    1993..........................................................10,184,885
    1992.......................................................... 9,532,398

        These totals do not include emergency project obligations from
    States which have opted to assume the emergency reclamation program
    from OSM. It should be noted that Ohio and Indiana assumed their
    emergency programs in fiscal year 1993 and fiscal year 1995
    respectively.
        Also, it should be noted that the above numbers do not reflect the
    $7.2 million that was provided to conduct emergency reclamation in
    Kentucky, as part of the President's disaster relief fund in 1994.
        Question. What is the historic backlog of reclamation projects
    which can be funded from Abandoned Mine Land funds? How has this
    backlog been affected by the change of minimum program level funding
    from $2 million to $1.5 million?
        Answer. The Abandoned Mine Land Inventory System reports 4,580 high
    priority sites remaining to be reclaimed. An estimated $2.5 billion is
    needed to reclaim these sites. The reduction in the minimum program
    funding has no discernible affect on the overall reclamation efforts of
    the program; it does transfer the reclamation achievement from some
    States to others. The minimum program States all have efficient, well
    run programs. Funds granted to those States are used primarily to abate
    health and safety hazards stemming from abandoned coal mines. This is
    also true of funds granted to the non-minimum program States. Thus,
    changing the distribution pattern due to a change in minimum program
    levels does not affect in a substantial way the overall amount,
    priority, or quality of reclamation. For the minimum program States,
    the reduction to $1.5 million means that less health and safety
    problems will be corrected than would be addressed if $2 million was
    the funded minimum level, as stated in the Surface Mining Act.
        The Interstate Mining Compact Commission recommends higher
    allocations from the AML fund.
        Question. Within existing staffing and support structure, could OSM
    manage an increased allocation to States from the AML fund?
        Answer. If additional appropriations for grants were provided, OSM
    could distribute the additional funds to States without impacting the
    existing staffing and support structure of OSM.
        The National Association of Abandoned Mine Land Programs and the
    Interstate Mining Compact Commission submitted to the Secretary and the
    Director of OSM, a proposed plan for distributing the accumulated
    balance in the AML Fund to the States in order to accomplish more on-
    the-ground reclamation projects. The Department has been petitioned to
    distribute the accumulated balance in the AML to the States.
        Question. What is the agency reaction to this request? What
    interaction has the agency had with the States regarding this proposal?
        Answer. Staff from OSM have discussed this proposal with the States
    and Indian Tribes on several occasions and have sent informal comments
    on the plan to the National Association of Abandoned Mine Land
    Programs. At this time, OSM is not in a position to support this
    proposal because it would involve amending SMCRA and would result in a
    substantial increase in appropriations from the AML Fund.
                           acid mine drainage policy
        A March 31, 1997 policy statement, says that prevention,
    correction, and control of acid mine drainage is one of the agencies
    top priorities.
        Concern has been expressed that emphasis on projects such as this
    will take funding from higher priority health and safety projects
    associated with the abandoned mine land reclamation fund. The agency
    responded that States can pursue abandoned mine funding through
    intergovernmental agreements with the Natural Resources Conservation
    Service (NRCS).
        Question. How much funding has been utilized by States in
    cooperation with the NRCS for projects which could be funded from
    abandoned mine funds?
        Answer. Acid mine drainage creates environmental and water
    pollution problems that frequently cause health, safety, and general
    welfare problems. These AMD-related problems represent as great a
    problem to the citizens in the coal fields as abandoned mine sites. A
    cooperative effort between OSM, NRCS, and the State and tribal programs
    is ongoing to identify areas that can be reclaimed through partnership
    efforts. We are encouraging State programs to maximize the reclamation
    they do by pursuing sources of funding other than their AML grants,
    including funds previously appropriated for the Rural Abandoned Mine
    Programs (RAMP) but not yet spent. Already two such sites have been
    identified, one in Oklahoma and one in Tennessee. The former has an
    estimated cost of approximately $250,000; the latter has a cost
    estimated at over $1 million. It should be pointed out that the funding
    coming from NRCS is AML funding from previous appropriations to RAMP
    that is not yet spent.
        Question. What level of ongoing interaction occurs with NRCS
    relative to administration of the Rural Abandoned Mine Program? Are
    cooperative projects between OSM and NRCS in operations? Is there
    coordination regarding expenditures from the RAMP trust fund?
        Answer. In past years, RAMP and several State programs were
    carefully coordinating reclamation projects before the RAMP
    appropriation funding was curtailed. There were committees on which
    NRCS, OSM, and State officials sat and decided which projects would be
    funded and who would have the overall responsibility for a project.
    These committees still exist in those States and NRCS still provides
    input into the program. These committees also are facilitating the
    take-over of RAMP projects by the State programs. The OSM and NRCS are
    currently developing a new Memorandum of Understanding which will
    promote efficient use of the AML fund and the skills and talents of the
    NRCS personnel. In addition, OSM, NRCS, and the States are coordinating
    projects. Two such sites have been identified; other possibilities have
    been located. As each is undertaken, it will be done with a combined
    funding of NRCS and State, tribal, and OSM funding as applicable.
                          primacy and abandoned mines
        Currently three Tribes are administering approved abandoned mine
    reclamation programs but do not have primacy.
        Question. What is the status of the effort to give Indian Tribes
    primacy?
        Answer. Currently, SMCRA does not allow any Tribe to assume
    primacy. The Energy Policy Act of 1992 renewed interest in tribal
    regulatory program development by amending SMCRA to add a new Section
    (710(I)) which provides that the Secretary will make grants to the
    Crow, Hopi, Navajo, and Northern Cheyenne Tribes to develop tribal
    regulations and program policies with respect to surface mining; assist
    OSM in the permitting, inspection, and enforcement of surface mining
    activities on Indian lands; and sponsor employment training and
    education. Consistent with Energy Policy Act provisions, the Department
    of the Interior issued grants from BIA and OSM funding totaling
    $480,000 in fiscal year 1996 and $600,000 in fiscal year 1997 to the
    Tribes to assist in establishing a surface coal mining regulation unit
    for each Tribe.
        The OSM staff met with Crow, Northern Cheyenne, Navajo, and Hopi
    tribal representatives in a series of meetings in 1996 to develop draft
    legislation that would allow tribal governments to assume SMCRA
    primacy. The last meeting occurred on November 13, 1996. Each meeting
    has resulted in bringing the Tribes closer to an agreement as to the
    language of the draft legislation.
        On April 14, 1997 OSM sent a letter to the Tribes requesting that
    they review a final draft of the legislation and asked for further
    input. The Navajo Nation has advised OSM that they want to meet one
    more time to discuss the draft legislation. A meeting will be scheduled
    and, depending on the outstanding issues among the Tribes, OSM will
    then make recommendations to the Secretary on how best to proceed with
    the legislative initiative.
        The State of Tennessee has relinquished regulatory authority.
        Question. Are other States considering this action?
        Answer. The OSM is unaware of any other State which is considering
    relinquishing primary regulatory responsibility.
                              coal mine complexity
        The agency budget justification speaks to increased production from
    a reduced number of mines. Permitted acreage has increased to 4.2
    million. Technology has rapidly advanced.
        Question. How has the skill level of OSM employees been affected by
    the technological changes? How have changes in technology affected the
    skill level of State and tribal regulators? How have agency training
    costs been affected?
        Answer. Through OSM's Technical Training Program, the technical
    competence and professional knowledge of OSM, State, and tribal
    personnel has risen commensurate with technological advances and
    changes in coal mining and reclamation operations. Each year, the
    program trains approximately 700 State and tribal students and 300 OSM
    students. Regulatory and reclamation staff must make numerous and
    complex technical judgments while performing their duties. To update
    this technical expertise, the Technical Training Program continues to
    develop new courses in response to customer requests and advances in
    technology. The program has added numerous courses which specifically
    focus on the application of the most appropriate technology. For
    example, courses were recently developed to teach the latest
    technologies in predicting, controlling, and abating acid-mine
    drainage. Additional new offerings include five field intensive
    workshops on the most appropriate technologies and methods to abate the
    abandoned mine land problems of subsidence, landslides, mine fires,
    dangerous highwalls, and dangerous openings.
        Courses are continually updated to include new practical
    applications resulting from technological changes including the latest
    materials and methods for erosion and sediment control, use of computer
    modeling in hydrology courses, use of global positioning units for
    field classes such as applied engineering, and the latest research on
    vegetation practices. Special emphasis is given to differences in the
    application of technology in different climatic and geographic areas.
        By making these technological updates available through the
    training program, State, tribal, and OSM regulatory and reclamation
    staff have access to information that improves their knowledge of on-
    the-ground conditions and this enables staff to make better decisions
    about permitting, bonding, inspection, and optimal abatement of
    abandoned mine land problems.
        The OSM has held its technical training budget relatively constant,
    so the training program has responded to the aforementioned trends by
    offering fewer sessions of several older and more fundamental classes
    and shifted some funding to meet advanced technical needs as newer
    courses are more costly. For example, more complex subject matter
    requires the use of additional instructors for each course, so that
    courses which are being offered on acid mine drainage require
    instructors who have specific expertise in geo-hydrology, soil science,
    plant and aquatic ecology, and water chemistry; the AML Design
    workshops require civil and mining engineers, AML project managers, and
    geologists; and the Wetlands Awareness and Erosion and Sediment Control
    courses require experts who are versed in the specific climatic
    conditions, soils, and vegetation of an area of the country.
        This has had the effect of limiting the number of participants and
    increasing the travel costs because students may have to fly if only
    one session of a course is held nationwide. The reduction in basic
    course offerings means that not all State and Tribal new hires or staff
    requiring cross-training will have their needs met. Additionally, while
    the overall number of program offerings has increased, demand also
    exceeds available spaces for courses in advanced technology.
        Question. How has the cost of mining coal changed? Is there
    comparative data available showing changes in the cost per unit for
    mining coal?
        Answer. The OSM does not collect this type of data, and the agency
    is unaware of any readily available information source. However, over
    the last decade, coal mining productivity has risen at an average
    annual rate of 6.6 percent, including an eight percent increase from
    1994 to 1995. Much of this productivity gain results from an increase
    in both the number and efficiency of underground mines using the
    longwall extraction technique.
        The agency reduced its workforce by approximately one-third in
    fiscal year 1996.
        Question. After implementation of this significant downsize has
    full organizational alignment been achieved? Are all employees located
    in the most efficient locations and properly matched with their
    respective specialties?
        Answer. Immediately after OSM's reorganization and downsizing, the
    staff experienced difficulties maintaining the same level and quality
    of program delivery. Many employees affected by the reduction in force
    were placed in different programs or positions. The OSM has retrained
    many employees to improve their effectiveness in program delivery. Some
    staff were relocated to match technical expertise with workload
    demands. With training, redistribution of workloads, automation, and
    redesign of some of OSM's processes, OSM has employees located in the
    most efficient locations and has virtually completed its organizational
    realignment. The OSM will continually monitor its workload and adjust
    staffing locations as needed.
                                    remining
        The OSM has established a charter which involves the formation of
    partnerships with States and environmental groups to determine the
    status of remining in the Appalachian States.
        Question. What levels of production can be expected through
    remining projects?
        Answer. The OSM is unaware of any projections regarding total
    potential coal production from remining projects. However, in
    Pennsylvania, 60 percent of the active coal mining operations involve
    remining, as did 72 percent of the active operations in Virginia in
    1994. Furthermore, in Virginia in 1994, 38 percent of the total
    permitted acreage consisted of previously mined lands.
        Question. Will remining efforts affect sites that have been
    restored through reclamation projects? Have any sites over the past
    five years been reclaimed and then remined? Was the reclamation expense
    for any of these sites paid for with AML funds? If so, what has the
    cost been to the AML fund?
        Answer. We do not anticipate that areas already reclaimed through
    the AML program will be disturbed through remining efforts. The OSM is
    not aware of any reclamation work funded from the AML program that has
    been disturbed by remining. Our national program guidelines are quite
    specific regarding areas that have potential for remining. Such areas
    are not to be reclaimed through the AML program unless the reclamation
    authority can ascertain that there is little likelihood of a remining
    effort. Programs go to great lengths to ensure that remining does not
    occur on areas that have been reclaimed with AML funds. In some States,
    the landowner or mineral owner must complete a questionnaire which
    discusses any future plans to remine. If such plans are even remote,
    the AML program does not undertake a project. Also, the AML program
    discusses the site with the regulatory program and gets input as to the
    suitability for remining. Again, if the site is even slightly a
    candidate for remining, funds are not used for the portion of the site
    that might be remined.
                    state funding, environmental protection
        The agency is planning a $500,000 decrease in the State Funding
    Program.
        Question. Which States will be affected by this reduction?
        Answer. The OSM anticipates this reduction, of less than one
    percent of the total grant funds, will have no discernible impact on
    States. It has been determined that States are not fully obligating
    grant funds, as evidenced by some States consistently turning back
    funds at the end of the grant performance period; over $1 million was
    deobligated in fiscal year 1995, the latest year for which we have
    complete data.
        Question. Are these reductions due to reduced matching funds by the
    States? If so, why have the matching funds been reduced? Is there less
    work to be accomplished?
        Answer. This reduction is due to a reduced matching level by the
    States. The reasons for the reduction in State matching funds are
    numerous and can vary from State to State and from year to year.
    However, the most consistent reason is, like the Federal Government,
    many States are facing a financial challenge and are forced to make
    tough choices for dwindling or flat resources.
        Question. What was the fiscal year 1998 grant request total on a
    State by State basis?
        Answer. The following table shows the States' fiscal year 1998
    grant estimates, which were submitted to OSM in August 1996.

                               FISCAL YEAR 1998 REGULATORY GRANT ESTIMATES STATES' REQUEST
                                                   [In whole dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                        Non-Federal
                                  State                               lands (Federal   Federal lands       Total
                                                                          shares)
    ----------------------------------------------------------------------------------------------------------------
    Alabama.........................................................       1,203,815          15,000       1,218,815
    Alaska..........................................................         173,580  ..............         173,580
    Arkansas........................................................         196,836  ..............         196,836
    Colorado........................................................         510,227       1,409,199       1,919,426
    Illinois........................................................       2,239,046          87,486       2,326,532
    Indiana.........................................................       2,161,827  ..............       2,161,827
    Iowa............................................................         180,570  ..............         180,570
    Kansas..........................................................         104,166  ..............         104,166
    Kentucky........................................................      13,760,504         359,285      14,119,789
    Louisiana.......................................................         192,563  ..............         192,563
    Maryland........................................................         663,173  ..............         663,173
    Mississippi\1\..................................................  ..............  ..............  ..............
    Missouri........................................................         573,166  ..............         573,166
    Montana.........................................................         266,444         840,965       1,107,409
    New Mexico......................................................         278,586         398,526         677,112
    North Dakota....................................................         296,628         230,711         527,339
    Ohio............................................................       1,551,254  ..............       1,551,254
    Oklahoma........................................................         899,374          24,030         923,404
    Pennsylvania....................................................      12,023,329  ..............      12,023,329
    Texas...........................................................       1,446,563  ..............       1,446,563
    Utah............................................................         280,028       1,398,181       1,678,209
    Virginia........................................................       3,063,965          10,518       3,074,483
    West Virginia...................................................       8,142,287  ..............       8,142,287
    Wyoming.........................................................         262,250       1,271,732       1,533,982
                                                                     -----------------------------------------------
          Totals....................................................      50,470,181       6,045,633      56,515,814
    ----------------------------------------------------------------------------------------------------------------
    \1\ Has not yet submitted estimates for fiscal year 1998.

        The Interstate Mining Compact Commission recommends reducing the
    State ``matching'' share to 25 percent from 50 percent.
        Question. How would such a change affect the operations of OSM in
    terms of program accomplishment, FTEs, and project backlog?
        Answer. If the State matching share is reduced to 25 percent and
    the overall grant appropriation of $50.7 million is increased
    proportionally within OSM's budget , such a change would severely
    impact all of OSM. The OSM would have to reduce its direct operating
    budget from $55 million to $32 million. The OSM operating budget could
    not be lowered to this level without severely impacting the agency's
    mission. Such a reduction would adversely affect not only coal field
    residents in Federal program States who are completely dependent on OSM
    for protection from coal-related hazards, but also primacy States who
    rely on OSM technical assistance and training, and who also benefit
    from OSM oversight and backup enforcement. At this time, the precise
    impact of such a decrease on OSM's programs, FTEs, and project backlog
    cannot be quantified.

                                         ENVIRONMENTAL PROTECTION: STATE FUNDING
                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                    Current funding                                       Hypothetical funding
    ----------------------------------------------------------------------------------------------------------------
    Non-Federal lands cost (50 percent)...........     $45.324     Non-Federal lands cost (75 percent).     $67.986
    Federal lands cost............................       5.352     Federal lands cost..................       5.352
    State match (50 percent)......................      45.324     State match (25 percent)............      22.662
                                                   -------------                                        ------------
        Total program cost........................      96.000         Total program cost..............      96.000
    Grant appropriation...........................      50.676     Grant appropriation.................      73.338
    ----------------------------------------------------------------------------------------------------------------

        If the State matching share is reduced to 25 percent without
    increasing the overall grant appropriation, there would be an
    immediate, adverse impact on the States' regulatory programs. Under
    this scenario, State Regulatory Authorities' (SRA) budgets would be cut
    in half, as the OSM State Regulatory Grants would have to be reduced by
    one-half to comply with the SMCRA requirement that primacy States
    contribute 50 percent of the cost of the SRA's budget. A reduction of
    this magnitude would severely undermine States' ability to operate
    viable regulatory programs. Some States would not be able to maintain
    effective programs, in which case OSM would incur a major expense to
    take over the regulatory programs.

                                         ENVIRONMENTAL PROTECTION: STATE FUNDING
                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                    Current funding                                       Hypothetical funding
    ----------------------------------------------------------------------------------------------------------------
    Non-Federal lands cost (50 percent)...........     $45.324     Non-Federal lands cost (75 percent).     $45.324
    Federal lands cost............................       5.352     Federal lands cost..................       5.352
    State match (50 percent)......................      45.324     State match (25 percent)............      15.108
                                                   -------------                                        ------------
        Total program cost........................      96.000         Total program cost..............      65.784
    Grant appropriation...........................      50.676     Grant appropriation.................      50.676
    ----------------------------------------------------------------------------------------------------------------

        The agency appears to justify a reduction of $500,000 from the
    State regulatory grant program because States are unable to meet the 50
    percent match requirement. States appear to be having trouble meeting
    this 50 percent level.
        Question. Are there mechanisms in SMCRA which would allow OSM to
    increase the Federal share of the program? If changes to SMCRA are
    required, would the Department support the changes necessary to
    increase the Federal share? Has the agency analyzed what the financial
    impact would be to the Federal Government if States begin to opt out of
    regulatory programs? What steps is OSM taking to make sure that the
    State/Federal partnership remains in place?
        Answer. Section 705 of SMCRA provides that grants shall not exceed
    80 percent of the total costs incurred during the first year, 60
    percent the second year, and 50 percent each year thereafter. At this
    time, all States with active mining are at the 50 percent cost sharing
    level. However, if a State elects to regulate surface coal mining and
    reclamation operations on Federal lands, OSM may reimburse the State up
    to 100 percent of its costs of such regulation. For fiscal year 1998,
    we expect 11 States to have a cooperative agreement with OSM to
    regulate surface coal mining on Federal lands.
        There is no other mechanism in SMCRA to increase the Federal share
    of program costs. However, a State must have primacy to qualify for
    State Reclamation grants. Because of the impact a higher matching
    percentage could have on budget constraints, it is unlikely that the
    Administration would support any change to SMCRA which would result in
    such increased costs. The OSM has not analyzed the financial impacts if
    States begin to opt out of regulatory programs. At this time, we are
    not aware of any State planning to do so. One of the key steps OSM has
    taken to make sure the State/Federal partnership remains strong is the
    reengineering of the oversight process. In cooperation with the States,
    OSM developed a new results-based oversight strategy to focus on end
    results and the on-the-ground success of States in meeting the SMCRA
    environmental protection standards. Also, OSM and the States now
    develop State-specific evaluation plans tailored to the unique
    conditions of each State program and governed by performance agreements
    worked out by each State and OSM Field Office.
        The agency is planning a $240,000 increase in the State Program
    Evaluation. However, no FTE changes are shown.
        Question. For what purposes will this increase be used?
        Answer. This increase in Environmental Protection/State Program
    Evaluation is for a pro rata share of ``uncontrollable cost
    increases,'' which includes mandated pay increases.
                           applicant violator system
        A Federal appeals court in February 1997 ruled that the agency's
    Applicant Violator System (AVS) could not be used. On April 21, 1997,
    OSM announced new rules which would ``block permits for applicants
    responsible for uncorrected violations'' in the past.
        OSM Clarification and Response--In issuing its decision on January
    31, 1997 the U.S. Court of Appeals for the District of Columbia Circuit
    did not address or prohibit use of the AVS. Instead, it ruled that
    OSM's 1988 ownership and control rules exceeded the authority provided
    by Section 510(c) of SMCRA. Specifically, the court held that Section
    510(c) prohibits the issuance of a permit if there are unabated
    violations at operations owned or controlled by the applicant. This
    section does not, according to the court, authorize the regulatory
    authority to withhold permit issuance on the basis of unabated
    violations at operations owned or controlled by persons who own or
    control the applicant, as provided in the challenged regulations. The
    decision recognizes that OSM and State regulatory authorities have an
    obligation to implement Section 510(c) as interpreted by the court. The
    OSM and States use the AVS, which is a national database, as a tool to
    fulfill this obligation.
        Question. How do these new rules address the Federal judge's
    actions?
        Answer. The new interim final rules provide for application of the
    permit block sanction in a manner consistent with Section 510(c) of
    SMCRA as interpreted by the court. Under the new rules, regulatory
    authorities may not issue a permit if any surface coal mining and
    reclamation operation owned or controlled by the applicant is currently
    in violation. This differs from the previous rules, which extended the
    prohibition on permit issuance to situations in which any surface coal
    mining and reclamation operation owned or controlled by a person who
    owns or controls the applicant is currently in violation.
        Question. Can any existing information in the Applicant Violatior
    System be used to make administrative permitting decisions in light of
    the judge's decision?
        Answer. Yes. As required by regulations unaffected by the court's
    decision, State and Federal regulatory authorities continue to base
    permit issuance decisions on the compliance and ownership and control
    information in the AVS. While the court decision invalidated OSM's 1988
    ownership and control rules, it did not invalidate or otherwise negate
    the regulations requiring use of the AVS as part of the permitting
    process. The AVS and the information it contains are still essential to
    ensuring implementation of Section 510(c) of SMCRA.
        Question. What specific aspects of the new rules makes the process
    less susceptible to a repeat decision by a Federal court that this
    process can not be used to ``screen'' applicants?
        Answer. In rendering its decision, the court found that the
    language in Section 510(c) of SMCRA clearly authorized the use of the
    permit block sanction in those cases where the applicant owned or
    controlled violations. However, the court found that OSM had exceeded
    this authorization when it promulgated regulations that applied the
    permit block sanction to those who owned or controlled an applicant. On
    the basis of this single flaw in the rules, the court invalidated OSM's
    1988 ownership and control regulations. In developing the April 21,
    1997 interim final rules, OSM carefully considered the court's
    interpretation of Section 510(c) and sought to ensure that the new
    rules were fully consistent with that interpretation. Most
    significantly, the new rules do not include the provision that the
    court rejected. Hence, OSM believes that these rules will survive
    further judicial scrutiny.
        The agency states that there is a continuous violation problem,
    referring to 4,682 \2\ violations.
        Question. What are the past five year comparative data regarding
    violations notices? What is the disposition history for these
    violations?
        Answer. The following chart shows State individual violations for
    evaluation years 1993-1996. The 1992 data was captured at the aggregate
    notice of violation level, and a notice of violation may include more
    than one individual violation. Of the violation figures displayed,
    approximately 10 to 15 percent resulted in issuance of failure to abate
    cessation orders. The remainder of all violations were corrected to the
    satisfaction of the State regulatory authority.

    1992...........................................................\1\ 9,178
    1993..............................................................10,148
    1994..............................................................10,493
    1995.............................................................. 8,675
    1996...........................................................\2\ 5,852

    \1\ Data for 1992 is the total number of notices of violations, all
    other years are individual violations cited. A notice of violation may
    include multiple individual violations.
    \2\ Preliminary numbers, the 4,682 figure above is for 9 months of data,
    the 5,852 is for 12 months of data.
    ---------------------------------------------------------------------------
                 technical information processing system (tips)
        This system has become an integral part of State programs. The
    agency proposes a decrease of $300,000 in this program which is
    attributable to accomplishment of upgrades and equipment replacement.
    The Western Interstate Energy Board disputes the contention that
    equipment has been adequately upgraded.
        Question. Has OSM consulted with the States prior to making this
    budget request?
        Answer. The TIPS is a technical assistance program for States and
    Indian Tribes which is entirely Federally funded. States and Tribes do
    not match the costs. The OSM did not specifically consult with the
    States about any reductions in TIPS funding prior to making this budget
    request. Given other program priorities to be funded in fiscal year
    1998, the TIPS workstation upgrades were not included in the OSM budget
    request. The OSM has consulted with States to work toward developing an
    outline of the course of action and costs associated with maintaining
    TIPS at its current level of operation. It is intended that TIPS
    hardware will be replaced incrementally on a continuous five year
    rotating basis. Equipment replacement was initially envisioned as
    beginning in fiscal year 1996. However, due to budget reductions in
    fiscal year 1996, the replacement of equipment did not occur as
    anticipated.
        Question. Will this reduction make the agency increasingly prone to
    system obsolescence by lengthening overall equipment upgrade and
    replacement schedules?
        Answer. Some of the current TIPS workstations will be five years
    old in fiscal year 1998. This is a concern because the manufacturer's
    warranted maintenance and repair service agreement expires after five
    years from purchase. The OSM is replacing some of the older hardware
    this fiscal year and is striving toward a regularly scheduled cycle of
    replacement for all TIPS equipment. The OSM is not increasingly prone
    to system obsolescence due to replacement delays to date.
                              Departmental Offices
                           office of insular affairs
        The Committee last year directed the Department to withhold from
    American Samoa $2 million in construction grants until the Secretary
    certifies that the recommendation of the immediate term financial
    recovery plan have been substantially implemented.
        Question. Have these funds been released?
        Answer. No, these funds have not been released.
        Question. What progress is the American Samoa Government making
    with regard to implementation of the working group recommendations?
        Answer. We are awaiting a report from the American Samoa Government
    on the status of implementing the Financial Recovery Plan. We expected
    the report by May 31, but apparently it is not completed.
        Question. Would the Administration support inclusion of similar
    language in the fiscal year 1998 appropriations bill or report?
        Answer. Yes, we would support a similar withholding attached to the
    fiscal year 1998 appropriation.
        Similarly, the Committee has objected to the release of further
    funds for health care facilities pending establishment of an
    independent hospital authority with rate setting power.
        Question. What progress has been made in American Samoa with regard
    to establishment of an appropriate hospital authority?
        Answer. This issue was discussed with Governor Sunia in March. The
    Governor is strongly opposed to an independent hospital authority. On
    the premise that the primary Federal concerns are good hospital
    management and the imposition of a reasonable fee schedule, we invited
    the Governor to submit an alternative proposal that will accomplish the
    same objectives. He indicated he would do that and we expect his
    proposal at the same time as the report on the Financial Recovery Plan.
        Question. What funds have been released to American Samoa for
    health care facilities in fiscal year 1997?
        Answer. No funds have been released for health care facilities in
    fiscal year 1997. We will continue to withhold this funding until the
    American Samoa Government develops and implements a proposal for
    resolving health care problems that is acceptable to the Department and
    the Appropriations Committees.
        The American Samoa Government is to provide a capital improvement
    plan that shows what projects will be funded in the current budget year
    and four outyears.
        Question. Has the Department received an update of the Master Plan?
    If so, does the plan include any significant changes in priorities or
    funding requirements? If not, when does the Department expect to
    receive a plan update?
        Answer. The Office of Insular Affairs received revisions to the
    Master Plan from the American Samoa Government at the beginning of June
    1997. It included some changes in priorities, primarily associated with
    the Governor's desire to institute a program to improve village roads
    in American Samoa. The justification is that the village roads have so
    deteriorated that they are unsafe and basic services such as school
    buses, trash pickup, police, fire, and rescue cannot use many of the
    roads. We did not think the revised plan adequately demonstrated how
    priorities are determined and the criteria used to select specific
    projects. Also, although the transmittal letter referenced additional
    outyear information, specific lists of projects to be funded in fiscal
    year 2001 and fiscal year 2002 were not included. We are awaiting an
    improved plan and expect to receive it by mid-July.
                                      guam
        The fiscal year 1997 appropriations bill provided $4.6 million to
    Guam for capital infrastructure projects.
        Question. Has Guam provided the Department with a plan for
    allocating these funds and future funds that may be appropriated for
    this purpose?
        Answer. Yes, the Governor has given us a plan for the use of these
    funds. However, shortly after receiving the Governor's plan, we were
    informed that the Guam Legislature enacted legislation, over the
    Governor's veto, that directs all Interior funding be used for new
    school construction. We have asked the Governor to resolve any
    discrepancy and offered assistance in the development of a plan that
    focuses exclusively on new schools.
                             maintenance assistance
        The Administration is proposing a $980,000 increase in the
    maintenance assistance program to allow for a reduction in cost sharing
    for certain grants to island governments.
        Question. Given the level of Federal investment in capital projects
    in the insular areas and the importance of proper maintenance programs
    to maintain the value of that investment, does it make sense to reduce
    the local matching requirements for this purpose? Doesn't this send the
    wrong message?
        Answer. We think we can avoid sending the wrong message. Our major
    concern is that island hospitals simply are not participating in the
    program. While we want to develop incentives for participation by the
    hospitals, including waiving, delaying, or redefining matching
    requirements, we do not want that done at the expense of other
    participants. Given the huge investment made by the Department in
    island hospitals, we think the maintenance improvements are worth the
    proposed additional expenditure. We do not foresee any adverse impact
    from the proposal in terms of discouraging insular governments from
    investing in maintenance. The proposed incentives will be temporary and
    strictly limited to health care facilities.
                                brown tree snake
        The Administration is requesting a $1 million increase for the
    Brown Tree Snake (BTS) program.
        Question. For what specific purposes will these funds be used? For
    research? Control? Eradication? If funded at the request level, how
    would BTS funds be allocated between Guam, the State of Hawaii, the
    Biological Research Division and other program participants?
        Answer. Our major need is more research and $800,000 of the
    proposed increase will be used for that purpose. Research can involve
    both improved control techniques and eradication methods. The remaining
    $200,000 will go to the Commonwealth of the Northern Mariana Islands
    (CNMI), where a snake population appears to have developed, for control
    and containment efforts. The total $1.6 million budget will therefore
    be divided $200,000 each to Guam, Hawaii, and the CNMI for control
    operations, and $1 million to the Biological Research Division of USGS
    for enhanced research. All work funded and performed will be consistent
    with the Brown Tree Snake Control Plan, developed jointly by several
    Federal agencies and the aforementioned State and territorial
    governments.
                                enewetak support
        The Department is conducting a review of the Enewetak Support
    program.
        Question. Is this review complete? If so, what are the Department's
    findings? If not, when does the Department expect to complete its
    review?
        Answer. The review has not been completed. We are working with the
    U.S. Department of Agriculture to identify an expert to perform the
    review. We will use technical assistance funding to pay for the work.
    It now appears the work will not be completed prior to the end of this
    fiscal year.
                            departmental management
        The Department established the Franchise Fund Pilot Program which
    began in fiscal year 1997.
        Question. How has establishment of this fund affected Department
    efficiency?
        Answer. Establishment of the Franchise Fund Pilot Program has not,
    and was not expected to, initially affect the Department's efficiency
    either positively or negatively. However, over time through economies
    of scale and the ability to invest in new technology, the Department
    expects to realize benefits in efficiency of operations. No unnecessary
    layers of management, regulations, or other bureaucratic constraints
    have been imposed as a result of the pilot program. The current
    structure, building on pre-existing management structures including the
    Chief Financial Officer (CFO), the Deputy CFO, and the Administrative
    Services Advisory Board, oversees Interior service providers and
    establishes common policies and operating principles necessary to
    operate the Interior Franchise Fund.
        Question. Have internal Department administrative functions been
    affected adversely?
        Answer. Quite the contrary, the internal Department administrative
    functions have been impacted positively by the Franchise Fund Pilot
    Program. Revenues generated by the Interior Franchise Fund service
    providers result in funds for the acquisition of capital equipment for
    the improvement and implementation of Department financial management,
    ADP, and other support systems. Additionally, direct costs of the
    service providers such as labor and benefits are shared with Franchise
    clients instead of being borne entirely by the Department. Also, fees
    charged to non-Interior agencies are helping to offset certain fixed
    costs associated with the general purpose computer centers maintained
    by the Department.
        Question. What internal Department savings are attributable to
    establishment of this process?
        Answer. It is too early to quantify the savings related to the
    Interior Franchise Fund with any precision. Nonetheless, the labor,
    software, and computer center charges which are now being used to
    support external clients, which would otherwise have been borne by
    Interior bureaus, are estimated at nearly $2 million for fiscal year
    1997.
        The Department's budget justification discusses implementation of
    DOINET for 57,000 employees.
        Question. Does each bureau bear the cost of accessing the system?
        Answer. Yes, the bureaus pay for their costs of accessing the
    DOINET through the Departmental Working Capital Fund.
        Question. How are individual bureau costs computed for system
    access?
        Answer. The DOINET costs are allocated to bureaus based upon what
    they spend annually for non-DOINET data communications and on their
    actual DOINET measured usage. The costs of these two elements are
    weighted at 50 percent each and applied against projected DOINET
    expenses to determine a bureau's apportioned cost.
                            office of the solicitor
        The Office of Solicitor reports that it has provided significant
    assistance to ``basin wide'' watershed protection efforts. A specific
    example includes the Columbia River area.
        Question. As a result of these major basin wide assessment
    projects, is the agency devoting an increased level of resources to
    litigation and appeals?
        Answer. No, in the short term, the watershed protection efforts
    require additional legal support, but in the form of client counseling,
    reviewing documents for legal sufficiency, legal research, interagency
    coordination, and negotiations, rather than increased litigation or
    appeals.
        Question. Is litigation declining as a result of emphasis on basin
    wide areas?
        Answer. Certainly in the short term the answer is no. Existing
    litigation is not immediately resolved. Also, as watershed management
    efforts are initially undertaken, novel legal issues arise. Some of
    these are likely to be challenged. Over the next several years, we do
    anticipate a reduction in litigation, as issues related to the
    development of watershed management programs are resolved, and
    litigation over piecemeal management efforts declines.
        The Office has identified the lack of up-to-date computer
    technology as a serious problem.
        Question. What is the specific timetable for implementation of
    DOINET links to all Office employees?
        Answer. At this time, we do not have sufficient resources to
    establish DOINET links to all Office employees, given the high cost of
    the necessary hardware and software. Instead, we are proceeding
    incrementally, with our first goal being to establish a DOINET link to
    one computer in each of our six headquarters divisions and seven
    regional offices. Currently, DOINET connections have been made in all
    six divisions and in four regional offices, and we are making good
    progress in two additional regions.
        Where a regional office is in reasonable proximity to a client
    bureau, we have generally been able to extend their DOINET connections
    to our office. In other locations, it will be more difficult and costly
    for us to make the connections. We hope to complete these initial
    connections this calendar year. As resources permit thereafter, we will
    establish additional links with our 11 field offices and extend the
    existing links to additional workstations in each location. In order to
    do so, however, we will need to upgrade our workstations and purchase
    additional software to take advantage of the DOINET links.
        Question. What is the estimated timetable for implementation of the
    Office home page on the World Wide Web?
        Answer. We expect to have an Office of the Solicitor home page on
    the World Wide Web, with limited features, by the end of fiscal year
    1997.
        The Office reports a significant increase in litigation and
    counseling issues with a specific note regarding Equal Employment
    Opportunity (EEO) programs. The Department estimates that pending cases
    before the Equal Employment Opportunity Commission (EEOC) will be
    reduced by approximately 60. The Department also estimates that the
    number of new cases will continue to decline in fiscal year 1998 from
    its fiscal year 1996 levels.
        Question. What are the factors affecting this decline?
        Answer. As noted in the Departmental Management budget
    justification, policy guidance, training, and technical assistance have
    been provided to the bureaus to increase their effectiveness in
    resolving EEO allegations and complaints. The counseling program has
    resulted in the resolution of 79 percent of all pre-complaint
    allegations, and additional cases have been resolved through the use of
    alternative dispute resolution and settlement negotiations.
        A contributing factor in these successes may be the significant
    backlog of cases awaiting hearing at EEOC, which has resulted in fewer
    cases being scheduled for hearing in fiscal year 1997. This is likely
    to be only a temporary respite, as we are expecting EEOC to schedule a
    greater number of hearings in fiscal year 1998 to reduce its backlog.
    In the meantime, the EEOC backlog and attendant delays have influenced
    some complainants to opt for agency decisions without a hearing in
    order to obtain more expeditious consideration of their allegations.
        Question. What level of Office of the Solicitor involvement has
    assisted in the decline?
        Answer. The Solicitor's Office has been heavily involved in the
    efforts cited by the Department, including developing written guidance
    and providing training for managers and EEO officials. Some recent
    examples include our Office's active participation in development of
    the Department's zero tolerance policy on harassment and
    discrimination, and in EEO training for managers and EEO officials in
    Anchorage, Alaska; Rapid City, South Dakota; Albuquerque, New Mexico;
    and Denver, Colorado. We also have taken a proactive role in the
    development of effective diversity strategies and have provided
    extensive counseling in EEO matters. We believe these efforts have
    resulted in a better understanding of the EEO process and diversity
    issues by managers, and an increase in the effectiveness and
    professionalism of the bureau EEO staffs. This in turn has contributed
    to earlier resolution of complaints, as well as avoiding the filing of
    some complaints altogether.
        In addition, the Office is settling more cases prior to an EEOC
    hearing. The backlog in EEOC cases awaiting hearings has decreased our
    litigation work in fiscal year 1997, but it has substantially increased
    our work in providing legal review of the Department's decisions on
    complaints. There has been almost a 300 percent increase in our review
    of agency decisions over the comparable period last year.
        Question. What is the Solicitor's cost for processing these types
    of cases when settled informally, resolved formally, or heard by EEOC?
        Answer. We estimate that it costs our Office, on average, $170 to
    provide legal services in connection with a case settled at the
    informal stage (i.e., during EEO counseling); $2,280 for a case
    resolved at the formal stage (i.e., subsequent to the filing of a
    formal complaint but prior to an EEOC hearing); and $5,470 for a case
    heard by EEOC. Cases that proceed to an EEOC hearing are among the most
    labor-intensive and expensive in the Office, as our attorneys must
    provide a full range of litigation services without any assistance from
    the Department of Justice. The chart below shows the number of each
    type of case we expect to handle during fiscal year 1998, the average
    cost per case, and the total amount we expect to spend on these cases:

                                                COST OF PROCESSING CASES
                                                     [Whole dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                       Number of EEO     Estimated       Estimated
                                                                         cases \1\     average cost     total cost
    ----------------------------------------------------------------------------------------------------------------
    Informal stage..................................................              50             170           8,500
    Formal stage....................................................             135           2,280         307,800
    EEOC hearing....................................................             200           5,470       1,094,000
                                                                     -----------------------------------------------
          Total.....................................................  ..............  ..............       1,410,300
    ----------------------------------------------------------------------------------------------------------------
    \1\ Number expected in fiscal year 1998.

                        Office of the Inspector General
        Question. The OIG's statistical results are displayed on pages 4
    and 5 of the OIG's budget justification. Please provide the
    Subcommittee with comparative data for these items for fiscal year
    1992-1996.
        Answer. The information is provided in the following table.

                                      OFFICE OF INSPECTOR GENERAL COMPARATIVE DATA
    ----------------------------------------------------------------------------------------------------------------
                                                                       Fiscal year--
                                     -------------------------------------------------------------------------------
                                           1996            1995            1994            1993            1992
    ----------------------------------------------------------------------------------------------------------------
    AUDIT ACTIVITIES

    Audit reports issuedor processed             912             960             869           1,194           1,003
    Internal audits.................              64              60              82              85             102
    Contract audits.................              45              97             124             160             155
    Single audits...................             803             803             663             949             746
    Indirect cost proposals
     negotiated.....................             350             425             471             436             408

    IMPACT OF AUDIT ACTIVITIES--IN
     MILLIONS OF DOLLARS

    Total monetary impact...........          $294.3          $278.3          $879.8        $1,321.2        $1,333.2
    Questioned costs................           $16.3           $16.9           $47.9           $19.6           $15.5
    Recommendations that funds be
     put to better use..............          $191.9           $97.3          $380.6          $631.2          $291.8
    Lost or potential additional
     revenues.......................           $86.1          $164.1          $451.3          $670.4        $1,025.9
    Internal audit recommendations
     made...........................             188             211             321             429             430
    Internal audit recommendations
     resolved.......................             147             172             198             636             238

    ADMINISTRATIVE ACTIONS TAKEN BY
     BUREAUS

    Matters referred for
     administrative action..........             144             181             166             225             234
    Removals/resignations...........              15               7              15              18              15
    Employee suspensions............              13               7              10              16               3
    Number of days..................             284             101             330             319              40
    Downgrades......................               2               1               4  ..............               2
    Reassignments/transfers.........               5  ..............  ..............               3  ..............
    Reprimands/counseling...........              28              15              15              13              22
    Contractor suspensions..........               3  ..............  ..............  ..............  ..............
    Contractor debarments...........  ..............  ..............  ..............               5              11
    Other personnel action..........              12               1              18               3               3
    Other procurement remedies......               2  ..............  ..............               1               2
    Other administrative remedies...  ..............  ..............  ..............  ..............              28
    General policy actions..........              40              30              20              20  ..............

    INVESTIGATIVE ACTIVITIES

    Total reports issued............             163             159             185             181             184
    Cases closed....................             125             118             141             137             126
    Cases opened....................             238              81              94             110             107
    Cases pending...................             447             281             269             279             268
    Hotline complaints received.....             226             432             484             471             397
    Hotline referrals closed........             303             133             322             326             390
    Hotline referrals pending.......             104             326             287             310             287

    IMPACT OF INVESTIGATIVE
     ACTIVITIES

    Indictments/informations........              65              41              47              59              46
    Convictions/pretrial diversions.              45              25              36              51              58
    Sentencings.....................              37              41              40              52              60
    Jail (months)...................           1,480             341             519             365             858
    Probation (months)..............           1,992           1,536           1,890           1,796           1,700
    Community service (hours).......           1,324           1,050           1,824           2,703           4,450
    Cases referred for prosecution
     during year....................              81              57              76              83              72
    Cases declined..................              31              15              33              33              19
    Cases pending prosecutive
     action--end of year............             168             132             110             187              86
    Administrative actions..........             118              61              82              79             100
    Recoveries/restitutions--in
     millions of dollars............          $2.326          $1.810          $3.660          $3.449      \1\ $8.123
    Civil judgments--in millions of
     dollars........................           $.003          $9.952           $.948           $.008          $1.501
    Civil referrals.................              20               6               4               8               3
    Civil declination...............               4               4               4               3               2
    Civil judgments.................               1               3               3               1               2
    ----------------------------------------------------------------------------------------------------------------
    \1\ Fiscal year 1992 recoveries were substantially higher due to a $6 million fine in one case.

        The statistics reported in the Semiannual Reports to the Congress
    for fiscal year 1992 to 1996 revealed that the total number of audit
    reports issued or processed during that time declined 10 percent, from
    1,003 in fiscal year 1992 to 912 in fiscal year 1996, including a 37
    percent decline in internal reports--from 102 to 64, and a 71 percent
    decline in contract audit reports--from 155 to 45. The major factors
    contributing to the decrease in the number of internal and contract
    audits were: (1) the Chief Financial Officers (CFO) Act of 1990
    requirement to audit the Department's financial statements--this
    resulted in an increase of 23 staff years devoted to CFO audits between
    1993 and 1996; (2) reductions in audit staff--the number of auditors
    and analysts decreased 18 percent, from 225 to 184, in fiscal year 1992
    to 1996 because of a lack of funds to replace auditors who retired or
    otherwise left OIG; and (3) OIG travel funds have been reduced because
    funds have been used, in part, to absorb increased costs of salaries,
    statutorily mandated availability pay for criminal investigators, and
    other uncontrollable costs which were not funded over the years.
        A more detailed discussion of these factors and how they have
    impacted audit operations follows.
        CFO Act Audits. To fulfill the requirements of the Chief Financial
    Officers Act of 1990, the OIG has devoted an increasing percentage of
    staff to CFO audits. For example, in fiscal year 1993, about 26 staff
    years (11 percent of available staff) were charged to the five CFO
    audits performed for that year. By fiscal year 1996, we had fully
    implemented the CFO Act and performed 15 CFO related audits, which
    increased the resources required for these audits to 49 staff years
    (about 27 percent of available staff). The combination of staff
    reductions and increased resources devoted to CFO audits has greatly
    reduced the staff available to accomplish audits of programs and
    operations that have historically resulted in a large monetary impact.
        While we are taking steps to reduce the resources necessary to
    conduct CFO audits, increasing requirements related to CFO audits make
    that difficult. These requirements include: (1) additional steps
    required by the Federal Financial Management Improvement Act of 1996;
    (2) the General Accounting Office's request that the OIG use its
    Financial Audit Manual as the primary audit guidance for accomplishing
    CFO audits; and (3) additional reviews required by new Federal
    Accounting Standards Advisory Board Statements including: Statement No.
    4, Managerial Cost Accounting Concepts and Standards, Statement No. 5,
    Accounting for Liabilities of the Federal Government, and Statement No.
    8, Supplemental Stewardship Reporting.
        The CFO audits have resulted in significant improvements in the
    financial management systems within the individual bureaus and thus in
    the Department as a whole. However, these positive results are not
    reflected in the statistics in the Semiannual Report.
        Reductions in Audit Staff and Travel Funds. The combination of
    staff reductions as a result of budgetary restraints and increased
    resources devoted to CFO audits has greatly reduced the staff available
    to accomplish audits of programs and operations that have historically
    resulted in a large monetary impact. As noted earlier, between fiscal
    year 1992 and 1996, the audit staff was reduced from 225 to 184
    employees. Included in this reduction is a decrease from 30 to 16
    auditors in the Virgin Islands and Guam audit offices.
        In addition, the travel funds available to perform audits declined
    about 71 percent from fiscal year 1992 to 1996, from $1.1 million to
    $326,135. Because Departmental offices are in about 2,000 locations
    (some very remote), the number of audits we can perform has been
    impacted by the reduction in travel funds. During our reviews in recent
    years, we frequently were unable to visit the number of locations
    required to enable us to project audit results. Instead, we reported
    the monetary impact only for the locations visited. The reduction in
    travel funds has also impacted our ability to perform Nationwide
    royalty-related audits involving major oil and gas leaseholders.
        The reduction in the travel budget has especially impacted our
    ability to perform audits in the insular areas, which include the
    Virgin Islands, American Samoa, Guam, the Commonwealth of the Northern
    Mariana Islands, the Republic of Palau, the Federated States of
    Micronesia, and the Republic of the Marshall Islands. The total travel
    budget of our audit offices performing these audits (located in Guam
    and the Virgin Islands) has decreased from $110,000 in fiscal year 1994
    to $62,500 in fiscal year 1996 despite increases in airfares, per diem
    rates, and other travel-related costs during that time. The travel
    costs in these areas are especially high because of their remote
    locations (where we do not have permanent staffs).
        Reduction in Contract Audits. From fiscal year 1992 to 1996, the
    number of contract audit reports decreased from 155 to 45. However, the
    number of contract audits performed from one year to the next is not
    exclusively under the control of the OIG. Contract audits are performed
    based on a request from either a contracting officer or a grant manager
    or upon notification that the Defense Contract Audit Agency is
    scheduling an audit of a Departmental contractor. The number of audits
    of cost proposals requested by contracting officers decreased from 53
    in fiscal year 1993 to two in fiscal year 1996. Also, the number of
    audits of costs incurred by contractors performed by the Defense
    Contract Audit Agency decreased from 33 in fiscal year 1993 to 18 in
    fiscal year 1996. In addition, the number of special audit reports
    decreased from 40 in fiscal year 1993 to 13 in fiscal year 1996. The
    majority of these reports are prepared by the Defense Contract Audit
    Agency and are audits of the internal controls of major defense
    contractors. Other factors contributing to the decrease were: 1) the
    elimination of direct funding ($350,000 in fiscal year 1993) for OIG
    requests for audits by the Defense Contract Audit Agency after fiscal
    year 1993; 2) the staffing requirements of the CFO audits that reduced
    the number of auditors available for the OIG to perform contract
    audits; and 3) the decrease in BOR major dam construction activity as a
    result of a change in its mission that resulted in fewer requests for
    audits and smaller contractor claims to review. The OIG reports had
    typically identified significant savings in the past for these kinds of
    audits.
        Reduction in Monetary Impact Because of CFO Requirements, Reduced
    Staff, and Reduced Travel Funds. The CFO staffing requirements, reduced
    staff, and reductions in travel funding have impacted our ability to
    conduct audits (including follow-up audits) in the following areas
    where, historically, we have issued audit reports with significant
    monetary impacts and recommendations to improve Departmental
    operations.
        Bureau of Reclamation Audits. In fiscal year 1993 and 1994, we
    issued two BOR audit reports which accounted for about $400 million, or
    18 percent, of the total monetary impact reported by the OIG during
    that time. Some of the recommendations in these reports are still in
    the implementation process. Factors discussed above have impacted our
    ability to conduct similar audits and follow-up audits of BOR to
    determine whether the recommendations are fully implemented as
    intended.
        National Park Service Audits. During fiscal year 1992 and 1993, the
    OIG performed audits with major monetary impacts in concessions
    management, recreation fees, and special use fees. For example, in
    fiscal year 1993, the OIG issued one report on recreation fee charges
    and collections that had a monetary impact of $229 million. As a result
    of these audits, significant changes were made to revenue collections
    in the national parks. These kinds of audits involve large staffs.
    However, factors discussed above have decreased the staff and travel
    funds available to perform similar audits.
        Minerals Management Service Audits. During 1992 and 1993, the OIG
    conducted several Federal oil and gas royalty audits that had a high
    monetary impact. For example, our review of gas contract settlements in
    1992 resulted in recommendations that had a potential monetary impact
    of $754 million, and a review of offshore oil and gas leasing in 1993
    resulted in increased revenues to the Government of about $181 million.
    Factors discussed above have impacted our ability to conduct similar
    audits of MMS and follow-up audits to determine whether the
    recommendations were fully implemented as intended.
        Conclusion. While the number of audit reports and the monetary
    impact of the OIG program have decreased, we continue to evaluate our
    operations and to initiate new and innovative approaches to optimize
    the use of our resources to provide value and assistance to the
    Congress, the Administration, Departmental managers, and the taxpayers
    in building a Government that ``works better and costs less.'' The
    value of assisting in the identification and implementation of
    improvements in programs and operations cannot always be easily
    measured in dollars and cents. For example, over the past couple of
    years, we have attempted to be increasingly responsive to requests from
    the Congress and Departmental managers for our audit services. The
    audits and audit assistance we provided in this regard have resulted in
    substantial improvements in the programs and operations of the
    Department of the Interior.
               Office of the Special Trustee for American Indians
        Secretary Babbitt, we have been dealing with the difficult issues
    of the United States trust responsibility since the establishment of
    the relationship with Natives. In relatively recent years, say within
    the last decade, Congress has tried to tackle the task of reconciling
    Native land title records, Native land and natural resource management,
    and trust fund management. The United States has a trust responsibility
    in regard to the management of 40 million acres of tribal land and 10
    million acres of land owned by individual Indians, for which legal
    title is held by the United States. As trustee, the Government is
    responsible for managing the assets, collecting the income from them,
    and investing and disbursing the money collected. Congress has assigned
    management to you, the Secretary of the Interior.
        Congress created the Office of the Special Trustee (OST) in the
    Indian Trust Fund Management Reform Act of 1994. We did this in
    response to evidence that the Interior Department has failed to meet
    the basic obligations of a trustee.
        In 1996, the Office of Trust Funds Management and other trust
    services functions of the Bureau of Indian Affairs (BIA) were
    transferred to OST. As a result, OST now has the responsibility for
    trust moneys of Indian Tribes and individual Indians. Other trust
    functions, principally natural resource asset management activities,
    are still carried out by BIA, MMS, and BLM.
        The OST was directed by Congress to develop a Strategic Plan for
    trust management to ensure proper and efficient discharge of the
    Secretary's trust responsibilities.
        The Special Trustee submitted the Strategic Plan to you and to
    Congress in April--after the President submitted the Department's
    request for funding for the OST. I'd like to talk to you about the
    Department's formal request and the Special Trustee's plan.
        The President's Budget Request is for $39.337 million. This amounts
    to a $4.7 million increase related to program changes and $499 thousand
    in uncontrollable costs compared to the fiscal year 1997 enacted level
    of $34.1 million. The Budget Request includes $16 million for
    implementation of the Plan.
        Question. Will the Office move forward with the Special Trustee's
    Strategic Plan, which was submitted in response to Congressional
    mandate?
        Answer. The OST cannot move forward with its proposal to create a
    single organization to manage the U.S. Government's trust
    responsibilities to American Indians and American Indian Tribes for
    trust resource management, trust funds management and land title and
    records management (collectively, trust management activities).
    Implementation would require substantive changes in law.
        However, there are no legislative changes required for certain
    components of the plan, and some of these proposals are currently being
    implemented. For example, the Office of Trust Funds Management (OTFM)
    is continuing to make progress in an ongoing Individual Indian Money
    (IIM) data cleanup effort; elimination of land title and records
    backlogs will proceed in earnest if funding requested in the 1998 BIA
    budget for Land Records Improvements is approved by the Congress.
        In addition, acquisition of new systems should be able to proceed
    after a number of fundamental issues are addressed by the Special
    Trustee, including providing sufficient alternatives and benefit/cost
    analyses and preparing an adequate implementation plan. The proposed
    acquisition of a Trust Asset and Accounting Management System (TAAMS)
    will be reviewed pursuant to the requirements of the Information
    Management Technology Reform Act, (ITMRA) under the direction of the
    Department's new Chief Information Officer to ensure that the system
    meets these and other legislative requirements and is consistent with
    Administration policies.
        Question. What, specifically, will the OST accomplish in fiscal
    year 1998 with $39 million?
        Answer. The 1998 OST budget includes both ongoing operating funds,
    and funds for improvement efforts. About $20.6 million of the request
    supports on-going operations, and the remaining $18.7 million is for
    improvement initiatives.
        Operations.--Approximately $16.8 million of operations funding is
    allocated to OTFM and its area and field staff. These funds support the
    management of more than $2.5 billion in balances currently held in
    trust. Activity in the trust funds total more than $1.9 billion in
    receipts annually (including investment income) and $1.7 billion in
    disbursements. The 1998 funding for operations includes a modest
    increase of $0.2 million to fund the full cost of the annual lease
    trust system for tribal accounts; specifically, the funds will be used
    to support two sub-systems needed to comply with the Chief Financial
    Officers Act. Specific information on base operations is included in
    the Budget Justification as well as the fiscal year 1997 Semi-Annual
    Status Report submitted to the Subcommittee on June 19, 1997.
        Operations funding is also allocated to support ongoing settlement
    and litigation support. Specific information on base operations is
    included in the Budget Justification as well as the fiscal year 1997
    Semi-Annual Status Report submitted to the Subcommittee on June 19,
    1997. The 1998 request includes an additional $0.6 million required for
    the significant activities necessary to support the IIM litigation, as
    well as other litigation and settlement activities stemming from the
    tribal reconciliation project.
        A total of $1.7 million is requested under Executive Direction
    which supports the Immediate Office of Special Trustee, its advisory
    board, and the Intertribal Monitoring Association.
        Improvement initiatives.--A total of $16.8 million is requested
    under Strategic Plan-Systems; this amount is in addition to $13.4
    million appropriated in 1997 which largely remains available for
    obligation. Of the $30.1 million available for 1997 and requested for
    1998, the Special Trustee has proposed the following allocation to the
    various components of his Strategic Plan.

                                                   STRATEGIC PLAN COST
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                     Fiscal year--
                                                                 ---------------------------------------------------
                                                                   Strategic
                                                                   plan 1997-                            Total 1997-
                                                                  98  request  1997 budget  1998 budget   98 budget

    ----------------------------------------------------------------------------------------------------------------
    I. Standard trust asset and accounting management system and
     land title and records management system...................       15,933        6,050        4,687       10,737
        A. Trust asset and accounting management system (TAAMS).        8,237        4,800        3,437        8,237
        B. Land titles and records management system (LTRMS)....        3,196  ...........  ...........  ...........
        C. General ledger system (GLS)..........................        2,000  ...........  ...........  ...........
        D. Interface development................................        2,500        1,250        1,250        2,500
                                                                 ---------------------------------------------------
    II. Information technology infrastructure...................       13,215        1,511  ...........        1,511
        A. AITDA, BIA, MMS, BLM.................................       10,458        1,158  ...........        1,158
        B. Tribes including end-user training...................        2,757          353  ...........          353
                                                                 ---------------------------------------------------
          Subtotal systems costs................................       29,148        7,561        4,687       12,248
                                                                 ===================================================
    III. Data conversion, reconciliation and backlog clean-up...       27,535        2,000        4,000        6,000
        A. Probate Related Backlog clean-ups....................        6,000  ...........        1,000        1,000
            Agency..............................................        [600]  ...........  ...........  ...........
            Hearings and appeals/administration Law.............      [1,400]  ...........  ...........  ...........
            Land titles and records offices.....................      [4,000]  ...........      [1,000]      [1,000]
        B. File clean-up, data/document check...................        4,400        2,000        1,000        3,000
        C. IIM/Lease/subsystem conversion/reconciliation........        1,375  ...........        1,000        1,000
        D. LRIS conversion/owner reconciliation/defective title
         clean-up...............................................        2,600  ...........        1,000        1,000
        E. Imaging clean-up.....................................        3,160  ...........  ...........  ...........
        F. Appraisal clean-up and ongoing management............       10,000  ...........  ...........  ...........
                                                                 ---------------------------------------------------
    IV. Implementation..........................................       31,573        3,789        8,070       11,859
        A. Imaging..............................................        2,730          500  ...........          500
        B. Training AITDA, BIA, MMS, BLM........................        6,417  ...........        4,859        4,859
        C. Policy, procedure and legal manuals..................        4,000        2,000        1,000        3,000
        D. Risk management......................................        4,520  ...........  ...........  ...........
        E. Archives and records management......................       10,406  ...........  ...........  ...........
        F. External professional services.......................        3,500        1,289        2,211        3,500
    V. Management...............................................        3,687  ...........  ...........  ...........
                                                                 ---------------------------------------------------
          Total.................................................       91,943       13,350       16,757       30,107
    ----------------------------------------------------------------------------------------------------------------

        The Special Trustee's Strategic Plan is ambitious--and, I
    understand that you, the Administration, and OMB oppose it.
        Question. Why?
        Answer. The Department believes that the Special Trustee's
    Strategic Plan goes beyond the objectives of the American Indian Trust
    Fund Management Reform Act. This Act specifically states that the
    office was established to oversee and coordinate reforms of
    Departmental practices relating to the management and discharge of
    Indian trust responsibilities to ensure that reform of such practices
    in the Department are carried out in a unified manner. The Department
    does not believe the Act envisioned fully removing trust accounting and
    management functions from the Department.
        The plan recommends major investments to bring Indian trust asset
    management functions up to commercial trust standards, without
    providing sufficient alternatives and benefit/cost analyses to support
    the proposed level of investment. Such analyses are required by the
    Clinger-Cohen Act (ITMRA) and envisioned by the Trust Reform Act and
    its legislative history.
        The plan's usefulness to the Administration and Congress is limited
    because it only offers one model, the creation of a Government
    Sponsored Enterprise (GSE). Inherent in this proposal is the assumption
    that the Congress will be able, in these tight budgetary times, to
    adequately fund a stand alone GSE which would provide enhanced
    financial and banking services to 300 Tribes and 300,000 individual
    Indians. Such an assumption is unrealistic, given the numerous
    competing demands the Government faces to fulfill its current
    responsibilities.
        Additionally, given the Special Trustee's own assessment that BIA
    trust functions have been seriously underfunded and understaffed, the
    Administration questions the conclusion that BIA could not perform
    these functions if it was provided adequate resources--particularly if
    improvement efforts were overseen by a Special Trustee with budgetary
    control over improvement dollars, as proposed in the President's 1998
    Budget request. Indeed, a number of such improvements to trust funds
    management were implemented prior to the transfer of financial trust
    services to OST. While some reorganization of trust functions within
    BIA or the Department may be warranted, the Administration simply
    cannot support the separation and dissipation of the government-to-
    government trust relationship that would result if this proposal were
    implemented.
        The Special Trustee has asked us to appropriate $80-$100 million
    for fiscal year 1998, compared to the Department's $39 million request.
    There is a gap of almost $50 million between the President's request
    and the Special Trustee's request, just through 1998. In addition, the
    Special Trustee states that an additional $76 million would be required
    in 1999; and between $56 million and $61 million would be required
    thereafter in on-going recurring costs for Phase I.
        In the first phase, the Special Trustee proposes the creation of an
    ``American Indian Trust and Development Association'' (AITDA), a new
    independent government enterprise. Authority, responsibility, and
    funding of all Indian trust activities are proposed to be transferred
    to AITDA, including natural resource management and land records and
    title functions of BIA; inspection and enforcement of oil and gas
    leases on Indian lands by BLM; and royalty management of Indian leases
    of MMS.
        Phase I of the Strategic Plan is designed to bring the trust
    management and management information systems up to commercial
    standards within two years. The Special Trustee says he needs $80-$100
    million in each of the next two years to accomplish all of this.
        In total, implementation of the Special Trustee's recommendation
    for Phase I would mean transferring about $250 million from the budget
    of the Department of the Interior to the American Indian Trust
    Development Association.
        I understand that OMB, the Administration, and you, personally,
    oppose the Strategic Plan.
        Question. Do you support this part of the Special Trustee's plan?
        Answer. The Administration does not support transferring funding
    and responsibility for Indian trust management activities from the
    Department to the American Indian Trust and Development Administration,
    a new independent government enterprise.
        Question. Do you oppose it because it will cost too much to the
    Department, or do you disagree with the idea generally? What do you
    object to?
        Answer. The Administration does not simply oppose the plan because
    it costs too much. The plan recommends major investments to bring
    Indian trust asset management functions up to commercial trust
    standards, without providing sufficient alternatives and benefit/cost
    analyses to support the proposed level of investment. Such analyses are
    required by the ITMRA and envisioned by the Trust Reform Act and its
    legislative history.
        The Administration objects to the removal of Indian trust resource
    management functions from the Department and the broadening of the
    Department's investment responsibilities. Rather than expanding
    financial services to Tribes and individuals, we should be
    concentrating our efforts to improve the performance of our current
    responsibilities. Additionally, while there is general agreement about
    the need to replace or acquire new systems, the Administration has
    serious concerns about the level of analysis and implementation details
    supporting the systemic recommendations in the plan.
        Question. How much of your objection to the idea of moving all
    trust functions into a single agency relates to a fear of what the loss
    of $250 million of Interior Department funding would mean?
        Answer. None. However, the Department would object to
    redistributing this level of funding from other programs in the
    Department, or elsewhere from the Federal Government, given the current
    level of analysis prepared in support of the Special Trustee's
    recommended funding levels.
        I have heard that some Tribes have expressed concerns over this
    proposal, claiming that they do not think the Office of the Special
    Trustee will be able to manage these functions.
        Question. Have you heard from the Tribes on the idea of
    consolidating all trust management functions into a single agency? Do
    they support consolidation? Why or why not?
        Answer. The Special Trustee's Strategic Plan does not propose to
    move all trust functions to the Office of Special Trustee; rather the
    plan proposes a single organization, distinct from OST, to perform
    trust management activities, and would operate as follows, per the
    Strategic Plan:
        This will involve consolidating trust resource, trust funds and
    land ownership and records management processes into a single,
    independent institutional unit with its own management structure to
    accommodate the restructuring and reorganization contemplated by Phase
    I of the Strategic Plan. The unit should be organized by function and
    dedicated exclusively to trust management. The unit should be managed
    by a full time Chairman and a Board of Directors appointed by the
    President and confirmed by the Senate. The unit's proposed
    organizational form is as an independent GSE subject to Congressional
    oversight.
        A majority of the participants in the consultation hearings on the
    Special Trustee's draft Strategic Plan preferred that the management of
    natural resources remain with BIA and Self-Governance Tribes, rather
    than be transferred to AITDA as proposed in the draft Strategic Plan.
    The Special Trustee believes he has adopted this preference in the
    final Strategic Plan by proposing that resource management functions
    will continue to be performed by BIA, but will be subject to the
    oversight of AITDA. The AITDA will have authority and budget control
    (all funding is proposed to be appropriated under AITDA) over natural
    resource management and will out source such activities to BIA, which
    will act as a service bureau to the Trustee.
        The Tribal Consultation Report on the Draft Strategic Plan has been
    previously provided to the Subcommittee. The following letters are
    additional written comments received subsequent to the issuance of the
    Strategic Plan on both the draft plan and the final plan, for the
    Subcommittee files.
        [The letters follow:]
                Letter From the Council Annette Islands Reserve
                                   Metlakatla Indian Community,
                                        Metlakatla, AK, March 24, 1997.
    House of Representatives,
    Interior Appropriations Subcommittee,
    Washington, DC.
        Mr. Chairman: Our tribe recently received a copy of the draft
    ``Strategic Plan to Implement the Reforms Required by the American
    Indian Trust Fund Management Reform Act of 1994''.
        While certain aspects of the Plan have merit, we are concerned that
    a majority of the Plan needs more careful study. The Special Trustee
    has recommended that trust management duties, responsibilities and
    activities, including Trust Resources Management, Trust Funds
    Management, and Land Title and Records Management be transferred to a
    new government sponsored organization outside the Department of the
    Interior. The proposed plan would fundamentally change the way American
    Indian trust activities are managed by the Federal Government and needs
    considerable review and examination.
        In its current form, the Plan does not provide sufficient
    information as to how the Plan is intended to address a range of key
    issues such as funding and accountability. In addition, it is not clear
    that the Plan would succeed in establishing a more effective trust
    management, nor is it clear that the Plan will protest the principles
    underlying federal trust responsibility.
        In that regard, we strongly urge restraint in any appropriations
    which would implement any portion of the proposal as it relates to
    removal of further functions from the Bureau of Indian Affair.
        We expect to continue our review and actively participate with
    other tribes in evaluating the Plan. As you know, plans for Indian
    Country of the past have not worked well when they don't have the full
    participation of the tribes in their development. We will expect to
    communicate further with your committee as the process moves forward.
                Sincerely,
                                              James E. Scudero,
                                                          Acting mayor.
                                     ______

                         Letter From the Klamath Tribes
                                            The Klamath Tribes,
                                         Chiloquin, OR, April 10, 1997.
    Re Response to the OST strategic plan proposal.

    Mr. Bruce Babbitt,
    Secretary, Department of the Interior,
    Washington, DC.
        Dear Secretary Babbitt: By this letter the Klamath Tribes will make
    known its position and opinions concerning the proposals being
    forwarded by the Office of Special Trustee (OST).
        The Klamath Tribes resolutely and steadfastly reject the
    recommendations being presented by the OST. We base our rejection upon
    the following:
      --1. The OST has not consulted properly with Tribes. The four
            regional meetings conducted by OST do not and can never be
            considered as consultation with the 535 tribes.
      --2. The answers to questions raised at the four meetings have not
            been distributed to the tribes with sufficient time to review,
            analyze and understand the answers. The questions posed were to
            issues which cut to the heart of the federal/tribal
            relationship.
      --3. The Tribes were not involved in the formulation of the charge to
            the OST, nor involved in the development of the OST agenda.
      --4. The creation of a development bank may be a reasonable idea, but
            the bank should not be used as a means to gain control of
            Indian monies and land.
      --5. The recommendations of OST appear to define trust responsibility
            to mean only trust as it applies to monetary accounts and land
            issues, all other trust related responsibilities of the Federal
            Government are dismissed as governmental responsibilities. This
            redefinition of trust responsibility is tantamount to financial
            and political termination of the tribes.
        Lest you believe the Klamath Tribes may not understand the issues
    or the implication of the recommendations of the OST, I would like to
    provide you with some information which will give you context for our
    Tribes' response.
        The Klamath Tribes has been intently following those issues which
    led to the formation or the OST. Like most people, the Klamath Tribes
    suspected there might have been mismanagement with the monetary
    accounts of tribes and individual Indians. But unlike most, the Klamath
    Tribes has had first hand experience with the federal government's
    mismanagement of tribal and individual tribal members financial and
    land affairs through that great injustice of the mid-fifties called
    termination.
        During the termination era Klamath's had their land and resources
    taken from their control and were forced to either accept a single cash
    payment or have your assets placed into a special trust administered by
    a bank.
        Some members chose the single cash payment and others had their
    assets placed in control of a bank. The emotional and spiritual scars
    of this arrangement notwithstanding, the assignment of tribal members
    assets to a special trustee led to a whole catalogue of abuses which
    the tribe was powerless to stop. The special trustee sold lands and
    assets and resisted any and all attempts by tribal members for an
    accounting of the assets and land sales. In addition the special
    trustee charged the tribal members accounts to support their brutal
    mismanagement of Indian assets and monies. Meanwhile, tribal members
    were literally forced to beg the special trustee for access to their
    own funds. And the Special Trustee could and did determine how much
    money and when a tribal member could access their funds.
        I can continue with a litany of other equally horrific tales of my
    people's experience with banks and Special Trustees, but suffice it to
    say the Klamath Tribes will not agree to the recommendations and will
    steadfastly resist any and all attempts by the Federal Government to
    implement the current OST recommendation.
        The Klamath Tribes would however, support a position whereby the
    Tribes can become an active participant in the crafting and development
    of recommendations on how best to address the issues of the
    fractionated lands, development banks and trust responsibilities and
    services required of, and provided by, the U.S. Government. If I can
    provide you with any additional information on this topic, please feel
    free to call upon me.
                Sincerely,
                                              Jeff C. Mitchell,
                                                       Tribal Chairman.
                                     ______

                    Letter From the Tigua Indian Reservation
                              Tigua Indian Reservation,
                                         Ysleta Del Sur Pueblo,
                                           El Paso, TX, March 27, 1997.
    Hon. Bruce Babbitt,
    Secretary of the Interior,
    Washington, DC.
        Dear Mr. Babbitt: Enclosed are comments from the Ysleta del Sur
    Pueblo regarding the Draft Strategic Plan Proposed by the Office of the
    Special Trustee for American Indians.
        Overall, the Pueblo is opposed to the plan since it appears to be
    in the best interest of big government. The Pueblo feels the plan
    focuses on creating another bureaucratic tier without any assurance of
    its success. Duplication of services is not the solution in our
    opinion.
        Should you have any additional requests, feel free to call us at
    (915) 859-7913.
                Sincerely,
                                                 Vince Munoz, Governor.
        Attachment:
                                     ______

                            Ysleta del Sur Pueblo's
       comments on the draft strategy plan proposed by the office of the
                      special trustee for american indians
    Revampment yes. More bureaucracy, no.
        The Ysleta del Sur Pueblo agrees that there needs to be a
    revampment of the current trust funds management system, however,
    disagrees with the methods proposed by the Special Trustee. We support
    reform efforts that would strengthen regulatory standards and practices
    for the management and accounting of trust funds, as well as agree to
    the need for reconciliation and updating of land titles and records. We
    further support efforts to update and centralize record keeping
    systems, but creating an entirely separate bureaucratic tier in order
    to do this seems ludicrous. It seems to us that strong sanctions
    penalizing the mismanagement and misaccounting of trust funds would be
    a stronger message to send than just ``Let's start all over.'' We
    should alleviate the problem, not make it worse which is what we think
    is going to result from this new system.
    Strategic plan poses questions as to whether a separate organization is
            needed to handle trust mismanagement issues and carry out the
            Government's trust responsibility.
        The plan suggests that the American Indian Trust and Development
    Administration (AITDA) will assume the legal trust responsibility while
    the BIA will continue to address areas of general trust responsibility
    and continue providing other services which have been scrutinized. If
    the plan is approved, the efforts of the Reorganization Task Force will
    prove to be futile. The entire goal of the Task Force is to diminish
    the BIA, however, this plan will only make it that much more difficult.
    What about funds to operate this new system? Where will they come from?
    Will the AITDA compete for the same limited financial resources? It
    seems hypocritical that the Special Trustee identified the competition
    for scarce financial resources as a reason for trust resource
    mismanagement, yet under this plan would be doing the exact same thing.
        Talk about starting big. There are five management sections with 43
    divisions for Phase I alone. This organizational set up is not
    justified. How much will it cost the tribes to fund the AITDA? This
    tribe would be interested to see a budget inclusive of start up costs
    and salaries being that they will most likely be commensurate to those
    in the private industry. The tribes will be affected by this proposal
    in one way or other, regardless of how much they say it will not.
    Conclusion
        We stress the need for change within the current trust funds
    management system, however, are not convinced that the creation of a
    separate organization is justified, nor necessary.
                                     ______

       Letter From the Inter-Tribal Council, of the Five Civilized Tribes
                                                     February 28, 1997.
    Hon. Hilda Manuel,
    Deputy Commissioner of Indian Affairs,
    Bureau of Indian Affairs,
    Washington, DC.
        Dear Ms. Manual: The Choctaw Nation of Oklahoma is very concerned
    in regard to the proposed transfer of all trust management duties,
    responsibilities and activities carried out by the Bureau of Indian
    Affairs to newly created Government entity.
        I am requesting that Muskogee Area Director of the Bureau of Indian
    Affairs, Jim Fields, and the appropriate support staff attend a meeting
    scheduled for March 12, 1997, in Albuquerque, New Mexico to provide
    technical assistance to Muskogee Area Tribes at this meeting.
        A copy of the letter from special trustee Paul Homan is attached
    for your informal. Your consideration in this matter will be
    appreciated.
                Sincerely,
                               Chief Hollis E. Roberts,
                               President, Inter-Tribal Council,
                                             the Five Civilized Tribes.
                                     ______

                           Letter From the Kaw Nation
                                          Kaw City, OK, March 24, 1997.

    Re Comments to the Consultations for the ``Draft Strategic Plan''
            proposed by the Special Trustee for American Indians.

    Mr. Paul M. Homan,
    Special Trustee for American Indians, U.S. Department of the Interior,
            Office of Special Trustee for American Indians, Albuquerque,
            NM.
        Dear Mr. Homan: The Kaw Nation recognizes and appreciates the hard
    work, commitment, and diligence you, your staff, and the Office of
    Trust Funds Management have demonstrated in the reconciliation and
    acknowledgement of the problems with the American Indian IIM and tribal
    trust funds. There are many more years (100's) of problems with the
    recording and management of Indian land, natural resources, and money.
    The very short period officially examined by the Office of the Special
    Trustee (OST) only exhibits a near term problem compounded by over 100
    years of poor records. Treaties, legislation, Court Decisions,
    agreements, etc. with Indians have not been thoroughly abided to by the
    Federal Government according to its Trust Responsibilities and
    Fiduciary Duties.
        The many problems in the management, documentation, accounting, and
    recording of Indian land transactions, management of Indian natural
    resources, continued due diligence in the reconciliation of past
    problems, and the management recording, and accounting of trust funds
    needs perpetual dedication, oversight, management, and reconciliation.
    The ``new (relatively) BIA'' is much different than the ``old BIA'' in
    that it is staffed with a majority of Indian people who are dedicated
    to tribal and Indian needs. However, the current employees of the
    Bureau are ``stuck'' with poor record-keeping, poor accounting, not
    enough funding/staff, and lack of separation of duties (Trust Functions
    vs. general trust responsibilities). They are building upon poor
    management/accounting and because of this poor base, they can only
    compound the situations and problems.
        The Kaw Nation, at the March 12, 1996 OST Strategic Plan
    Consultations, was represented by Walter I. Hare, Jr., Kaw Nation
    Administrative Services Director. In addition, the Kaw Nation has been
    in possession of the written ``draft'' Strategic Plan and the Special
    Trustee's Assessment, although only for a short period of time prior to
    the Consultations in Albuquerque.
        The Kaw Nation does not agree with the dismantling of the BIA and
    the removal of the Trust Functions from the Department of the Interior
    to any ``independent government sponsored entity.'' However the
    Strategic Plan's recommendation for a ``modern, up-to-date, and
    technology up-grading system'' is an intelligent and workable concept.
    For many years, as evidenced by the immediate past and the
    Reorganization Task Force, the Honorable Senator John McCain's Senate
    Bill to re-organize the BIA, the OST reconciliation efforts, and even
    the 1978 BIA Reorganization task force, attempts to address the many
    problems have been studied recommended, and continue to collect dust. A
    re-organization/re-structuring of the BIA is entirely possible using
    your ``technological modernizations, including constant up-grading''
    and general organizational chart, only within the BIA and/or the DOI,
    if properly structured.
        The TDbank as an independent government sponsored entity (e.g. Farm
    Credit Bank) including life-line/full service banking, depository
    accounts, investment services, retirement accounts for tribes/Indians,
    some trust department services, etc., is credible and needed. The
    funding for start-up and operations, including subsidies, will be a
    problem that can be addressed in the near future. The Kaw Nation
    currently owns and 100 percent manages a small, but highly successful,
    Bingo Hall, a full service travel plaza, Kansa Travel Plaza on
    Interstate-35, that includes gasoline/diesel fuel, a convenience store,
    a restaurant, and a motel; two smokeshops; over 54,000 sq. ft (Kanza
    Greenhouses--14 greenhouses, warehouses and office/maintenance
    building) Greenhouse enterprise; a retail greenhouse within Ponca City
    city limits; a pharmacy; and is examining future business operations in
    Oklahoma and Kansas. In addition, the Kaw Nation is currently
    constructing and/or planning a Gymnasium/Community Multi-purpose
    facility, a wellness center that includes an indoor swimming pool,
    cardiovascular and physical therapy services, weight room and aerobics
    rooms, etc; a new clinic for rural health services, and a museum/social
    services building. The life-line banking services could greatly assist
    the Kaw Nation in the management of current resources and future
    Economic and Business Development activities.
        In addition, the Kaw Nation participates as a Self-Governance tribe
    in both the Department of the Interior's and the Indian Health Services
    Programs. The clinic, gymnasium/community multi-purpose center, and
    wellness center are located in Rural areas and will fulfill much needed
    rural health and recreational unmet needs. However, the maintenance and
    operations costs for the facilities will be expensive and the Kaw
    Nation is investigating assisted living for the elderly and additional
    services.
        If you have any questions, you may contact me or Walter I. Hare,
    Jr., Administrative Services Director, at the address and phone numbers
    listed on Kaw Nation letterhead. The fax number is (405) 269-2301.
                Respectfully,
                                                   Wanda Stone,
                                                   Chairperson and CEO.
        Question. Why do you think the Tribes oppose the idea? The BIA has
    done an awful job.
        Answer. The Tribes reasons for opposing consolidation of trust
    functions are varied and are outlined in the consultation report and
    the additional written comments provided to the Subcommittee.
        Question. Would you agree with the idea of consolidating trust
    management functions assuming that professionals in the areas of
    records management, natural resources management, and oil and gas
    leasing were hired into the agency?
        Answer. At this juncture, the Department does not support
    consolidation of trust management activities in the manner proposed by
    the Special Trustee. However, some consolidation may be desirable. Any
    proposal to consolidate trust management functions either within or
    outside the Department must be carefully evaluated against other
    organizational alternatives based upon a complete understanding of
    mission and underlying activities, core processes, and resources; be
    supported by a detailed implementation plan; and involve substantive
    tribal consultation.
        Question. Could Tribes continue to contract for these functions, as
    they do now from the various agencies? I don't see why they couldn't.
        Answer. Yes; the Strategic Plan proposed by the Special Trustee
    envisions that Tribes will continue to have the ability to contract or
    compact trust functions under the Self-Determination Act and Self-
    Governance Act. Specifically, the Strategic Plan states:
        Like a private trustee, the proposed administration of the trust
    activities would rely on a common set of laws, policies, practices,
    regulations, and a common Trust Asset and Accounting Management System
    and a means through annual audits and reviews and administrative
    oversight and supervision to assure performance by the Self-Governance
    Tribes. The Self-Governance Tribes would act as service bureaus under
    delegated authority from AITDA to provide trust management services for
    which they had expertise. Thus, increasingly in the future, service
    bureau management of nearly all of the trust management activities
    could and should be provided by qualified Tribes or American Indians,
    themselves, under appropriate compacts and contracts, subject to the
    rules, oversight and supervision of the Federal trustee.
        The Special Trustee proposes that during Phase 2, the AITDA would
    transform into the American Indian Trust and Development Bank--a full
    service banking, trust, and financial service for individual Indians
    and Tribes. It would include a national headquarters building, a
    national archives and records center, and nationwide branch offices.
    The Federal Government would provide $500 million in equity
    contributions and $3 billion in direct long-term loans, and would be
    required to maintain permanent equity capital equal to five percent of
    assets.
        Question. Do you support this part of the plan? It is a purely
    financial function.
        Answer. The Administration does not support the establishment of a
    Federal American Indian Trust and Development Bank to fulfill the
    requirements of the American Indian Trust Fund Management Reform Act.
    However, full banking services are often not available in Indian
    Country, and the Administration has developed legislative proposals to
    address the absence of such services. In 1996, the Administration
    proposed the Native American Financial Services Organization Act to
    provide technical assistance to local lending institutions with the
    intention of overcoming barriers to housing and community development
    lending to help improve Native American housing and economic
    situations. Similar to the Administration's position on Phase 1 of the
    plan, the Administration would not support Phase 2 without a clear
    examination of alternatives and benefit/cost analyses.
        Question. Are you opposed to specific parts of the plan or to the
    entire plan? If you are opposed to only parts, which parts? Which parts
    would you support, and why?
        Answer. The Administration objects to the removal of Indian trust
    management functions from the Department and the broadening of the
    Department's investment responsibilities. Rather than expanding
    financial services to Tribes and individuals, we should be
    concentrating our efforts to improve the performance of our current
    responsibilities.
        There is agreement on the components of the plan relating to the
    clean up of the accounts and elimination of trust asset processing
    backlogs; however, the cost estimates to eliminate these backlogs are
    not fully substantiated and may be overestimated or underestimated.
    There is also general agreement to improve or replace systems; however,
    the Administration has serious concerns about the level of analysis and
    implementation details supporting the systemic recommendations in the
    plan.
        Question. If you, the President, and OMB oppose the Special
    Trustee's plan, what is happening over at OST right now? What do you
    propose for the Special Trustee? Is Congress spending money wastefully
    to continue to fund this office if the Administration will not support
    it?
        Answer. The Special Trustee has been requested to address a number
    of fundamental concerns regarding his proposal, including ensuring that
    the requirements of the Clinger-Cohen Act and OMB guidance on systems
    acquisitions are met; developing a realistic implementation plan; and
    coordinating with impacted Bureaus. The Administration supports
    effective implementation of the Office of Special Trustee as envisioned
    in the American Indian Trust Fund Management Reform Act. That is, an
    office that would ensure Indian trust reform efforts were coordinated.
    The funding requested in the President's Budget for the immediate
    Office of Special Trustee is necessary to perform the activities
    envisioned in the Act.
        In a press release commentary on the plan, Mr. Secretary, you were
    very critical of the plan's overall direction, saying it adds another
    layer of bureaucracy by creating a quasi-private, quasi-government
    agency to manage and administer trust funds. In the press release of
    your commentary you also express concerns that the plan seems to lack a
    fundamental understanding of the relationship between sovereign tribal
    governments and Federal trust responsibility.
        Question. What do you think the Federal trust responsibility
    entails? Where does it begin? Where does it end? Does it end?
        Answer. The United States unquestionably has a trust responsibility
    with respect to the administration of Indian trust funds and assets,
    and this responsibility carries with it the fiduciary duties attendant
    to a trust relationship. The Government's trust obligations arise
    whenever the United States exercises sufficient control over, or
    management of, trust property or trust money of Indian Tribes or
    individual Indians that the necessary elements of a common-law trust
    are present: a trustee (the United States), a beneficiary (the Tribe or
    individual Indian), and a trust corpus (timber, lands, funds, etc.).
    The trust responsibility does not extend to strictly commercial moneys
    that are the proceeds of Indian business enterprises, such as gaming
    revenues or revenues from tribally-owned firms.
        In general terms, the Supreme Court has described the trust
    responsibility as a moral obligation of the highest responsibility and
    trust. The more specific contours of the fiduciary relationship are
    defined by statutes, regulations, treaties, and executive orders.
    Congress has enacted a variety of statutes vesting the Secretary with
    the authority and responsibility to maximize returns from the
    management of individual Indian and tribal assets and investment of
    individual Indian and tribal trust funds, consistent with the specific
    requirements of the statutory provisions. There also are a number of
    other statutory provisions delimiting the Government's trust
    responsibility, including specific requirements for the disbursement,
    transfer, deposit, and investment of Indian tribal and individual trust
    funds, as well as related regulatory provisions.
        Courts also have relied on common law trust principles to
    supplement the various statutes and regulations in defining the United
    States' fiduciary obligations. Accordingly, the Government, like a
    private trustee, has a general obligation to exercise such care,
    diligence, and skill in managing and dealing with the trust property as
    a person of ordinary prudence would exercise in dealing with his or her
    own property. The United States must administer trust resources in the
    interest of the beneficiary, so that any profits gained through
    administration of the trust accrue to the beneficiary. The Government
    must promptly place trust income into interest-bearing accounts, and
    maximize trust income through prudent investment. The United States
    also has an obligation to make a full and proper accounting and to keep
    clear and accurate accounts.
        At the same time, courts also have recognized that the Government's
    trust obligation is unique and distinctive, in that Congress has
    required the Government to wear many hats and perform many functions,
    some of which may be in direct conflict. In this regard, the Government
    may not always be able to follow the fastidious standards of a private
    fiduciary, who would breach his duties to his single beneficiary solely
    by representing potentially conflicting interests without the
    beneficiary's consent. Consequently, all rules governing the
    relationship between private fiduciaries and their beneficiaries may
    not necessarily apply in every situation; rather, the precise scope of
    the fiduciary obligation of the United States must be determined in
    light of the relationship between the Government and the particular
    Tribe.
        In sum, the United States' trust responsibility with respect to the
    management and administration of individual Indian or tribal trust
    funds or property is best understood as comprising various statutory,
    regulatory, and other directives, as supplemented by common law
    principles applicable to trusts and trustees. Its application in each
    situation may differ depending on the context and particular
    authorities at issue, but may be guided by the Government's affirmative
    duty to ensure that tribal and individual Indian trust property and
    trust funds are protected, preserved and managed in a diligent and
    prudent manner, so as to produce a maximum return to the Tribes and
    individual Indian owners, within applicable statutory or other
    regulatory requirements.
        Specifically, the current investment authority for Indian trust
    funds is limited. Investments are limited to direct investments in U.S.
    Government securities (Treasury and other agency issues) and insured
    deposits or deposits collateralized by U.S. Government securities. The
    Special Trustee proposes a whole new range of trust management
    products, including savings deposits; voluntary tribal and IIM deposits
    from all sources, including gaming revenue; income from Federal
    taxation; and acceptance of retirement accounts.
        Question. Does the Federal trust responsibility go as far as the
    Special Trustee's plan proposes?
        Answer. No. The Federal trust responsibility does not require
    acceptance of voluntary deposits or provisions of the additional trust
    management products proposed by the Special Trustee.
        Question. Do you believe that the Federal Government's trust
    responsibility extends into ``private banking'' for Natives?
        Answer. No, however, the Administration is very supportive of
    efforts similar to the proposed Native American Financial Services Act
    to ensure that Native Americans are afforded banking services that most
    Americans take for granted.
        On previous occasions, you've expressed the view that the
    management of trust funds should be handled by a financially-oriented
    organization like Treasury or the Federal Reserve.
        Question. Why not support this plan, which proposes moving trust
    funds out of BIA? Wouldn't this be the solution you've been advocating?
        Answer. The Department's expertise is in natural resources
    management. The Department has felt that the purely financial
    management components of trust funds could be better handled by
    financially oriented organizations who deal with these issues on a day-
    to-day basis as part of their core mission. The Department has never
    advocated movement of land management functions to a financial
    organization as the Special Trustee has recommended.
        Question. If you do not support the plan, why should the Committee
    provide the $16.7 million included in the President's Budget Request to
    implement the Strategic Plan?
        Answer. The Department believes there is general agreement about
    the need to acquire adequate systems, cleanup accounts, and eliminate
    processing backlogs, for which the $16.7 million is necessary. In
    brief, the current status of BIA/OST systems can be characterized as
    follows:
      --we have an inadequate IIM accounting system;
      --we have no overall accounts receivable/tickler systems;
      --we have no overall trust resource/asset management (including lease
            management) system; and
      --improvements to land records systems are necessary to improve
            efficiencies.
        The Department believes supporting systems (e.g., records
    management) also may require improvements. Additionally, current
    systems are not integrated, which creates inefficiencies. The lack of
    overall systems have necessitated that BIA Areas and Agencies develop
    their own local systems, which are sometimes manual. Such systems are
    difficult to audit on a comprehensive basis, and therefore we can not
    easily demonstrate proper management of our trust responsibilities.
    Current systems that meet BIA and OST needs appear to be available off-
    the shelf (IIM, accounts receivable, and trust resource).
        Additionally, there is an urgent need to commence a thorough clean-
    up of the probate backlog, the IIM and Tribal account files, the land
    and title records backlog, and the appraisals backlog. Delaying this
    necessary process will make it impossible for the Government to comply
    with the requirements of Section 101 of the Act for the foreseeable
    future exposing the Government to increasing liability. Because
    Interior does not have the internal financial and managerial resources
    to conduct the clean-up effort, this initiative should be out-sourced
    to independent contractors. The Strategic Plan contains an action plan
    for each of the clean-up reforms. The information and cost estimates in
    the plan were developed by the Office of Special Trustee and have not
    been verified. For example, the Land Titles and Records Offices (LTRO)
    and Office of Hearings and Appeals probate related backlogs may be
    overestimated; the agency probate backlogs may be underestimated.
        The President's Budget request was released before the Special
    Trustee published his Strategic Plan.
        Question. In light of the Special Trustee's proposal, does the
    Administration wish to amend its budget request for fiscal year 1998?
        Answer. No. At this juncture, the Department believes that the 1998
    President's Budget will be sufficient to implement agreed upon reform
    efforts.
        Question. Has the Special Trustee laid out alternatives for you to
    his plan? If you do not like his plan, what do you propose to address
    the problems, and can you do it within the President's request?
        Answer. The Special Trustee did not adequately lay out alternatives
    in his Strategic Plan, or present an adequate implementation plan. The
    Department has requested the Special Trustee to do so, and a response
    has recently been received and is under review. At this juncture, the
    Department believes that the 1998 budget request should be sufficient
    to perform implementable activities in 1998.
        In the press release I have seen of your comments, you also
    expressed the opinion that the plan requires large, new budget outlays.
        Question. Would you please elaborate on your concerns about the
    budget impact? If Congress decides that an independent agency is just
    what the doctor ordered, what accounts and programs do you recommend
    that we reduce to raise the additional $50 million or so for fiscal
    year 1998?
        Answer. The plan recommends major investments to bring Indian trust
    asset management functions up to commercial trust standards, without
    providing sufficient alternatives and benefit/cost analyses to support
    the proposed level of investment. The Department therefore would not
    support reducing any accounts anywhere in the Government to raise the
    additional funds the Special Trustee has proposed in his Strategic
    Plan.
        Mr. Secretary, we've only scratched the surface on this issue,
    today. Clearly, there is a great deal of concern over how or whether
    the Federal Government is meeting its trust function, in particular,
    the management of the trust funds. I don't think the budget
    justifications for the fiscal year 1998 budget for the Office of the
    Special Trustee sufficiently explains any strategy or plan.
        Question. If you and this Administration do not support the
    Strategic Plan of the Special Trustee, which this Administration chose
    for this job, when can we expect to see an alternative plan, and at
    what cost?
        Answer. The Department has requested the Special Trustee to lay out
    alternatives to his plan and prepare detailed implementation plans. A
    response has recently been received and is under review.
                       indian gaming proposed rulemaking
        Last year, the Department issued an advance notice of proposed rule
    making in response to the Seminole decision. As you know, this proposed
    rule making to establish procedures for Departmental authorization of
    Class III gaming raised strong objections by State governments and
    members in Congress.
        Question. Can you tell the Subcommittee the status of the
    Department's review of the advance notice of proposed rule making? The
    closing date for comments was July 1, 1996.
        Answer. Based in part on the comments received, the Solicitor has
    been carefully reviewing the question of whether the Department has the
    authority to issue regulations governing such gaming procedures. If the
    Solicitor concludes that the Department does have such authority, the
    Department will publish in the Federal Register a Notice of Proposed
    Rulemaking regarding Class III gaming procedures. We anticipate that
    the Solicitor will complete his review in the very near future.
        Question. Has the Solicitor made a final recommendation on the
    proposed rule making? If yes, what was the decision? If no, when do you
    expect the Solicitor to render a decision?
        Answer. No, as stated in preceding answer we anticipate that the
    Solicitor will complete his review in the very near future..
        I have learned that the Department plans to run the Solicitor's
    recommendation through the Justice Department before making a final
    decision.
        Question. Has this occurred? If not, can you give us an estimate on
    when you expect this report to be transmitted to Justice? If so, how
    long do you expect the Justice Department's review to take?
        Answer. No, although it is correct that the Department will consult
    with the Department of Justice prior to finalizing our review.
        Question. If the Solicitor and Justice determine you have the
    authority to permit Class III gaming to Tribes under the Indian Gaming
    Regulatory Act or some other Vehicle, do you expect to exercise this
    authority? Do you plan to consult Congress prior to doing so?
        Answer. If the Department decides to promulgate regulations
    governing procedures, it would do so in accordance with the
    requirements of the Administrative Procedure Act; all interested
    parties, including Congress, will have the opportunity to comment.
        Question. Has the Department or one of its subdivisions done any
    drafting of rules or procedures in the event the decision is in favor
    of Secretarial authority to permit Class III gaming? If so, the
    Subcommittee would like to receive a copy of any draft rules or
    procedures developed to date.
        Answer. Staff in BIA have drafted proposed rules which might be
    suitable in the event the Solicitor's Office determines that we do have
    the authority to promulgate such rules.
                              native land in trust
        A number of Indian Tribes are devoting significant portions of
    their budgets, including funds allocated to them by the Federal
    Government, to acquire additional land, and that is their right under
    the current law. Yet, the use of scarce resources for land acquisition
    necessarily limits the amount of funds that the Federal and tribal
    governments can jointly devote to programs that address the fundamental
    needs of Native American people (e.g., health care, education, and law
    enforcement). It also limits the amount of funds that can be spent to
    properly care for the lands already within their ownership.
        Question. Should we consider changes in policy or funding
    allocations in order to focus limited financial resources on the
    fundamental needs of Native American people?
        Answer. The Department does not believe policy changes are
    necessary because Tribes are not using BIA funds for land acquisition.
    As a matter of fact, BIA has not requested any appropriations for
    general acquisition of lands for Indian Tribes in the past 18 years.
        Furthermore, Indian Tribes are not devoting significant portions of
    their budgets to acquire additional land. As a matter of fact, for the
    period 1992 through 1995, the Secretary accepted title to only about
    215 thousand acres in trust for Indian Tribes.
        Question. Do you believe Tribes have a mutual obligation with the
    Federal Government to address the needs of their members?
        Answer. The Department agrees that Tribes have a mutual obligation
    to meet the needs of their members. The Department believes that the
    Tribes are doing this as evidenced by the high priority Tribes place on
    Tribal Priority Allocation programs.
        Tribal governments are actively involved in addressing the needs of
    their members. One of the most effective mechanisms available to tribal
    governments, in its effort to meet the fundamental needs of its
    members, is the acquisition of lands that are more suitable for
    economic development. Lands more suitable for development enables the
    tribal governments to establish economic enterprises that will generate
    the capital needed to more adequately address the fundamental needs of
    the tribal membership.
        The primary purpose of taking land into trust is most often to
    reacquire land lost under the General Allotment Act (between 1887 and
    1934, over 90 million acres passed out of Indian ownership under the
    allotment policies of the General Allotment Act); to provide tribal
    sovereignty; to provide land for Indian housing; and to allow Tribes a
    means of economic development.
        A Tribe's acquisition of land, and the Government's taking of land
    in trust are two different things. A Tribe can acquire land to reclaim
    its aboriginal homeland, or it can acquire land for speculation or
    economic development.
        Question. In deciding whether or not to take land in trust, does
    the Department consider the competitive advantages that accrue to
    tribal enterprises (i.e., with respect to tax and regulatory status)?
        Answer. Yes. When an acquisition is for economic development, the
    Secretary is required by regulation to take all State and local
    concerns into consideration as well as the following additional
    criteria: the existence of statutory authority for the acquisition; the
    need of the individual Indian or the Tribe for additional land; the
    purposes for which the land will be used; the anticipated economic
    benefits to the Tribe; the impact on the State and its political
    subdivisions resulting from the removal of the land from the tax rolls;
    and jurisdictional problems and potential conflicts of land use.
        Each acquisition application is evaluated on its own merits. The
    Secretary additionally considers: whether the State or local entities
    oppose removal from the tax rolls; whether there is factual conclusive
    documentation to support the opposition; whether the Tribe has made
    good faith attempts to mitigate any anticipated adverse impacts;
    whether the Tribe offered to offset the loss of the tax base by some
    other income source or benefit to the State or local government; and
    whether the offer was accepted, along with other factors.
        Question. In the past five years, how much land has been taken into
    trust for Indian Tribes that is not contiguous or located within that
    Tribe's reservation boundaries?
        Answer. The BIA does not maintain a breakdown of acres acquired and
    located on or off (not contiguous) to a Tribe's reservation boundaries.
    The BIA has made a special data collection effort for the time period
    1992 through 1996. At this time, data are available for the period 1992
    through 1995. For the period 1992 through 1995, the Secretary accepted
    title to approximately 215,000 acres in trust nationwide for Indian
    Tribes. The BIA is currently compiling the annual real property
    caseload and acreage report for 1996. This report will be completed by
    September 1997 and will be made available to the Committees at that
    time.
        Between 1887 and 1934, over 90 million acres passed out of Indian
    ownership under the allotment policies of the General Allotment Act.
        Last April, the Department changed its regulations to provide 30
    days notice to State and local governments for written comments on an
    application by a Tribe to have land taken in trust.
        Question. Since this regulation was implemented has the Department
    received more or less comments from State and local governments over
    the placement of lands in trust?
        Answer. The regulatory change in April, 1996 was not for the
    purpose of providing 30 days notice to State and local governments for
    written comments on a Tribal land acquisition application. The 30 day
    notice regulation has been in place since 1980.
        The regulation promulgated in April, 1996 provides additional
    procedures to ensure the opportunity for judicial review of decisions
    on trust acquisition. Since April, 1996, all interested parties have
    the right to file action in Federal court to prevent a trust
    acquisition if they disagree with the final administrative decision to
    take land into trust, giving all interested parties the opportunity to
    file lawsuits to overrule land acquisition decisions through the
    Federal courts.
        Since implementation of the new rule in April 1996, there has been
    an increase in the number of administrative appeals filed on decisions
    to approve applications to take land into trust status.
        According to the Code of Federal Regulations (25 CFR 151.11), the
    Secretary is required to consider, ``the impact on the State and its
    political subdivisions resulting from the removal of land from the tax
    rolls (and) jurisdictional problems and the potential conflicts of land
    use which may arise.''
        Question. How much consideration is given to this? What is given
    greater priority a Tribe's desire to have land place in trust or the
    concerns of the State or local government in which the land is located?
        Answer. The Department gives a great deal of consideration to this
    factor. Some of the items that the Secretary considers when weighing
    this factor are:
        1. Does the tax bill include any special district assessments, and
    if so, does the special district actually provide services/benefits to
    the property/landowner; or does the Tribe have an infrastructure plan
    to provide similar services to benefit the property?
        2. Will the Tribe be able to offset the loss of the tax base by
    some other income source or benefit the State or local government?
        3. Have the State or local entities submitted justifications for
    opposition to removal from the tax rolls?
        4. Will removing this property from the tax rolls impose severe
    economic distress on the non-Indian jurisdictions?
        5. Has the applicant made good faith attempts to mitigate any
    anticipated adverse impacts, and does the record demonstrate so?
        6. What are the anticipated economic benefits to the Tribe?
        7. What are the anticipated economic benefits to the local
    community?
        8. Does the use comply with local jurisdiction zoning laws? If not,
    is it compatible?
        The Federal Government enjoys a special relationship with Indian
    Tribes that is rooted in the U.S. Constitution. This relationship gives
    rise to certain rights and privileges that no other group of citizens
    is afforded such as self-determination and self-governance. The Federal
    Government is committed to promoting tribal self-determination, self-
    sufficiency, and economic development. However, the Department does
    consider the interests of the State and local governments as well as
    local citizens in decision making about trust acquisitions.
        Question. In what circumstances will the Department place lands in
    trust for a Tribe despite concerns and/or objections by a State or
    local government or local citizens?
        Answer. Each trust acquisition application is unique and must be
    evaluated on its own merits. Decisions are based on an evaluation of
    the information submitted to support and justify the respective
    concerns by the applicant Tribe, State and local governments, and/or
    local citizens. It is not possible to state precise circumstances which
    would result in the Department placing lands in trust for a Tribe
    despite concerns by a state or local government or local citizens. It
    is fair to say that over the past three years, no lands have been taken
    into trust when there was strong opposition from state and/or local
    governments or citizens.
        Question. Approximately how often does this occur?
        Answer. Our experience shows that most local communities express
    little or no objection to tribal efforts to acquire lands located
    within the exterior boundaries of the Tribe's reservation for the
    improvement of the health and welfare of tribal members. The BIA field
    staff indicate that about 75 percent of all trust acquisitions are
    routine and non-controversial, as most local governments recognize the
    positive effects that will result from Indian trust acquisitions.
        The cases that appear to generate the most contentious positions
    and strong opposition are acquisitions proposed for gaming or similar
    large economic development projects.
        We would like to note for the record that a number of Tribes and
    States have negotiated, or are in the process of negotiating, state-
    trial tax compacts that accommodate the needs and rights of each party.
    The Department facilitates this type of negotiation as it is the most
    favorable way to resolve the issues. In the negotiation process, both
    sides can discuss revenue needs, economic development objectives, and
    economic concerns.
        Where there is some controversy, many States and municipalities
    have been successful in negotiating agreements with Tribes such as the
    following examples reported by the National Conference of State
    Legislatures:
      --The Cherokee Nation has signed agreements with the State of
            Oklahoma to make in lieu of tax payments to the state equal to
            25 percent of all applicable excise tax on cigarettes.
      --The Fort Peck Tribes concluded a cigarette tax agreement with the
            State of Montana.
      --The State of Louisiana and the Chitimacha Tribe entered into a tax
            compact.
      --Nevada and the Reno Sparks Tribe have an agreement on Tribal excise
            tax on tobacco products and a sales tax on retail sales on the
            reservation.
      --The Warm Springs Confederated Tribes and the Oregon Department of
            Revenue hold an agreement to share revenues generated by tribal
            collection of state tax on cigarettes.
      --Four Tribes have entered into tax agreements with the State of
            South Dakota on cigarette and tobacco tax.
      --New Mexico and the Pueblos of Santa Clara and Pojoaque have been
            working on the development of a unified tax collection system
            that will allow shared revenues.
        However, there have been a limited number of cases where some
    communities do not understand the unique status of Tribes and our
    government-to-government relationship. Local governments are concerned
    that continued expansion of tribal land bases will deprive the local
    governments of a significant tax base in the future and object to any
    proposed acquisition by a Tribe. The Federal Government's trust
    responsibility to Indian Tribes is to promote economic development,
    self-sufficiency, and self-determination pursuant to the 1975 Indian
    Self-Determination and Education Assistance Act, as amended. As
    previously stated, the United States has a special relationship with
    Indian Tribes that is rooted in the U.S. Constitution.
        I understand that new procedures implemented last year would
    require the Department to specify in its decision letter the proposed
    use of the property that is taken in trust if this information is
    known.
        Question. Does the Department include this information in its 30
    day notice to the States and local communities? If not, why?
        Answer. Yes. The Department's decision document requires an in-
    depth analysis and evaluation of the Tribe's application for trust
    status. The decision document includes a summary of findings of fact
    supporting all statements and references that support the decision to
    approve or disapprove an application. One of the primary factors
    considered is the purpose for which the land will be used. The decision
    document is furnished to all interested parties to the decision.
        When land is taken in trust, it is removed from local tax rolls,
    depriving communities of badly needed revenues even though they will
    continue to be responsible for providing certain services to Native
    American communities.
        Question. Do you believe that Tribes should be responsible for
    maintaining lands on the tax rolls, even if they are placed in trust?
        Answer. No, the acceptance of title to land in trust status changes
    the character of title to the United States for the benefit of Indian
    Tribes. Requiring Tribes to continue to pay taxes on land held in trust
    status by the United States would be contradictory to the Federal
    Government's recognition of Indian Tribes as domestic dependent nations
    under the protection of the Federal Government. Federal lands generally
    are not subject to taxation. If this approach is taken, logic would
    imply that all lands where title is held by the United States should
    remain on the tax rolls. This would mean that all public (national
    forests, parks, wilderness areas, etc.) and reserved lands (military
    bases) should remain on the local tax rolls.
        Question. Or, alternatively, should Tribes be required to make in-
    lieu-of-tax payments?
        Answer. No. Tribes in the exercise of their governmental authority
    are entering into agreements with the local governments for some type
    of compensation for in-lieu-of-taxes. These agreements are beneficial
    to both the local government and the Tribes. Requiring Tribes to make
    in-lieu-of-taxes would impinge upon tribal sovereignty.
        Question. Or, should the Federal Government be obligated to make
    local governments whole?
        Answer. Discussion with BIA staff indicate that about 75 percent of
    all trust acquisitions are routine and non-controversial. Among the
    cases where there is controversy, many States and Tribes are resolving
    their problems through negotiation of tax agreements. In addition,
    while the Payment in Lieu of Taxes program (PILT) compensates local
    governments for losses to their real property tax base for Federal
    lands within their boundaries, most of the PILT land holdings have been
    set aside for preservation and other purposes which place inherent
    limitations on economic development. Conversely, Indian trust
    acquisition usually results in increased economic benefits to the
    community as well as the reservation.
        Question. Do you know what affect the addition of that
    responsibility would have on the Federal Government's Payment in Lieu
    of Taxes program, which the Administration has proposed cutting by $13
    million for fiscal year 1998?
        Answer. The effects to individual units of local government from
    the addition of new trust lands to the PILT land base would not be
    significant. In 1996, the PILT entitlement land base was comprised of
    over 484 million acres.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd
                               budget priorities
        Mr. Secretary, many of the details of ``the budget deal'' will have
    to be hammered out through the appropriations process this summer. And
    while reports are that the overall domestic discretionary number will
    not be below the current level, and may actually increase, the specific
    602(b) allocations to the Subcommittees have not yet been made. So
    while I hope Chairman Stevens will look favorably upon the needs of the
    Interior Subcommittee, I also know that he will be under extraordinary
    pressure from all of the Subcommittee Chairmen--each of whom will be
    making the case as to why they should receive better treatment than the
    other Subcommittees.
        Regardless of the allocation this Subcommittee receives, it is
    unlikely that the budget as submitted will be approved without change
    by the Subcommittee. Thus, your task will be to work with us to address
    the most critical priorities. The President has proposed $527 million
    in increases above the comparable fiscal year 1997 levels for the
    programs in this bill. Of that amount, $389 million is for the agencies
    under your jurisdiction.
        Question. If additional resources are made available above the
    fiscal year 1997 level, but not to the full amounts requested for
    fiscal year 1998, what would you characterize as most critical of the
    increases that have been proposed in the budget?
        Answer. The Bipartisan Budget Agreement accepts the high priority
    that the President placed on his 1998 request for the Department.
    Discretionary spending in the Environment and Natural Resources
    Function (73 percent of the Department's budget) is specifically
    designated as a priority, as is spending for the Bureau of Indian
    Affairs' (BIA) Tribal Priority Allocations (10 percent of the budget).
    The Education Function, which includes the BIA education program (seven
    percent of the budget), is also designated a priority. The Department
    expects that these priorities will be reflected in the 602(b)
    allocation to the Subcommittee. However, the Department is prepared, as
    it has been in the past, to continue a dialogue with the Subcommittee
    concerning priorities once 602(b) allocations have been made.
        Question. How much of the proposed increase for your Department
    that is within this Subcommittee's jurisdiction is linked strictly to
    maintaining current levels of service and is not associated with new or
    enhanced programs?
        Answer. Almost all of the increases proposed for the Department
    cover increased costs of doing business or address backlogs of
    operational, maintenance or other needs. In the Fish and Wildlife
    Service (FWS) Resource Management account, for example, $9.9 million is
    sought to cover increased pay and other costs. Program increases of
    $9.7 million for the National Wildlife Refuge System address large
    backlogs of operational and maintenance needs identified in the new
    Refuge Management Information System. A program increase of $10 million
    for the Endangered Species program reflects a growing workload.
        Department-wide, fiscal year 1998 uncontrollable costs for Interior
    agencies under the Subcommittee's jurisdiction are estimated to total
    $114.0 million, including $21.5 million attributable to the 1.51
    percent increase in agency contributions to the Civil Service
    Retirement System agreed on in the Bipartisan Budget Agreement.
        Question. If the Subcommittee is held at a level that is roughly
    level with fiscal year 1997, what would you consider to be the highest
    priority issue that needs to be addressed of those proposed in the
    fiscal year 1998 budget request?
        Answer. The Bipartisan Budget Agreement accepts the priority that
    the President has placed on many of the Department's programs. The
    Department expects that the Subcommittee's 602(b) allocation will
    reflect the agreement on these priorities.
        Question. What will it mean to the Department of the Interior's
    presence in my State of West Virginia if the funding requested in
    fiscal year 1998 is not appropriated? Do you anticipate any changes in
    staffing, or office closures, or program terminations?
        Answer. Denial of the requested increases would not result in
    program terminations, but it would mean curtailment of services to the
    public. For example, Harpers Ferry National Historic Park would not
    receive $117,000 needed to maintain services and address increased
    requirements. Denial of increases requested for the National
    Conservation Training Center would prevent full operation of this
    important new facility in which the public has made a significant
    investment.
        It appears that one aspect of the budget deal may be a significant
    increase for land acquisition. Two of the largest pieces may be for the
    New World Mine, and for the Headwaters Forest. This still leaves nearly
    $400 million for additional land acquisition, if our understanding of
    the deal is accurate.
        Question. What capacity does the Department have to expand
    significantly its land acquisition program in fiscal year 1998 with
    current levels of staffing?
        Answer. The National Park Service (NPS) and FWS could not
    significantly expand their land acquisition programs in fiscal year
    1998 without proportionate increases in funding for acquisition
    management, appraisals, and transaction costs. Significant expansion of
    the land acquisition program will add workload associated with
    identifying, appraising, negotiating, closing cases, and surveying of
    tracts to be acquired. Some of this work can be accomplished through
    contracts with outside sources, such as appraisals and surveying. Other
    work can be accomplished through agreements with nongovernmental
    organizations that have historically assisted the Government with land
    acquisition. The nature of Federal land acquisition and the unique
    regulations and laws to which it is subject require a cadre of
    experienced realty professionals on staff to manage and review
    appraisals, to negotiate purchase agreements, to conduct title curative
    activities, and to control budgets and obligations of funds.
        The Bureau of Land Management (BLM), on the other hand, has some
    limited capacity to expand its land acquisition program in fiscal year
    1998 with current levels of staffing, particularly in those States
    which have received consistent Land and Water Conservation Fund
    appropriations over the past few years. Acquisition partners greatly
    enhance its ability to acquire property. These third party partners
    often concentrate on purchasing numerous small tracts, often
    inholdings, to convey to the BLM in one subsequent transaction.
    Opportunities for matching Federal funds with private sector moneys are
    among the BLM's highest acquisition priorities. By working with
    partners, BLM is able to make maximum use of its staff and has the
    ability to expand its acquisition program with its current staffing
    level.
        Question. What would be the operational requirements of adding new
    units to the Department's land base?
        Answer. The operational requirements resulting from additional land
    acquisitions vary among BLM, FWS, and NPS as follows:
        The BLM operational requirements would not significantly increase
    as a result of adding new units to the BLM land base. Most additions to
    the land base would be inholdings of private lands within areas BLM
    already manages. One of the objectives of the BLM land acquisition
    program is to increase public lands efficiency through the
    consolidation of public lands into manageable areas. In addition, BLM
    has focused on acquisitions that have minimal outyear costs associated
    with them. For those acquisitions that do require facilities or
    significant operations costs, BLM has used acquisition partners to
    leverage additional funding.
        The operational requirements of adding new FWS units will depend on
    the individual units under consideration. The FWS land acquisition
    program currently focuses on acquisition of lands at existing units of
    the National Wildlife Refuge System. The President's fiscal year 1998
    Budget does not request any funding for land acquisition that would
    establish new refuges. Moreover, of the 131 projects on the Land
    Acquisition Priority System list, only nine (or seven percent) are
    proposals for new units to the system. The FWS planning and budgeting
    for land acquisition emphasizes acquiring needed lands at existing
    units of the Refuge System.
        Each time a new unit is added to the National Park System, the
    operational responsibilities of NPS are necessarily increased. These
    costs are identified during the process which looks at the feasibility
    of establishing a new unit and the alternative methods of protecting
    the resource, should that resource be judged nationally significant.
    Each new unit brings with it varying degrees of new operational
    requirements. Before testifying in favor of new units, NPS carefully
    weighs this consideration, and for this reason, the Department of the
    Interior and the Congress have, in recent years, looked into new kinds
    of partnership arrangements such as heritage area designations, where
    the costs of operation and development are spread among several
    partners at the State, local and Federal level.
        Question. Aren't there already numerous units that are
    understaffed?
        Answer. While all NPS and FWS units may not have an optimum number
    of staff, the bureaus provide at least minimum services for the
    programs offered to the public at the various sites. To help mitigate
    this problem, both bureaus perform ``cluster management'' of units that
    are geographically close together.
        Question. Do you think the priority should be on adding new units
    before addressing adequately the needs at existing sites?
        Answer. The Department develops its position on potential new units
    depending on the merits of the resources in question. For instance, new
    units have been added to the National Park System at roughly the same
    pace for the last three decades; new units will undoubtedly continue to
    be added. It would be wrong to lose a nationally significant resource
    due to a policy forbidding new units. On the other hand, the documented
    NPS operational shortfall and infrastructure backlog has led both the
    Administration and the Congress to explore, when feasible, other
    alternatives to Federal ownership. In general, a mix of establishing
    new units when clearly appropriate, while providing additional
    financial resources for existing units, has proven a successful
    strategy.
        In the last two years, funding for the Interior bill is down about
    $1 billion, or approximately seven percent, from where it was in fiscal
    year 1995. The Interior Department has taken its fair share of these
    reductions.
        Question. How has the Department handled this reduction in its
    funding? How have personnel levels decreased, and what program changes
    have been implemented?
        Answer. Since January 1994, 10 of Interior's Bureaus and Offices
    have experienced reductions in staff of more than 10 percent. These
    reductions were made through aggressive use of buyouts, hiring freezes,
    and the separation of close to 2,000 employees through Reductions-in
    Force (RIF) in 1995 and 1996. The largest RIF occurred as a result of
    the legislated closure of the U.S. Bureau of Mines. Concurrent with
    these reductions the Department has undertaken a major streamlining and
    reinvention effort consistent with the President's Reinventing
    Government initiative. The Department has made significant progress in
    changing business practices and finding more cost-effective and
    efficient management strategies with a focus on partnerships and
    cooperative funding. Despite our best efforts at reinvention, however,
    the Department has suffered some program degradation. Indian Tribes
    have born much of the burden with a Congressionally imposed 11 percent
    reduction in fiscal year 1996 to Tribal Priority Allocations, the
    account which funds tribal governments, law enforcement, housing
    improvement, general assistance, and other reservation programs. While
    about a third of these funds were restored in fiscal year 1997, Tribes
    are still not able to maintain adequate services. For the land managing
    bureaus, the impact manifested itself in the curtailment of some
    services at parks and refuges and a growth in maintenance backlogs.
                  National Conservation Training Center (NCTC)
        The fiscal year 1998 budget proposes an increase of $4 million for
    operations of the training center.
        Question. How will the proposed funds be used? Are they necessary
    because fiscal year 1998 will be the center's first full year of
    operations?
        Answer. The President's fiscal year 1998 Budget requests an
    additional $4.1 million to operate the NCTC at the level for which it
    was designed during the first year of operation. The additional funds
    are needed to annualize the fixed costs related to the operation of an
    adult residential training campus, such as utilities, maintenance, and
    security; increase the number of course offerings to 250; begin to
    implement distance learning programs; and continue the technical
    assistance and development of partnerships in conservation education.
        Question. If the full amount of funding requested in the budget is
    not appropriated, what consequence will this have on the Fish and
    Wildlife Service's ability to make use of this new facility?
        Answer. Any reduction to the funding level requested would impact
    the FWS ability to operate the NCTC. Training and education course
    offerings would be reduced, course development would be curtailed,
    distance learning programs deferred, and facility operations would be
    reduced.
        The fiscal year 1997 budget included funding of $500,000 each in
    the budgets of the National Park Service and the Bureau of Land
    Management in support of NCTC operations since these bureaus will also
    be users of the facility. Through direct and reprogramming actions,
    these funds were approved.
        Question. Is it your understanding that BLM and NPS funds provided
    in fiscal year 1997 are continued in the fiscal year 1998 budget? Are
    these funds considered to be a permanent part of the base?
        Answer. The fiscal year 1997 budget included funding of $500,000
    each in the budgets of NPS, FWS, and BLM in support of NCTC operations
    since these bureaus will also be users of the facility. These funds are
    part of the permanent base for NCTC operations into the future.
                     canaan valley national wildlife refuge
        This refuge, the Nation's 500th, was established in 1994--nearly
    three years ago. Yet it has taken several years to establish a
    presence.
        Question. How many refuges are staffed below the custodial level--a
    refuge manager, maintenance worker, and a biologist?
        Answer. There are 509 ``units'' in the National Wildlife Refuge
    (NWR) system. Of this total, 274 units are staffed and 235 are not
    staffed. (The majority of the 235 unstaffed units are satellites of
    small acreage which do not warrant staffing. Also, FWS has
    ``clustered'' management activities at logical sites to oversee some of
    the far flung units of the refuge system, such as in North Dakota).
        According to a preliminary analysis, the system is staffed at the
    custodial level. For the job series in question, the following table
    displays refuge manning levels for the 274 staffed units:

                              REFUGE MANNING LEVELS
    ------------------------------------------------------------------------
                   Job series                  Staffed sites      Percent
    ------------------------------------------------------------------------
    Refuge managers/wildlife administrators.             257              94
    Biologists..............................             154              56
    Maintenance/equipment operators.........             228              83
                                             ----------------
          Total staffed units...............             274
    ------------------------------------------------------------------------

        Question. What funding level would be necessary to bring all
    refuges currently in the system to this minimal level?
        Answer. The President's Budget request includes funding to address
    the highest priority operational needs of the NWR system. The budget
    includes a three-tiered effort to address the highest priority
    operational and maintenance needs of the Nation's 509 NWRs. First,
    operational increases total $13.8 million, or eight percent (including
    $4.1 million for pay and FERS retirement cost increases). Second, the
    budget continues the recreation fee demonstration program which will
    initially generate approximately $1 million for on-the-ground project
    work at the refuges which collect the user fees. Third, construction
    funding totaling $22.2 million will be used for the highest priority
    infrastructure backlog needs including the rehabilitation of roads,
    dams and bridges; as well as $17.1 million in ongoing operations
    funding for routine maintenance. The $17.1 million plus the $22.2
    million in the construction account will address the highest priority
    needs identified in the Maintenance Management System.
        The first increment of the operations increase is $9.8 million to
    protect wildlife, improve habitat, enhance recreation and education,
    and to accelerate comprehensive planning. The new Refuge Management
    Information System (RMIS) database was used to systematically rank
    priorities against nationwide goals to ensure project integrity and to
    compile a project list tied to the $9.8 million increase.
        The additional funding requested for habitat enhancement will be
    used to restore natural water flows and replant trees and prairie
    grasses. This funding will reverse the damaging effects of previous
    land uses which often include drainage, tree clearing, and elimination
    of native grasses. Restoring habitats now will ensure healthy and
    diverse ecosystems; ensure sustainable populations of fisheries and
    wildlife; and provide habitat for threatened and endangered (T&E)
    species. Implementation of wildlife dependent recreation and education
    projects will provide additional opportunities to the 29 million annual
    refuge visitors. Funding will also allow additional comprehensive
    management plans to be completed and guide future management of the
    refuge system.
        The second increment of the operations increase is $4.1 million to
    fully fund required pay and FERS retirement system costs for the
    approximately 2,800 employees of the refuge system. This ends the
    chronic hidden problem of eroded base funding which has been absorbed
    in recent years. For an average refuge, this could mean an additional
    $20,000 that won't be siphoned away from operations.
                          research/science at interior
        Mr. Secretary, you have been a staunch advocate of the need for
    independent science within the Department so that land management
    decisions can be made with the most accurate information possible. Your
    efforts in this regard, however, have been scrutinized by many, often
    out of concern about possible impacts on current management practices
    and uses.
        Question. Now that the Biological Resources Division (BRD) has been
    established within the U.S. Geological Survey (USGS), what is your
    assessment of the consolidation of biological science independent from
    the land managers?
        Answer. The integration of BRD into USGS is progressing positively.
    The BRD's top priority is to address Interior bureaus' needs.
    Continuing efforts over the next few budget cycles will demonstrate the
    ability to match up differing scientific disciplines in efforts that
    result in better protection of the Nation's natural resources and in
    providing reliable scientific information and management options
    supporting land management needs.
        As you are probably aware, Mr. Secretary, there are some who still
    advocate disbanding the consolidated approach and allowing each land
    management agency to continue to have its own research element.
        Question. What would be the consequences if the Congress were to
    consider breaking apart the BRD and reassigning the functions to the
    various bureaus of the Department?
        Answer. In recent years, the need for broader and more timely
    biological information has been apparent in the numerous controversies
    and potential economic dislocations surrounding various issues, e.g.,
    endangered species. Consequences of breaking apart BRD would reduce the
    ability and effectiveness of the Department to address issues that are
    of common concern to the resource management bureaus, particularly
    issues that involve several geographic regions of the Nation. Each
    bureau would have to create costly duplicate science structures with
    overlapping services, activities, and functions to address the same
    need.
        For example, NPS, FWS, BLM, and other bureaus share a common
    concern about invasive species, noxious weeds, and exotic species. The
    BRD is in the best position to provide the scientific approach that can
    address those needs specific to each bureau and also simultaneously
    apply the broad perspective necessary to address the needs that extend
    across larger geographic areas. This broad perspective has been
    enhanced by the recent merger with the physical science divisions of
    USGS.
        An important aspect of ensuring the success of the consolidated
    research approach is to be ever vigilant to the needs identified by the
    land managers of NPS, FWS, and BLM.
        Question. How are you dealing with the concerns that continue to
    surface from within these agencies that they are not consulted
    adequately in determining how the BRD spends its money?
        Answer. It is the responsibility of USGS to meet the priority
    biological needs of the Department of the Interior. The BRD has worked
    hard at maintaining and fostering its working relations with the
    resource management bureaus. Improvements and changes in identifying
    Bureau Information Needs (BIN) are being pursued to ensure that the
    critical needs of the bureaus are communicated to BRD and that the
    science conducted by BRD is responsive to these needs. Other bureaus
    are fostering positions and plans that strengthen their link to BRD
    scientists. The FWS has established and filled a senior management
    position to coordinate identification of information needs within FWS.
    The BLM has formalized its strategic science planning process to
    systematically provide its science information needs directly into the
    BIN process in a timely manner. These actions have enhanced
    communication between BRD and other bureaus at all levels.
        One important aspect of the BIN process is reporting back to the
    bureaus on BRD responses to their information needs. The BLM recently
    received a report on the status of their information needs and on
    projects and activities underway in BRD to address them. The BRD
    Research Centers hold workshops and meetings with counterparts at the
    regional level to discuss progress in addressing the needs.
        Programs developed specifically for other Interior bureaus continue
    with substantive input from those agencies. For example, BRD has the
    primary responsibility for science issues for developing standards and
    protocols for Long-Term Prototype Monitoring in National Parks, but all
    reviews and decisions (including funding) are made cooperatively with
    NPS. The FWS is beginning to implement a systematic process to assess
    contaminant threats to refuge lands with their resources while BRD
    provides technical support and continues the development of guidance
    and data management tools for this effort. Other examples of BRD
    focused activities designed to meet specific information needs of the
    bureaus include: the Natural Resources Preservation Program which
    addresses needs of national parks; the quick response program which
    provides short-term information needs for FWS land managers; and
    offshore environmental studies which provide information for the
    Minerals Management Service use in offshore leasing and development
    decisions.
        The proposed increases for fiscal year 1998 reflect the priority
    needs of the bureaus identified through the formal BIN process,
    developed by a multi-bureau task force in fiscal year 1994 and
    initiated in fiscal year 1995. Based on the total resources available
    and the biological research capabilities of BRD scientists, the
    proposed fiscal year 1998 budget increases would address the highest
    priority biological information needs. The broad areas of research
    proposed for increases respond to bureau information needs (e.g.,
    restoration ecology, invasive weeds). Because many resource problems
    are not confined to a single park, refuge, or BLM tract, USGS maximizes
    efficiency by focusing efforts on broad resource problems that
    transcend boundaries, and applying findings at the local level. Using
    this strategy and the BIN process to identify highest priority issues
    of the bureaus, USGS serves the needs of its Interior constituency.
        The fiscal year 1998 budget proposes an increase of $7.5 million
    for the BRD. These funds are proposed to be used for biological
    research and to improve long-term monitoring of biological resources.
        Mr. Secretary, a major focus of this Subcommittee has been to
    respond to the aspects of this appropriations bill which touch most
    directly the American people. Thus, the emphasis has tended to be on
    the resources necessary to provide for the visiting public--whether it
    be through the NPS, the Smithsonian, the Forest Service recreation
    program, or any of the other public aspects of the bill.
        Question. Given the demands to continue funding these public use
    programs, what do you see as the correlation between dollars spent on
    science and the experience the average American has when visiting a
    national park or national wildlife refuge?
        Answer. The mission of the Department to provide for the
    conservation and recreational use of the Nation's parks and wildlife
    refuges is enhanced when natural resource management decisions are
    based on objective scientific information. To this end, BRD conducts a
    full range of inventory, monitoring, and research from local needs
    affecting a single unit to large-scale issues affecting many resources.
    Results from these studies provide natural resource managers with the
    appropriate tools and information they need to deal with issues and
    problems associated with visitor use of the Nation's public lands.
    Thus, the experience of the average American visiting a national park
    or wildlife refuge is enhanced because potential conflicts over natural
    resource use are minimized and the continued health and sustainability
    of these areas is ensured for present and future generations. Examples
    of efforts by BRD include restoring the blackfooted ferret on the
    Charles M. Russell National Wildlife Refuge, evaluating the effects of
    mercury contamination in fish and wildlife on national parks and
    refuges in Maine and Florida, determining the distribution and the
    causes for decline of amphibians in North Cascades and Olympic National
    Parks, and modeling responses of the complex ecological processes of
    the Florida Everglades National Park to natural and human-induced
    changes to assist in the restoration of this park.
                               natural disasters
        The emergency supplemental approved by the Senate Appropriations
    Committee recommends a total of some $327 million in funding for your
    bureaus. A small portion of this is offset, but most is declared as
    emergency spending. While the single largest component is the funding
    to begin restoring Yosemite National Park, vast portions of the
    Department were affected by this winter's storms.
        Question. Based on the most recent estimates from the field, will
    the funds recommended in the supplemental address the most critical
    recovery needs?
        Answer. The funds recommended in the supplemental will address the
    most critical recovery needs of BLM, USGS, FWS, NPS, BIA, and the
    Bureau of Reclamation (BOR). In addition to the funding that it
    requested, BLM and NPS are also utilizing funding from the Federal
    Highway Administration, and therefore our ability to repair damage is
    also dependent on Federal Highway Administration's success in obtaining
    their requested funding.
        Question. Are there any major elements that you feel the Committee
    has not addressed?
        Answer. While we believe that all major elements were addressed by
    the Committees, USGS believes that additional elements warrant
    consideration. Non-emergency funds could be used by USGS to properly
    document the flood for purposes of improving risk estimates and
    improving forecasting capabilities for future floods. Large floods such
    as those that took place this year in the far western States, in the
    Ohio River Valley, and in the northern Great Plains provide information
    that is critical to the accurate assessment of risk, which is needed
    for design of future flood control works, for proper flood plain zoning
    and flood insurance rate mapping, and for improved calibration of the
    National Weather Service flood forecasting models. The physical
    evidence (e.g., high water marks) needed to make these improvements is
    highly perishable. If the field measurements are not made quickly, the
    evidence is destroyed by natural processes. If the USGS does not do
    these field investigations, the communities which have been devastated
    by recent floods will be no better prepared the next time significant
    flooding occurs.
        Question. What would be the impact on the Department of the
    Interior if there are delays in the supplemental being enacted?
        Answer. The 1997 Emergency Supplemental Appropriations and
    Rescissions Act (Public Law 105-18) has been enacted.
        Question. How will the Department address additional recovery
    requirements that might not become known until after action on the
    supplemental is completed?
        Answer. Our response cannot be determined in advance. If
    significant additional recovery requirements are made known to the
    Department, we will decide whether to request another supplemental,
    manage the requirements through the regular appropriations process,
    require the bureaus to absorb the cost of these additional actions
    within current funding levels, or forego the recovery actions.
        Question. Would you anticipate requesting further funds, or will
    the affected agencies have to address these requirements out of their
    base program?
        Answer. At this time, it does not appear that significant
    additional recovery requirements exist.
        Question. And if they have to absorb it out of the base, what
    effect does that have on other responsibilities?
        Answer. Should unknown significant recovery costs become known at
    this late period, the bureaus would have trouble absorbing new cost
    requirements in the last quarter of the fiscal year. Field offices in
    some bureaus would have to severely curtail significant mission-related
    field activities. However, we will keep the Committee informed of
    significant additional needs.
         full year continuing resolution provision in the supplemental
        Despite my efforts to have it stricken from the bill, the
    Supplemental contains a provision that serves as a full year continuing
    resolution for fiscal year 1998, but at the fiscal year 1997 funding
    level.
        Question. What would be the impact on the Interior Department if
    funding were frozen at the fiscal year 1997 level? What would be the
    consequence on the Department's programs if the proposed funding to pay
    for fixed costs is not forthcoming?
        Answer. The Department would have to absorb nearly $100 million in
    uncontrollable costs and forego increases critical to providing
    adequate funding for parks, refuges, public lands, Indian Tribes, and
    high priority ecosystems restorations. The most significant impact
    would be felt in infrastructure maintenance and repair, where
    historically inadequate funding has resulted in backlogs well in excess
    of $10 billion for the Department; and in the Bureau of Indian Affairs
    (BIA), where funding would be too low to address increasing school
    enrollment and deficiencies in funding for local reservation programs.
                      monuments in the washington, dc area
    FDR Memorial
        Recently, the President dedicated the newest addition to the
    National Park Service's responsibilities in the monumental core with
    the official opening of the FDR Memorial.
        There has been considerable attention lately to the monument's
    components and the manner in which President Roosevelt's fight with
    polio is addressed.
        Question. What role would the Interior Department play in any
    decisions to modify the memorial? How would any modifications to the
    Monument be financed?
        Answer. Senate Joint Resolution 29 provides that the Secretary
    conduct a study and develop recommendations for an appropriate addition
    to the memorial depicting FDR's disability and to report to Congress
    upon completion of that study. It also provides that any addition be
    privately financed. The Department plans to use appropriated funds for
    salaries and administrative expenses associated with the study and
    private funds for design and construction.
        Question. What method will be used to select the designer for any
    addition to the memorial? Do you anticipate an open competition?
        Answer. This has not been determined. While it may be appropriate
    to utilize one or more of the original sculptors who participated in
    the memorial, a fresh start with an open selection process may be the
    better approach.
        Question. What timeline has the Department developed for planning,
    design, and construction of the addition to the FDR Memorial?
        Answer. If the experience with the Vietnam Memorial is
    representative, the Department believes that this process may take
    several years.
    Korean War Veterans Memorial
        Recently, attention has been focused on the need for considerable
    repairs at the Korean War Veterans Memorial, even though this memorial
    is just a few years old.
        Question. Can you describe for the Committee the actions the
    Department and NPS are taking to address these repair needs?
        Answer. The work which has to be completed is related to the
    construction and design of the memorial. The NPS is meeting with the
    group which was authorized to construct the memorial, the American
    Battle Monuments Commission, to ascertain how the commission will fund
    work to complete the memorial.
        Question. What will happen if agreement cannot be reached with the
    contractor or other parties regarding funding for the repair?
        Answer. The American Battle Monuments Commission will have to seek
    a special appropriation, or as alternatives, it could reestablish the
    fund-raising campaign, or each branch of the armed services could
    contribute funds to the construction work.
        Question. What is the estimated cost to conduct the necessary
    repairs?
        Answer. The U.S. Army Corps of Engineers, the original construction
    manager for the Korean War Veterans Memorial project, has reported to
    the American Battle Monuments Commission the amount of $783,000 for the
    construction repair work.
        Question. What steps is NPS taking to ensure that responsibility
    for repairs is specified before monuments or memorials are turned over
    to the Service?
        Answer. The NPS is not always the contracting officer for the
    design or construction of a memorial. In these cases, the Park Service
    has no authority to effect changes in design, material, construction
    contract terms, or operational requirements. However, NPS has used
    Memoranda of Conveyance with the authorized group to address any
    continuing relationships and responsibilities between the Park Service
    and the group following completion of the memorial. The NPS has no
    authority to require the authorized group to retain funds to address
    latent design or construction issues.
        The Park Service does request that construction contracts contain
    extended warranty periods for major or unique components of the
    memorial. The NPS also requests all authorized memorial groups to work
    with the architect, sculpture, and design contractors to develop a
    manual of information which comprehensively details the memorial and
    its features, its operation needs, materials, and finishes. This manual
    of information is used as a management tool. Examples of these are
    manuals for the Vietnam Veterans Memorial and the National Law
    Enforcement Officers Memorial. The information is formatted to indicate
    guarantee periods, contractors, sculptures narrative, and design
    maintenance.
        Many groups, pleased to be at the end of the construction cycle,
    budget their remaining funds for dedication ceremonies and other public
    announcements of their achievement. They frequently do not retain the
    necessary funds to address latent design and construction issues nor to
    complete detailed operation and maintenance manuals to guide the NPS
    efforts.
        Future Congressional authorizations to construct memorials on park
    land could include requirements for the authorized group to establish
    contingency or retention funds to address unforeseen design or
    construction issues, similar to the process used in construction
    projects undertaken with appropriated funds. This requirement could be
    in addition to an endowment for future maintenance and operating needs.
                         office of surface mining (osm)
        A proposal has been developed for a cooperative research effort
    with the National Mine Land Reclamation Center to reduce formation of
    acid pollutants that can drain into streams and rivers where coal is
    mined. The objective is to pursue advances in technology to be used in
    the identification, evaluation, and development of methods that will be
    cost-effective and environmentally beneficial. The National Mine Land
    Reclamation Center can serve as a technical clearing house to identify
    and develop ``best science'' approaches to acid mine drainage related
    issues.
        Question. Do you agree that there is benefit in seeking to address
    acid mine drainage issues in a non-confrontational manner, apart from
    the regulatory environment?
        Answer. Yes. We believe that in order to make true progress in
    finding solutions for acid mine drainage problems, it is necessary to
    involve all parties--industry, States, academia, citizens, government
    agencies. This can be done best in a non-regulatory environment.
        Question. Has OSM participated with the National Mine Land
    Reclamation Center in devising this program to address the need to be
    able to predict acid mine drainage occurrence and develop successful
    prevention efforts?
        Answer. The OSM is participating extensively with the National Mine
    Land Reclamation Center (NMLRC). At OSM's request, with the agreement
    of the industry, the NMLRC serves as the Secretariat for the Acid
    Drainage Technology Initiative (ADTI). This initiative is a
    partnership-based joint venture, in which OSM has joined with industry,
    the States, academia, other governmental agencies, and other groups to
    identify science-based solutions to acid mine drainage problems. In
    addition, OSM, in conjunction with the Environmental Protection Agency
    (EPA), is providing funds to the NMLRC to: (1) organize a public
    meeting at the appropriate time to discuss the results of the ADTI
    prediction and prevention task groups efforts; and (2) assist in the
    technical review and development of acid mine drainage stream
    restoration projects.
        Question. Are other Federal agencies involved in acid mine drainage
    work? What activity have they had in working with OSM on this issue?
    How do you ensure that there is no duplication of effort?
        Answer. Many other Federal agencies are joining in the partnership
    effort to address acid mine drainage problems. The EPA is a major
    partner both in the Appalachian Clean Streams Initiative and in the
    Acid Drainage Technology Initiative. Other Federal agencies that are
    actively partnering with us and the States include: Natural Resources
    Conservation Service (NRCS), U.S. Army Corps of Engineers (COE),
    Tennessee Valley Authority, USGS, Forest Service, Department of Energy,
    BLM, and FWS. Some of these agencies (e.g., EPA, NRCS, COE) are
    participating in the Appalachian Clean Streams projects that are being
    funded this fiscal year. Some (e.g., Department of Energy, USGS, EPA)
    participate on the Acid Drainage Technology Initiative work groups.
    Duplication of effort is avoided by the extensive coordination that
    takes place between the agencies involved in acid mine drainage issues.
    For example, the Eastern Mine Drainage Federal Consortium, comprised of
    14 Federal agencies, meets regularly to discuss and coordinate issues
    relating to mine drainage. The work groups involved in the Acid
    Drainage Technology Initiative provide a coordinating mechanism for
    technical analysis. For the Appalachian Clean Streams Initiative, we
    conduct a conference call every two weeks to discuss progress and
    issues. Several Federal agencies (EPA, COE, NRCS) always participate in
    the conference calls.
        Question. What need is there to move from small-scale research to
    large-scale demonstrations of acid mine drainage abatement under
    operational conditions?
        Answer. There is a definite need to move in the direction of
    providing large-scale demonstrations of acid mine drainage abatement
    techniques under operational conditions. Our hope is that through a
    combination of Clean Streams projects funded through the Abandoned Mine
    Reclamation Fund grant appropriation and non-OSM contributions, and
    industry participation through the Acid Drainage Technology Initiative
    we will be able to field test techniques under actual operational
    conditions. That is one reason why we believe that continued funding
    for the Appalachian Clean Streams Initiative grants and OSM's technical
    assistance activities are important.
                      maintenance/infrastructure backlogs
        The maintenance backlog for the Interior Department is estimated to
    exceed $10 billion. The largest segments of this backlog are for NPS
    responsibilities and BIA. To assist in efforts to address demands
    placed on the public land agencies, Congress established a recreation
    fee demonstration program that allows agencies to retain funds
    collected on-site to address high priority requirements.
        Question. What has been the reaction of the public thus far to this
    program? Has there been any resistance to paying fees at sites
    participating in the program?
        Answer. The national and local press have been almost unilaterally
    supportive of the Recreational Fee Demonstration Program. Public
    response has thus far been positive. The NPS has, to date, received few
    letters regarding the program. The Park Service will continue to
    monitor the reaction to these new fees and to provide information that
    illustrates that they directly enhance the visiting public's
    experience.
        The NPS has already begun its evaluation of the Recreational Fee
    Demonstration Program by contracting with researchers from the
    University of Minnesota. A dozen case studies will be conducted to
    sample public opinion on the new fees.
        The first evaluation project has already been concluded at Colonial
    National Historical Park. This park raised the entrance fee for its
    Jamestown unit from $2 to $5 per person and instituted a new fee at the
    Yorktown unit at $4 per person. An admission fee for both units is $7
    per person and an annual family pass can be purchased for $20.
    Preliminary findings culled from the focus group meetings held there
    from May 30 through June 2, 1997 show:
      --Over three-fourths of those paying fees thought the fees were about
            right, or too low;
      --Slightly less than one-fourth of the fee payers thought the fees
            were too high;
      --Half of those gaining entrance using a Golden Age passport thought
            the free entry provided by this pass to senior citizens was
            right; and
      --Slightly less than half of the Golden Age pass users thought that
            seniors should be charged at least something for entrance.
        Question. What is your current estimate of revenue that can be
    generated by this effort?
        Answer. Although the President's Budget had estimated that revenues
    generated by this effort in fiscal year 1998 would total $48 million,
    that estimate is now being revised as a result of amendments to the
    program earlier this year.
        Question. Can you provide examples of how the funds will be used?
        Answer. Several projects that are under consideration for the use
    of the funds include the rehabilitation of the Beaver Meadows Visitor
    Center, replacement of vault toilets, rehabilitation of trails and
    relocation of trailheads, and historic structure preservation at Rocky
    Mountain National Park. Others include improved public restrooms;
    improvement or provision of handicap access; utility system repairs at
    Yellowstone National Park; new toilets and dump stations; stabilizing
    the Widows Ledge ruin site; rehabilitating Wahweap picnic area; and
    stabilizing and rehabilitating five historic structures in the Lonely
    Dell at Glen Canyon National Recreation Area.
                                      fire
        Question. Please describe Departmental policy and any other
    Federal-level policy on the use and amount of ``prescribed burns'' and
    mechanical thinning on Federal lands to better manage accumulated fuel
    load.
        Answer. The Federal Wildland Fire Management Policy and Program
    Review Final Report dated December 18, 1995, establishes joint fire
    management policy for both the Department of the Interior and the
    Department of Agriculture. The role of wildland fire as an essential
    ecological process and natural change agent is prominently featured as
    one of the overall guiding principles for Federal fire management.
    Goals of the policy include the use of wildland fire to restore and
    maintain healthy ecosystems and to minimize undesirable fire effects,
    and to manage wildland fuels at levels consistent with wildland fire
    protection and resource management objectives identified in management
    plans. Federal agencies are directed by the policy to implement
    expanded use of prescribed fire to manage fire-dependent ecosystems,
    and reduce hazardous fuel loading. Actions specific to the Federal
    agencies' use of prescribed fire are as follows. Federal agencies will:
      --Jointly develop programs to plan, fund, and implement an expanded
            program of prescribed fire in fire-dependent ecosystems;
      --Facilitate the planning and implementation of landscape-scale
            prescribed burns across agency boundaries. Seek opportunities
            to enter into partnerships with tribal, State, and private land
            managers to achieve this objective;
      --Require appropriate treatment of fuel hazards created by resource-
            management and land-use activities;
      --Conduct all prescribed fire projects consistent with land and
            resource management plans, public health considerations, and
            approved prescribed burn plans;
      --Implement the National Wildfire Coordinating Group (NWCG)
            interagency prescribed fire qualifications and certification
            standards;
      --Train and maintain a qualified and adequate work force to plan and
            implement interagency prescribed fire projects safely and
            effectively, and make these personnel available when needed;
      --Jointly develop simple, consistent hiring and contracting
            procedures for prescribed fire activities;
      --Conduct research and development on fuel treatment alternatives and
            techniques;
      --Seek authority to eliminate barriers to the transfer and use of
            funds for prescribed fire on non-Federal land and among Federal
            agencies;
      --Seek authority or provide administrative direction to eliminate
            barriers to carrying over from one year to the next funds
            designated for prescribed fire; and
      --Jointly develop tools to identify, assess, and mitigate risks from
            prescribed fires.
        In addition, the 1998 Wildland Fire Management Appropriation
    Request includes language that would allow for funding to be available
    from the Wildland Fire Operations account to support an expanded
    prescribed burning and mechanical fuels treatment program. This would
    provide funding needed to accomplish the tasks identified in the ``New
    Federal Fire Policy.'' Without this funding the opportunities to meet
    the identified action items will be extremely limited.
        The amount of acreage to be treated over the next few years is
    planned to be two to three times greater than treatment levels in the
    recent past. The actual treatment amount will depend on fire management
    plan updates, available funding, environmental conditions in any given
    year, and available resources such as personnel and equipment.
        Question. With current/renewed interest in scientific management of
    public lands, do you see more such activities in the near future?
        Answer. The land management plans of Interior bureaus now
    incorporate concerns about the role of fire in restoring and
    maintaining healthy ecosystems. The bureaus are developing plans to
    utilize appropriate management tools, including mechanical thinning of
    forests and the use of fire, to reduce fuels to a more natural
    condition. As part of this program, the bureaus have projected an
    increase in acres treated from about 400,000 acres in 1997 to nearly
    900,000 acres in 2001. This represents an approximate 25 percent annual
    increase for the next four years.
        Question. Are all of the land managing agencies under your purview
    undertaking such activities?
        Answer. Yes, all of the Interior bureaus are expanding fuels
    management programs on their lands and are developing integrated
    programs to manage hazardous fuels and prescribed burns across Federal
    administrative boundaries. This will increase the efficiency of
    treatments and will complement more comprehensive efforts to manage
    lands on an ``ecosystem'' basis rather than as isolated units.
        Question. In what manner are such contemplated actions coordinated
    with interested parties including adjacent landowners and local
    residents?
        Answer. Hazardous fuel treatment plans and prescribed burn projects
    are covered under environmental assessments that are submitted for
    public review and comment. In addition, many administrative units
    conduct town meetings and other public outreach programs to explain the
    purpose, timing, and possible impacts of these programs on local
    communities. The ongoing Mineral King Risk Reduction Project at Sequoia
    National Park is a good example of such an effort. That project
    involves extensive prescribed burning and mechanical fuels reduction
    both to restore fire to giant sequoia groves and to protect the
    property of private inholders in the National Park. All bureaus are
    expanding efforts to develop cooperative fuels management programs with
    adjacent State, tribal, and private landowners.
                      firefighting program infrastructure
        In the past several months there have been reports of inoperable or
    inaccurate flood gauges. The result was inaccurate predictions of flood
    cresting. This basic infrastructure provides early warning of possible
    dangerous conditions.
        Question. With the fire season approaching, and starting early in
    some regions of the country, is there any reason to be concerned about
    the reliability of such basic firefighting infrastructure as weather
    stations, lightning detection facilities, and lookouts?
        Answer. Although the basic infrastructure is sound, there is a need
    to modernize many fire management facilities to meet health and safety
    codes and to support expanded fire management efforts. The Interior
    bureaus continue to modernize and improve their capabilities to
    identify critical fire weather conditions, and to detect and quickly
    respond to lightning and human caused wildland fires. Current automated
    lightning detection systems are adequate to provide coverage throughout
    most of the lightning-prone areas of the country.
        There is also an ongoing program to expand the capability of remote
    automated weather stations to track weather and fuel moisture
    conditions and provide early warning of unusual or dangerous
    conditions. Further investments in these networks will help to support
    detailed assessments of appropriate management strategies on wildland
    fires, and prescribed weather and fuel moisture conditions on
    prescribed burns.
        The fire weather forecasting section of the National Weather
    Service has always provided a critical service to the wildland fire
    program. We are concerned with efforts to reduce specialized fire
    weather forecasters and replace them with core forecasters. It is
    important to maintain specialized skills in these offices to support
    local and spot forecasting needs identified by the bureaus. In some
    cases, additional services may be required to support expanded
    prescribed burning programs.
        Many fire lookout towers are old and in need of repair, but still
    provide a critical detection service. The bureaus support a continuing
    program within the funding provided to upgrade such facilities along
    with guard stations, fire engine storage areas, air tanker bases, and
    fire equipment caches.
                                    science
        The Administration's budget for the Biological Resources Division
    of USGS includes $10.93 million and 151 FTEs for Cooperative Research
    Units (CRU). These 40 units are located in land grant and historically
    black colleges and universities. Coordination and approval of research
    in these units is done within the unit and among the Federal, State
    agency, and university partners. Similarly, the NPS budget request
    includes $2.4 million and 16 FTEs for Cooperative Ecosystem Study Units
    (CESU). These units, not funded in fiscal year 1997, would help focus
    science research regionally. In its budget, NPS proposes to work
    collaboratively with the USGS BRD to establish the CESUs and reorganize
    former NPS university-based Cooperative Park Study Units (CPSU).
                                science mission
        Question. How does the mission of the BRD CRUs differ from that
    proposed by NPS for its CESUs? Why are the CESUs being established?
    What role will they play that is not being met by other existing
    Interior research labs?
        Answer. As envisioned, the CESU network will enable close
    collaboration among researchers and resource managers to provide
    research, technical assistance, and education needed by land resource
    managers to solve complex interdisciplinary management issues that span
    the physical, biological, economic, social, and cultural sciences. The
    CESUs will not compete with the BRD CRUs or former Cooperative Park
    Study Units, but will identify resource information needs within parent
    agencies, and will offer improved access of managers to BRD and
    university expertise and capabilities.
                              science coordination
        Question. The NPS describes working with the BRD in fiscal year
    1998 to establish the CESUs, yet the BRD does not identify this
    coordination with the NPS as work in fiscal year 1998.
        Answer. Within fiscal year 1997 budget allocations, BRD already has
    research scientists stationed at universities. There is no additional
    cost for BRD to participate in the CESUs, and BRD will benefit by
    having better levels and points of contact with its partner agencies.
                                planning issues
        Habitat Conservation Plans (HCP)--Cooperative planning efforts
    among stewards for habitat on private, local, State, and Federal lands
    have been in the news lately. Several HCPs and Natural Communities
    Conservation Plans (NCCP) have been debated and approved in the larger
    public forum including the Southern California NCCP, the Balcones
    (Texas) Conservation Initiative, and the Brevard County (Florida)
    Scrubjay plan. These show the benefits of dialogue and coordination of
    interests and concerns at all levels.
        Question. Please describe the future of such planning activities,
    and the lessons learned from the process thus far.
        Answer. This program has been successful because the Department has
    forged strong partnerships with private, local, and State landowners to
    find innovative solutions that are biologically, economically, and
    politically feasible for all parties, and conserve listed species.
        The growth in HCPs is due to several factors, primarily the greater
    incentives that have been offered to landowners. Previously, the fear
    of new listings, the potential for additional mitigation measures and
    the potential to have to redo a plan left landowners leery of entering
    into a long-term agreement. The Administration's new ``no surprises''
    policy (a deal is a deal except under extraordinary circumstances) also
    provides certainty to landowners and encourages them to come to the
    table to develop long-term contracts to protect T&E species while
    allowing economic activities to proceed. The ``no surprises'' policy
    has been critical to the willingness of landowners to participate in
    the HCP process.
        Additional factors which have increased the use of HCPs and also
    benefits both wildlife and landowners include: the development of
    multi-species HCPs covering larger geographic areas; substantial
    process improvements detailed in a new user-friendly HCP handbook;
    vastly improved coordination between FWS, the National Marine Fisheries
    Service, and other Federal parties; and a change in the FWS role from
    providing technical assistance only to full participation with
    landowners through all stages of the process.
        These are the kinds of lessons learned which can help guide the
    national debate over reauthorization of the Endangered Species Act
    (ESA). The Department continues to explore additional ideas to forge
    strong partnerships with private, local, and State landowners to find
    endangered species habitat solutions. The Department has aggressively
    accelerated the use of additional existing authorities under the ESA to
    ease the regulatory burdens of the ESA on private, State, and other
    landowners. The Department would not be adverse to incorporating the
    ``10 Principles'' into the ESA. Many of those principles grew out of
    our early involvement with the HCP process.
        The ``safe harbor'' program encourages landowners to provide
    habitat for listed species. Under this program, private landowners with
    assistance from FWS or with other qualified Federal or State agencies
    develop a management program to be carried out on their lands for the
    benefit of listed species. Based on such a program, a safe harbor
    agreement is entered into by FWS and landowner. The FWS, in turn, will
    issue the private landowner a permit for the future take of listed
    species above the existing baseline conditions at the time of the
    agreement.
        The ``no surprises'' policy assures private landowners
    participating in HCPs that no additional requirements will be imposed
    on plan participants for species covered by the HCP except under
    ``extraordinary circumstances.''
        These are partnership agreements where the landowner approaches the
    Department to develop a solution to allow economic development to
    proceed while protecting T&E species. The Department is confident that
    adequate safeguards are built into the permit process to avoid future
    potential problems. Within the framework of the HCP, it is the
    applicant's responsibility to carry out FWS-approved monitoring regimes
    to determine the effectiveness of the terms and conditions of the
    agreement to minimize and mitigate the effects of the action. The FWS
    is responsible for ensuring the compliance with the terms of the HCP
    and evaluating the effectiveness of the actions on the covered species.
        In addition, FWS incorporates adaptive management clauses into HCPs
    that may cover a species for which FWS may not have all of the
    scientific information needed at the time of HCP development. Where
    these data gaps occur, not all of the questions regarding the long-term
    effects of implementing these HCPs can be answered. In these cases, FWS
    has begun to work with the applicants to incorporate adaptive
    management into the strategies designed to mitigate the effects of the
    HCP. These provisions are especially useful for species whose biology
    is not fully understood when the HCP is developed and the landowner
    wants to cover them. These provisions allow FWS to work with the
    landowner to change management strategies within the HCP area, if new
    information about the species indicates this is needed.
        Cooperation to date has been impressive. Indeed, our field offices
    report a surge of additional non-required ``monitoring'' and
    ``consultation'' visits requested by eager HCP permittees.
                              gateway communities
        In fiscal year 1997, NPS is undertaking a pilot program to work
    collaboratively with four ``gateway'' communities on mutual planning
    and development related issues.
        Question. What are the four communities?
        Answer. The NPS identified several candidates for pilot projects
    addressing gateway communities in response to recommendations in the
    Vail Agenda. The initial pilot projects were Sitka in Alaska; Elbe,
    Ashford, and Greenwater near Mount Rainier in Washington; and Tusayan
    adjacent to Grand Canyon in Arizona. Larimer County Colorado,
    Springdale, Utah, and Gettysburg, Pennsylvania also have been
    recognized as models for cooperative relationships with adjacent
    national park units.
        Question. What is the scope of these projects?
        Answer. At Mount Rainier and several other units conservation
    assistance projects have helped local communities develop visions of
    the future and specific goals in the early stages of general management
    planning for the adjacent park. In some cases such as the Grand Canyon,
    the park's general management plan has addressed alternatives for the
    adjacent community to become a staging area for visitor information,
    transportation, and other services. Rocky Mountain National Park co-
    sponsored a conference with local officials in other surrounding
    jurisdictions to share ideas about cooperative planning. At Sitka, the
    park's general management planning project has been coordinated with
    local plans for visitor services and interpretation, transportation
    (including a shuttle bus system), design assistance for signs, and
    overall visual quality.
        Question. What is the projected outcome of these joint efforts?
        Answer. In general, the expected outcome is improved cooperation
    with the communities on transportation, public services, visual
    quality, future development patterns, and other matters. For example,
    the community assistance projects at Mount Rainier provided a basis for
    improved coordination with the communities throughout the general
    management planning process. At Sitka, a plan is currently helping to
    guide local decisions. The Grand Canyon general management plan's
    recommendations for improved visitor services in adjacent communities
    are being addressed as more detailed implementation plans and are being
    developed by the NPS and the towns around the park.
        Question. How were the communities selected for the pilot?
        Answer. The NPS Regional Offices were invited to submit nominations
    for the selection of the initial pilot projects in 1993. Twenty-five
    candidates were submitted, reviewed in the Headquarters Office, using
    criteria such as likelihood of success, and the best proposals were
    identified as pilot projects.
        Question. Is this a model which will be incorporated into future
    NPS planning efforts?
        Answer. Yes, NPS recently conducted two seminars on lessons learned
    in cooperative planning with gateway communities. Several suggestions
    are currently under consideration for how to assure that lessons
    learned with these pilot projects and other initiatives are
    incorporated into routine park management as well as future planning
    projects. However, one of the conclusions is that successful
    cooperation between parks and adjacent communities requires tools and
    relationships that are designed to fit local circumstances. Park
    managers, planners, and local communities will be encouraged to learn
    from past experiences, but to choose from various models one that is
    most likely to work for their specific purposes.
        Question. Do you anticipate any new starts of such efforts in
    fiscal year 1998?
        Answer. Lessons learned from these pilot projects will be
    incorporated in new general management planning projects wherever
    possible. The Rivers, Trails, and Conservation Assistance program also
    is expected to continue placing a high priority on support for some
    projects in communities adjacent to NPS units.
        Question. Are there any plans to coordinate these efforts on an
    interagency basis in areas where other Federal land managing agencies
    have a presence?
        Answer. Cooperative planning efforts with local communities
    routinely involves coordination with other Federal land managers.
    Interagency efforts with the U.S. Forest Service have been most evident
    in examples at Grand Canyon, Sitka, and Mount Rainier, but other
    Federal, State, and local agencies have been involved as well.
    Cooperation with other Federal agencies is expected to continue in
    future projects.
                                   volunteers
        The Department and the land managing agencies have taken some
    creative approaches to supplement Federal funding of public lands
    management. In the past several years there has been an enhanced
    revenue stream through the recreation fee demonstration program,
    through the efforts of cooperating associations and friends groups, the
    use of volunteers, and partnering with private industry (i.e., recent
    American Airlines announcement).
        Question. Please describe the use of volunteers in each applicable
    Interior agency and the impact that volunteer, community service, and
    internship programs has had on the ability of the agencies to
    accomplish their responsibilities.
        Answer. The BLM, USGS, FWS, NPS, BIA, and BOR all have successfully
    used volunteers to supplement the work of bureau employees as follows:
        Since 1981, volunteers have played an important role in helping BLM
    achieve its mission. Each year over 19,000 volunteers provide vital
    assistance to BLM in the management of public lands and associated
    resources. Volunteers not only contribute work time, which is estimated
    to be valued at over $13 million each year, but they are taking on
    increasingly important roles in serving as team members, providing
    customer service, serving as important links to local communities, and
    providing innovative ideas and resources. Each of the 12 BLM State
    Offices has an active volunteer program where people of all ages pitch
    in without compensation to do such things as build trails, restore
    watersheds, patrol cultural sites, write informational brochures, staff
    visitor centers, train wild horses, clean-up recreational sites,
    provide engineering support, program computers, and conduct educational
    programs. Recently BLM honored eight outstanding volunteers for their
    dedication and contributions in the following areas: educational and
    public presentations about the BLM Adopt-a-Horse program, mechanical
    engineering skills, recording archaeological sites, conducting weekly
    maintenance of trailheads and campsites, conducting interpretive talks,
    staffing information desks, and greeting visitors.
        The BLM is also actively involved in community service through such
    events as the National Public Lands Day, an annual volunteer program
    designed to bring thousands of citizens to public land sites for hands
    on restoration work and conservation education. The BLM also sponsors a
    number of environmental education programs for all age groups of school
    children in both classroom settings and field site exercises. Outdoor
    classrooms provide information and instruction in a variety of
    subjects, including geology, archeology, wildlife, and botany. The
    programs are designed to spark interest in children in both stable and
    at risk environments to learn about cultural and natural resource
    issues and gain a better understanding and appreciation for their
    world.
        AmeriCorps participants are accomplishing essential on-the-ground
    work in environmental protection and restoration activities for the
    Department and to the mutual benefit to both the Federal Government and
    our partners.
        At Fort Ord, AmeriCorps participants have worked to protect 7,250
    acres by building fences and barriers which protect many acres of new
    habitat created for the reintroduction of endangered species as well as
    300 habitat improvement and erosion control projects. Protection of
    sensitive wetlands and endangered species habitat through the planting
    of shrubs and grasses continues. Transformation of the former military
    base to public recreation lands and wildlife habitat has begun.
        The USGS Volunteer for Science Program is an invaluable component
    of the USGS workforce. Every year nearly 10,000 volunteers from all
    segments of the American population--from school children to scientists
    emeritus--perform tasks ranging from entry-level clerical to highly
    technical scientific services. The Volunteer for Science Program is
    dynamic and flexible enough to satisfy high school students' community
    service requirements, provide internship opportunities for college
    students, give retired scientists and technical experts a place to
    continue to be productive and valuable to this Nation, and fulfill
    personal desires to contribute to the wise management of our natural
    resources.
        The USGS gains significantly by receiving nearly one-half million
    hours of assistance annually in support of its mission. On a cost
    basis, volunteers replace nearly $6.5 million in salary dollars. In
    some cases, volunteer time is key to project success and tips the
    balance from not getting the job done to accomplishing the job within
    the needed time frame. Even if USGS were provided the resources to hire
    employees to replace volunteers, it would be difficult to find the
    numbers of people with the expertise to do what our volunteers do free
    of charge. Many volunteers are expert in geology, digital mapping,
    engineering, computer science, ornithology, parasitology, mammalogy,
    ichthyology, ecology, and biology. Others are experienced in public
    education, technical writing, accounting, animal husbandry, and other
    specialties.
        In 1982, FWS was aided by 4,521 volunteers who contributed 128,440
    hours. Participation has steadily increased to 25,840 volunteers and
    1.1 million hours in 1996. These volunteers work at a variety of tasks
    ranging from construction and repair projects to orienting and
    educating visitors to assisting with fish and wildlife surveys and
    habitat improvement projects. Volunteers include individuals, boy
    scouts, girl scouts, American Association of Retired Persons, Friends
    groups, local Audubon Chapters, and school groups to name a few. The
    FWS also uses volunteers from organizations such as the Student
    Conservation Association and AmeriCorps.
        Volunteers supplement FWS resources, as described in the following
    examples: Edwin B. Forsythe NWR volunteers assisted in piping plover
    nest surveys and population monitoring when the refuge staff was unable
    to continue its weekly waterbird surveys. Ash Meadows NWR volunteers
    removed 240 inactive utility poles during April and May. They donated
    504 hours and saved $100,000 for FWS. At Bitter Lake NWR, the Roswell
    Job Corps constructed a handicapped-accessible Watchable Wildlife
    overlook.
        At the Rio Grande project, AmeriCorps participants have restored
    150 acres of riparian habitat, planted some 15,000 seedlings for
    erosion control, and conducted vegetation studies as well as photo
    documentation of oil spill contamination and cleanup efforts. Over 70
    ecosystem, fish, wildlife, and water quality research projects have
    begun and been completed. In addition, endangered species ``tool kits''
    for teachers have been created.
        The NPS considers anyone to be a volunteer who contributes his/her
    time and expertise to the agency for no pay. Official NPS volunteers
    must sign a volunteer agreement to be covered under the provisions of
    P. L. 91-357, as amended. The NPS uses volunteers in nearly every
    sector of the agency and almost every unit of the National Park System.
    Volunteer activities in NPS are summarized in nine general categories.
    The following list summarizes NPS volunteer activities for fiscal year
    1996: Administrative Support, five percent; Campground Hosting, eight
    percent; Curation, two percent; Archeology, one percent;
    Interpretation, 39 percent; Maintenance, 16 percent; Resource and
    Visitor Protection, five percent; Resource Management, 19 percent; and
    Other, five percent.
        At the Everglades-South Florida ecosystem project, AmeriCorps
    participants have conducted 78 fish, wildlife, and water quality
    research projects at four National Parks and six Fish and Wildlife
    units. Automated water monitoring stations and Coral Reef nurseries for
    future marine habitat restoration have begun. Exotic plant removal has
    been accelerated.
        Volunteers are nearly always beneficial in BIA response operations.
    However, much of the response to recent storm damage undertaken by BIA
    required use of equipment and trained personnel for major repair work.
    No volunteer equipment and/or operators were available to assist during
    the disaster periods. On the community services side, Indian
    communities came together to work for the common good during the
    crises. Both the youth and elderly of Indian communities assisted by
    filling and stacking sandbags; evacuating homes; providing shelter for
    family, friends, and neighbors; helping unload trucks; and delivering
    food. The communities did what they could do within their limited
    resources and abilities to assist each other. Unfortunately internship
    programs are not available in all communities to assist in the
    necessary repairs and carry out the needed rebuilding and construction
    of damaged buildings, roads, irrigation structures, etc.
        The BOR has many volunteers which have proven to be a successful
    tool in productivity and efficiency for the Bureau and local
    communities. Volunteers in BOR are used in a variety of ways. Some
    examples from the past year include: providing clerical and
    administrative support; providing visitors to Hoover Dam with
    information and assistance; assisting in cataloging and curating Hoover
    Dam's museum quality documents, photos, and other historical items; and
    serving as judges for the National Science Fair. In one region alone,
    specific programs include: Partners in Education, 47 volunteers/607
    hours; Participation in Paint The Town 28 volunteers/156 hours;
    Participation in Rake-Up-Boise 31 volunteers/124 hours; Catch A Special
    Thrill (C.A.S.T.) Fishing 90 volunteers/720 hours; Idaho Adopt-a-
    Highway 10 volunteers/40 hours; Christmas Adopt-A-Family 23 volunteers/
    64 hours; Employee-Sponsored Scholarship Fund 20 volunteers/90 hours;
    and Area Pond Clean-Up six volunteers/48 hours.
                                   education
        Question. Is the Department working with the Department of
    Education on science issues in education?
        Answer. The Interior Education Committee, which includes
    representation from each of the bureaus, has worked with the Department
    of Education to keep abreast of the Federal role in science education.
    The Goals 2000 Subcommittee to the Interior Education Committee has
    convened meetings on matters relating to the Educate America Act--Goals
    2000. The Department of the Interior's school partnership program is
    one of the focuses of the subcommittee. The subcommittee also keeps
    abreast of new initiatives sponsored by the Department of Education.
        Question. Which agencies are involved in this effort?
        Answer. The USGS has cooperative education projects with the
    National Aeronautic and Space Administration and the National Oceanic
    and Atmospheric (GLOBE Program) in addition to cooperative projects
    with other bureaus within Interior, including NPS and BIA. A
    subcommittee to the National Science and Technology Council with
    interagency representation meets to discuss grant programs in
    educational technology for school districts (K-12). The Subcommittee on
    Educational Technology is sponsored by the Department of Education and
    the Office of Science and Technology Policy. The USGS represents the
    Department on this committee for fostering technology in education.
        Question. Describe how the Department shares with the children in
    America's schools the lessons learned though research on public lands
    and in the bureaus.
        Answer. The USGS has 14 partnership schools nationwide in
    accordance with Executive Order 12821. The Interior Subcommittee works
    with the bureaus to provide guidelines for administering a formal
    School Partnership Program. The USGS also serves students with the
    Volunteer for Science Program, which dovetails with community service
    programs in most schools nationwide. The USGS administers the
    Excellence in Education Initiative, a project-based program, to develop
    materials for the K-12 education community and to teach teachers about
    the latest scientific developments in the earth and biological
    sciences. The USGS Visitors Center hosts about 10,000 visitors each
    year from schools throughout the DC metropolitan area via a tour
    program, activities-based learning, and science summer camp.
                              employee development
        Question. How does the Department ensure that its employees are
    kept current on emerging technologies and competencies in professions
    relating to the sciences?
        Answer. The Department encourages state-of-the-art technical
    competency by promoting and supporting continuous academic development
    including graduate course work, research, and independent study.
    Because of the job relatedness of technical academic studies, most
    course work is paid for by the employing bureaus. Technical
    professionals are also encouraged to attend conferences and symposia,
    to be active members in professional societies, and to subscribe to
    professional journals and publications. Costs associated with these
    activities, including travel and fees, are typically borne by the
    bureaus; employees are usually permitted to participate on Government
    time, as part of their regular duties.
        Question. Do the bureaus have similar employee development goals
    and moneys available for training?
        Answer. Employees of bureaus such as USGS, FWS, and the Bureau of
    Reclamation are regarded worldwide as experts and leaders in their
    fields. This level of recognition is gained only by state-of-the-art
    competency acquired through constant employee development. The
    financial commitment to this development is many times greater, in
    absolute terms and as a percentage of overall funding, than in non-
    scientific bureaus. Non-scientific employees in all bureaus are also
    supported in maintaining a high level of technical competency in their
    occupational areas.
                     government performance and results act
        The Government Performance and Results Act (GPRA) requires that
    each agency submit by September 30, 1997 a strategic plan for program
    activities.
        Question. What Congressional consultations have taken place to
    date, both on a departmental and bureau level?
        Answer. The following table summarizes Interior's consultation
    process with the Congress since November of 1996. To date the
    Department and all eight of its bureaus have consulted with
    Congressional staff including the House GPRA team.

                                           CONGRESSIONAL CONSULTATION SCHEDULE
    ----------------------------------------------------------------------------------------------------------------
                  Bureau                        Date                             Parties consulted
    ----------------------------------------------------------------------------------------------------------------
    Department, NPS..................  Nov. 20,1996.........  House/Senate Appropriations staff.
    Department, NPS, OSM.............  Dec. 16, 1996........      Do.
    MMS..............................  Feb. 4, 1997.........      Do.
    Department/NPS...................  Feb. 7, 1997.........  Senate Energy staff/Senate Environment and Public
                                                               Works staff.
    FWS..............................  Feb. 24, 1997........  House/Senate Appropriations staff.
    MMS..............................  Feb. 26, 1997........  Government Operationsand Reform staff.
    USGS.............................  Feb. 28, 1997........  House Appropriations staff.
    MMS..............................  Mar. 5, 1997.........  House Resource Committee staff.
    NPS, BLM.........................  Apr. 18, 1997........  House GPRA team.
    FWS, USGS........................  Apr. 25, 1997........      Do.
    BOR, WRD-USGS....................  May 2, 1997..........      Do.
    MMS, OSM.........................  May 9, 1997..........      Do.
    BIA..............................  ...do................      Do.
    Department.......................  May 8, 1997..........      Do.
    FWS..............................  June 26, 1997........      Do.
    Department.......................  July 11, 1997........      Do.
    Department--Insular Affairs......  Aug. 21, 1997........  House Appropriations staff.
    FWS..............................  Aug. 25, 1997........      Do.
    ----------------------------------------------------------------------------------------------------------------

        While the Senate is still organizing its GPRA review process,
    copies of draft strategic plans have been sent to Majority and Minority
    staff for the following Committees: Senate Appropriations; Senate
    Budget; Senate Governmental Affairs; Senate Energy; and Senate
    Environment and Public Works. The Department has offered and is
    available for further consultations.
        Question. Please describe the efforts undertaken to date by the
    various land managing bureaus to coordinate development of meaningful
    goals and measurements for responsibilities common to the bureaus.
        Answer. The Department of the Interior, as part of its strategic
    planning process, has established a Strategic Planning Steering Group
    to guide the development of the Interior bureau strategic plans. This
    group is composed of senior planning officials from each bureau, as
    well as representatives from the Departmental budget and financial
    management offices. This group is working closely to develop the bureau
    components of the Department's strategic plan and providing the
    mechanism for the bureaus to coordinate the development of strategic
    goals and measures.
        The BLM has sponsored the Natural Resources Performance Measures
    Forum that has brought senior planners from BLM, FWS, BIA, NPS, USGS,
    the Environmental Protection Agency, Department of Agriculture,
    Department of Defense, Corps of Engineers, National Oceanic Atmospheric
    Administration, and other agencies together over the last year to share
    plans and discuss goals and performance measures for common issues.
    This group has been successful in establishing the dialogue needed for
    agency plans to be more complementary.
        Question. What mechanism is in place to review the multiple plans
    submitted to the Department by the bureaus?
        Answer. The Office of Planning and Performance Management, which
    reports to the Assistant Secretary--Policy, Management and Budget, is
    responsible for coordinating the review of all the bureaus plans.
    Bureau plans are forwarded to key Departmental Offices for agreement
    with policy, legal, and budgetary issues.
        Question. How will different measures of common goals be managed?
        Answer. The Department of the Interior deals with many complicated
    issues in the management and preservation of the Nation's public lands.
    The Department has a diverse set of missions and program
    responsibilities that inherently are ``in tension'' with each other.
        Each bureau is developing a plan with goals that support its
    legislated mission. While several bureaus have land management
    responsibilities, in most cases the legislation requires different land
    uses with different outcomes. For example BLM is required to manage
    lands for multiple use including consumptive as well as recreational
    uses while NPS legislation directs the agency to preserve the natural
    and historic resources of the land and provide for the public's
    enjoyment of those lands in perpetuity. Because of these fundamental
    differences, each bureau has developed goals and measures that allow
    the organization to measure performance and manage their organizations
    to fulfill their legislated mission.
        Question. Do you anticipate common vocabulary among the land
    managing agencies in terms of defining goals and measuring progress?
        Answer. The Natural Resources Performance Measures Forum sponsored
    by BLM has worked extensively on these issues and progress has been
    made but much remains to be done. The forum has worked to define
    ``recreational opportunities'' and the ``health of the land'' but there
    is no consensus for measurement across the Government. Resolving this
    and related cross agency issues are anticipated to be one of the
    challenges that will be addressed as future iterations of strategic
    plans are developed.
                  grand staircase-escalante national monument
        The President created the Grand Staircase-Escalante National
    Monument in September 1996, and BLM has been charged with planning and
    operating the Monument. The BLM has begun an estimated three-year
    planning process.
        Question. Please describe efforts to coordinate facilities,
    tourism, and visitation issues with other recreational facilities in
    the vicinity of the Grand Staircase-Escalante National Monument area.
    These other recreational facilities include Utah State Parks, as well
    as Forest Service and NPS units.
        Answer. The Monument planning team has taken a number of steps to
    ensure full coordination with other recreation facilities near the
    Grand Staircase-Escalante National Monument. The Monument planning team
    includes five members nominated by the Governor of Utah, who was
    invited to do so by the Secretary. These members have a thorough
    knowledge of local development issues, including tourism. They include
    a community planner from the Five County Associations of Governments,
    an employee of the State Parks Division, and an employee of the
    Wildlife Resources Division. The planning team has also been in
    frequent contact with representatives from Bryce Canyon National Park,
    Capitol Reef National Park, Glen Canyon National Recreation Area, Dixie
    National Forest, and Kodachrome Basin State Park. The BLM will continue
    to work closely with these representatives during the planning process.
    The planning team also includes two experienced BLM recreation planners
    who will be coordinating with local tourism and recreation interests.
        Through the agreements with Kane and Garfield Counties, BLM has
    already taken steps to ensure that the planning team will be kept fully
    abreast of important local information, including:
      --Socioeconomic information, including population trends and data;
      --Opportunities to create and maintain sustainable community
            economies;
      --Infrastructure;
      --Public safety needs including law enforcement, search and rescue,
            and aid to visitors in the Monument; and
      --In the case of Kane County, an updated county plan.
        Question. Please describe efforts to involve the local communities
    in the planning efforts for the Monument.
        Answer. The BLM has established a variety of formal and informal
    mechanisms to ensure that the planning team works closely with local
    communities and governments during the planning process. Monument
    manager Jerry Meredith, who served formerly as Cedar City District
    Manager, has brought to the planning team extensive experience in
    working with the local communities and governments. He has met with all
    the mayors of communities near the Monument, with the exception of Big
    Water. Monument staff participate in regular meetings with each county,
    as well as in meetings of the Southern Utah Planning Advisory Council.
    The planning team has a formal working relationship with the Community
    and Economic Strategic Planning Committee, which is appointed by the
    Governor. As noted earlier, the Secretary invited the Governor of Utah
    to provide five members for the planning team. Among the five full time
    members nominated by the Governor and agreed to by the Secretary is a
    community planner from the Five County Association of Governments who
    has considerable background and familiarity with local needs and
    concerns regarding the Monument.
        The BLM has also acknowledged the important role of communities and
    local governments in the planning process by providing them with
    financial assistance. In the fall of 1996, BLM offered to extend
    cooperative agreements with both Kane and Garfield Counties to help
    them participate in the planning process. Although Garfield County
    initially declined the offer, both counties have since joined BLM in
    signing cooperative agreements which will be used to facilitate the
    counties' participation in the Monument planning process.
        The BLM is also a participant, on an ex-officio basis, on the State
    of Utah's Community and Economic Development Strategy Team. The team,
    made up of representatives of local towns, counties, civic
    organizations, and business groups appointed by Governor Leavitt, has
    been charged with the development of a strategic plan for lands
    adjacent to the Monument as well as looking at other Monument-related
    issues that directly affect surrounding communities.
        The NPS is currently working with four ``gateway'' communities near
    national park sites to develop planning documents and guidelines for
    development.
        Question. Will the lessons learned from that experience be of value
    to BLM during its planning for the Grand Staircase-Escalante National
    Monument?
        Answer. The BLM understands that in planning for the Monument, the
    planning team must build on its own experience, as well as that of
    other agencies, including NPS and the Forest Service. Shortly after the
    designation, BLM contacted Warren Brown, Program Manager for Park
    Planning and Special Studies of NPS, to determine what information
    could be learned from NPS park and Monument planning efforts. In
    addition, BLM has consulted with individuals from the Great Basin
    National Park, Golden Gate National Resource Area, Crater Lake National
    Park, Mojave National Preserve, Columbia River Gorge National Scenic
    Area, Mt. Saint Helens National Volcanic Park, and the El Malpais
    National Conservation Area. These areas were all designated relatively
    recently. The BLM will continue to consult with these individuals
    throughout the planning process to take advantage of their knowledge
    and experience, particularly with regard to gateway communities.
        Question. Please describe opportunities for employment of local
    residents.
        Answer. The BLM anticipates that the Monument will stimulate long-
    term, sustainable employment opportunities, particularly within the
    communities adjacent to the Monument. The area has already seen an
    increase in the demand for visitor services and information, as well as
    a need to address concerns over public safety. The BLM also anticipates
    that the Monument plan will provide for infrastructure improvements at
    campgrounds and day use areas, which in turn will be tied to job
    opportunities for local residents. Public interest and support for the
    Monument is already apparent. In May, 1997, the Escalante Visitor
    Center reported 4,000 visitors, twice the previous monthly high of
    2,000. The number of visitors to the Monument itself is estimated to be
    much higher still. These visitors will provide economic benefits for
    restaurants, motels, gas stations, and other recreation-related
    businesses. Moreover, while it is difficult to assess long-term growth
    in employment opportunities outside the Monument's boundaries, BLM
    expects that the Kane and Garfield counties' success in attracting new
    and more diverse businesses will only be heightened by visitor interest
    in the Monument.
                         vanishing treasures initiative
        For fiscal year 1998, NPS has proposed a new 10-year, 41-park
    initiative in the arid west to bring historic and prehistoric
    structures maintenance from emergency repairs resulting from
    deteriorating conditions to a stabilized condition that will allow
    maintenance and preservation on a routine basis. The fiscal year 1998
    request for the ``Vanishing Treasures'' initiative is $3.5 million and
    involves physical restoration as well as 18 new FTEs and associated
    training. The FTE proposed essentially doubles the number of personnel
    now occupying positions of similar responsibility, and begins the
    growth curve in personnel currently identified as necessary to carry
    out the 10-year initiative.
        Question. Given the large investment in attracting and training
    skilled preservation maintenance workers and archeological and cultural
    resource preservation personnel, and given the fact that many other
    Federally-managed arid lands in the west have similar resources, do you
    anticipate that other land managing agencies will look to NPS to
    provide FTE and technological resources for stabilization of their
    resources?
        Answer. The NPS acknowledges its responsibility under the National
    Historic Preservation Act and other authorities to provide training,
    technical information, and other assistance to other Federal agencies
    in preserving prehistoric and historic places under their jurisdiction
    or control. However, the Vanishing Treasures proposal described in the
    budget request has been calculated in terms of expertise and work
    needed in 41 parks in the arid west. The requested dollars and FTE were
    not calculated to enable NPS to provide money or FTE to do work on
    other Federal lands. It is possible, however, that other agencies and
    parties such as owners of certain types of National Historic Landmarks
    could participate in Vanishing Treasures-sponsored training and could
    benefit significantly thereby.
        Question. Are there similar resources on BLM, FWS, and Bureau of
    Reclamation lands that might also need protection?
        Answer. Most extensive tracts of Federal lands, including lands
    managed by other Federal agencies in the arid west contain prehistoric
    and historic ruins of varying degrees of significance, preservation,
    and preservability.
        Question. What about on BIA lands?
        Answer. The above answer applies to resources on BIA lands as well
    as to those on BLM, FWS, and BOR lands.
        Question. Are there plans for technical assistance to the BIA?
        Answer. Presently, there are no plans for such technical
    assistance, but should BIA request NPS assistance, NPS would do its
    best to help.
        Question. Are there similar assemblages of sites or artifacts
    elsewhere in the U.S. that could be protected through similar
    initiatives?
        Answer. One could group historic and prehistoric resources into
    categories and describe their needs in that way. The problems of
    preserving ruins in the arid west are so similar from one park to
    another, and the specific needs so acute, that the Vanishing Treasures
    parks make up an obvious grouping within which to solve their problems.
    The Vanishing Treasures initiative is only part of the larger $6.5
    million request for increased cultural resource management, and other
    elements of the request are proposed to assist other sites in the
    United States.
                                 infrastructure
    Roads maintenance
        A 1997 joint reinvention study between BLM and the Forest Service
    identified savings of up to 20 percent in the efficiency and amount of
    road maintenance that could be accomplished through sharing equipment
    and improving coordination between among the agencies.
        Question. Are the recommendations in this study being implemented?
        Answer. Yes, many of the recommendations in the report are being
    implemented. All States are evaluating their heavy equipment needs and
    equipment for opportunities for cost saving through increased
    utilization and partnering with the Forest Service. The BLM Washington/
    Oregon State Office is currently piloting interagency crews. Several
    local agreements are being pursued in many western States. The BLM and
    Forest Service are in the final steps of establishing a national level
    Interagency Agreement which can be used by local offices to streamline
    coordination and resource sharing.
        Question. Are there lessons learned that can be applied to
    cooperative work with other agencies?
        Answer. Yes, BLM and the Forest Service are leading the way in
    working together to better service the general public and commodity
    users in transportation management. Because the missions of these two
    agencies are closely aligned, there are more opportunities for cost
    saving and improved efficiencies between BLM and the Forest Service.
    However, opportunities exist with FWS, NPS, BIA, and other Federal,
    State, and local land managing agencies. The national agreements will
    become models for other agencies to follow.
                             federal lands program
        Since the 1982 authorization of the Highway Trust Fund, almost $1.1
    billion has gone to NPS through the Federal Lands Highway Program and
    the Park Roads and Parkway Program. In order to bring the roads and
    related facilities to a condition in which the parks would be able to
    maintain that infrastructure through annual operations funding, FHWA
    and NPS analyzed data which indicate a $2.2 billion backlog of
    necessary projects.
        Question. How does NPS propose to address these necessary projects?
        Answer. There are some 8,000 miles of public park roads and more
    than 1,250 bridges under the jurisdiction of NPS serving units of the
    National Park System. About 60 percent of these roads are paved. The
    current condition ratings of paved park roads are 38 percent ``good'';
    22 percent ``fair''; and 40 percent ``poor/failed''. Of the more than
    1,250 bridges in the National Park System, 35 percent are deficient. At
    the currently authorized Federal Lands Highway Program level of $84
    million, FHWA engineering analyses indicate that an additional one
    percent of park roads will continue to deteriorate to a ``poor'' or
    ``failed'' condition each year. Based on FHWA estimates, approximately
    $120-125 million annually is needed to reverse this rate of
    deterioration. In line with that estimate, the Administration is
    requesting a total of $161 million beginning in fiscal year 1998 under
    the Federal Lands Highway Program, subject to Congressional
    reauthorization of the program, which will be utilized to address
    National Park Service Road and Transportation needs as follows:
      --$120-125 million annually to prevent further deterioration of the
            paved park road and parkway infrastructure to ``poor'' or
            ``failed'' condition;
      --$25-35 million annually to complete construction of Congressionally
            authorized parkway projects; and
      --$5-15 million annually to implement alternative transportation
            systems in selected parks.
        Question. Is there a priority list of projects?
        Answer. Yes, NPS maintains and periodically updates a Servicewide
    priority listing of needed road and bridge projects.
        Question. Do immediate safety concerns take precedence over planned
    projects?
        Answer. Yes, and dependent upon the availability of funds, such
    problems are addressed as soon as possible.
        Speed limits on roads which run through NPS sites has been the
    subject of much debate recently. There has been public concern over the
    number and severity of accidents which have occurred on the George
    Washington Memorial Parkway in Virginia. Excessive speed has been cited
    as the cause of most of the accidents. In Organ Pipe Cactus National
    Monument in Arizona the speed limit has recently been raised to 65
    miles per hour-far above the 45 mph set in regulations for most of the
    NPS roads.
        Question. How does NPS plan to deal with the issue of roads serving
    dual purposes, visitors and through travelers?
        Answer. The problems associated with park road serving dual
    purposes presents an ongoing challenge to park managers. In response to
    several highly publicized accidents on the George Washington Memorial
    Parkway, park management there has added additional Park Police patrols
    to enforce posted limits, and is using two mobile, radar speed
    indicator display signs to slow down traffic. Also, NPS recently began
    installing additional median guardrails to lessen the potential for
    head-on collisions on the parkway north of Spout Run in Virginia.
        The roadway through Organ Pipe Cactus in Arizona is a locally
    administered highway with the speed limit set by local authorities.
    Park management there has been engaged in negotiations with the State
    officials in an attempt to get the speed limit lowered, and NPS is on
    record in opposition to their recent decision to raise the speed limit.
        With respect to the general issue of park roads, NPS, in
    cooperation with the Federal Highway Administration, is currently
    developing various management systems and investment strategies to
    influence future park road program focus. Factored into this strategy
    as a key component is the need to address the through travel issues,
    growing congestion, and associated resource concerns that have become
    increasingly serious problems in national parks.
        Where appropriate, alternative transportation modes are being
    considered to help handle the rapidly growing traffic demands and to
    reduce the resource impacts associated with increasing numbers of
    visitors and motor vehicles. A study on alternative transportation in
    parklands was submitted to Congress in 1994. Also, a Presidential
    memorandum dated April 22, 1996, directed the Secretary of the
    Interior, in consultation with the Secretary of Transportation, to
    enhance access to, and mobility within, our parks. In line with this,
    NPS has initiated a multi-year program of planning efforts for
    alternative transportation systems, which is now well underway in
    Yosemite, Yellowstone, Denali, Zion, and Grand Canyon National Parks.
    Additional transportation planning efforts have also been initiated at
    Acadia, Crater Lake, Sequoia, Mount Rainier, Indiana Dunes, the
    Presidio, and Bandelier.
        Question. Is there likely to be an increase in construction and
    upgrading of the roads in response to more traffic and higher speeds?
        Answer. In response to more traffic, NPS intends to look primarily
    at various alternate transportation modes. In line with this, and in
    response to many years of funding shortfalls, and to maximize use of
    limited fiscal resources, NPS, in cooperation with FHWA, is currently
    developing enhanced investment strategies using various management
    systems to influence future program focus. Factored into this strategy
    as a key component is the need to address the congestion and associated
    resource concerns that have become an increasingly serious problem in
    national parks.
        In terms of increased speeds, NPS continues its law enforcement
    presence in order to ensure the safety of the roadway. Unfortunately,
    NPS law enforcement personnel can not be in all places at all times, so
    there are accidents that result from excessive high rates of speed.
        Question. How would priorities be set for projects of this type?
        Answer. A study on alternative transportation in parklands was
    submitted to Congress in 1994. A Presidential memorandum dated April
    22, 1996, directed the Secretary of the Interior, in consultation with
    the Secretary of Transportation, to enhance access to, and mobility in,
    our Nation's parks. It is estimated that $5-15 million annually is
    needed to initiate a multi-year program of planning efforts and
    projects for alternative transportation systems in selected parks.
                                mapping project
        In fiscal year 1998 the USGS proposes to establish a mapping and
    modeling database over a three-year period using Landsat data and
    mapping technologies to track population growth and land development.
        Question. Which cities have been selected for this program?
        Answer. The four metropolitan areas proposed are Chicago, New York
    City, Philadelphia, and Portland, OR.
        Question. Are these areas of ecological concern or where HCPs are
    under development?
        Answer. The four cities were selected from the American Farmland
    Trust (NFT) list of high priority cities where urbanization threatens
    agricultural land. Further refinement of the list was done by examining
    cities where there was concern for impacts on ecological diversity in
    very different ecological regions. Specific city selections had
    additional regional criteria as well. Philadelphia and New York were
    then identified as major urban areas that would continue the work
    started in the Washington/Baltimore area, thus expanding into major
    portions of the Eastern Corridor and the Eastern Megalopolis. Chicago
    was identified as a critical mid-western city that met the NFT and
    ecological criteria. Portland, Oregon was selected because the effect
    of different land use planning models being used in Washington and
    Oregon can be compared in subsequent research. It met the other NFT and
    ecological criteria as well. All cities were chosen to meet multiple
    criteria important for geographic research.
                                     ______

                   Questions Submitted by Senator Ted Stevens
                brooks river, katmai national park access issue
        The National Park Service (NPS) has prepared a final Environmental
    Impact Statement (EIS) and Record of Decision which would establish a
    management plan for the Brooks River area in Katmai National Park. The
    plan's intent is to regulate day users in order to lessen stress on
    bears. However, NPS picked the most expensive alternative, which
    requires moving Brooks Camp to the other side of the River, rather than
    building bear viewing boardwalks in the heavily used areas. I am
    advised that moving Brooks Camp may require a $9 million appropriation.
    In addition to adopting a plan that would require high funding, the
    plan would also regulate day use through caps and include overnight
    guests and anglers in these caps. Very recently, it has been reported
    that NPS is enforcing these caps through requiring registration of
    people taking flights to the Brooks River area.
        Management could occur through a system of boardwalks to contain
    heavier day uses to the bear using areas and vicinity, while allowing a
    greater number of people to enjoy their country's park system and
    reducing costs substantially.
        Question. Under what authority has NPS adopted the policy of
    requiring registration of users going to the Brooks River area?
        Answer. Under the fee demonstration program that was authorized by
    the Omnibus Consolidated Rescissions and Appropriations Act of 1996 (P.
    L. 104-134).
        Question. What steps are involved in the registration process?
        Answer. Advance reservations can be made by calling Destinet, who
    is handling reservations for Katmai under the NPS reservation contract.
    The visitor or commercial operator can also pay the user fee and check
    in upon arrival at Brooks Camp if they prefer. For 1997, there is no
    cap on the number of people using the area.
        Question. Is registration provided through travel agencies for
    groups of tourists from outside Alaska?
        Answer. Yes, travel agencies have been advised that Destinet will
    make group reservations through them if they want. For example, Alaska
    World Tours, one of the biggest travel agencies in Alaska, is up-to-
    date on the reservations system and is utilizing it. If a client of a
    travel agency does not use Destinet's service, they are still able to
    pay their fee upon arrival.
        Question. Have the access needs and use patterns of Alaskans been
    considered in establishing registration procedures?
        Answer. Yes; the development concept plan examined the following
    areas in establishing the reservation system: historic day use patterns
    at Brooks Camp, Limits of Acceptable Change (defining when visitor
    impacts have reached unacceptable limits for the visitor--the Limits of
    Acceptable Change study indicated that increasing visitor numbers were
    having a negative impact on the quality of the visitor experience),
    numbers of bear/human interactions per year, and local visitor use of
    the Brooks Camp area. Special allowances have been made for the local
    private visitors from the villages near Katmai.
        Question. Is NPS intending to restrict visitor access to the Brooks
    River Area in any manner this summer?
        Answer. No, NPS does not intend to restrict access to the Brooks
    River area this summer.
        Question. If so, how have affected Alaskan interests, e.g.,
    concessionaires, the State of Alaska, pilots, and anglers, been
    notified?
        Answer. Even though no day use restrictions are in place for 1997,
    NPS has been working with affected Alaska interests to gather input and
    provide adequate advance notice of the 1998 day use regulations. The
    results of over eight years of meetings, drafts, and input were
    included in the development concept plan. In addition, four meetings
    for commercial operators were conducted in May and June of 1997: one in
    Homer, two in Anchorage, and one in King Salmon. The goal was to get
    input from the operators regarding implementation of the day use limit
    and reservation system for 1998.
        Question. Why is NPS willing to spend $9 million on tearing down
    one facility and moving it a relatively short distance away without
    first trying a more extensive boardwalk system to handle the bear
    viewing day users?
        Answer. The issue and the development concept plan focuses on other
    issues than visitor use. Brooks Camp is on top of a major
    archaeological site which is a national historic landmark and listed on
    the National Register of Historic Places. This site contains human
    burials, subterranean dwellings, and significant ethnographic resources
    for Native Alaskans. The NPS wants to be sensitive to this important
    cultural resource. Operation and maintenance of NPS and concessionaire
    facilities continues to cause resource degradation of these cultural
    sites. In addition, the campground is located in a major bear travel
    zone, which impacts visitor safety. The new site does not include
    critical bear habitat or potentially significant archaeological sites.
    The current location would not have been selected had there been
    awareness of the cultural sensitivity of the area. Additionally, there
    is considerable cost associated with maintaining the aging
    infrastructure and protecting the archaeology in the current location.
        Question. Why would visitor caps include persons not there for bear
    viewing?
        Answer. The visitor cap was established based on day use patterns
    and statistics gathered over the last several years. These statistics
    represented all day users to the area and were not separated according
    to type of use such as fishing, bear viewing, or photography. The
    average daily high for day use at Brooks Camp is about 110. However,
    due to inclement weather, some days reached peaks of 170 users which
    negatively impacted the visitor experience. All visitors to the area
    impact the visitor experience and the resources as identified in the
    Limits of Acceptable Change study portion of the development concept
    plan. The Brooks River corridor is less than 200 acres of land, and all
    park visitors, whether or not they are there for bear viewing,
    congregate in this small area.
                            kantishna mining claims
        When the Kantishna mining district was added to Denali National
    Park in 1980, the local miners received assurances that mining could
    continue. Just a few years later, environmental groups sued and the
    court imposed an injunction on mining until an EIS could be completed.
    Because it took NPS fours years to complete the study, many miners went
    bankrupt while they were prohibited from mining.
        This Subcommittee met in Alaska with the Kantishna miners in 1989.
    Because NPS refused to approve a single plan of operation allowing
    mining to continue, in fairness to the miners, I agreed to a buy-out
    plan to acquire the mining claims so the miners could get on with their
    lives.
        The U.S. Geological Survey (USGS) estimated that one family's
    claim, the Wieler brothers, was worth $4 million. Yet NPS appraised it
    at $200,000. Because $400,000 of reclamation work needed to be done,
    NPS said the family would have to PAY the Government $200,000 to sell
    its claim.
        It has now been nine years since this Subcommittee met with the
    Kantishna miners in Denali, but many of the claims are still
    unresolved. Over the past several months, my staff has met with your
    budget director, the NPS regional director in Alaska, your personal
    representative in Alaska, others on your staff, and anyone else who
    would listen about this case.
        On May 16 my staff was told that the case was just too complicated
    and no one knew what to do because the brothers were in bankruptcy. If
    your lawyers can't come up with a solution under existing law, I urge
    you to ask them to draft legislation that will resolve this matter.
        Question. Would you be willing to submit a recommendation to the
    Committee by July 1 which includes a fair appraisal process, so we may
    consider it in the fiscal year 1998 Interior bill?
        Answer. To the extent possible, the Department is interested in
    resolving the impasse that has been reached in our efforts to come to
    agreement with the owners of unpatented mining claims in Kantishna
    regarding the monetary value of their claims. Various ways of resolving
    this impasse include: (1) paying more than the appraised value of the
    claims, which is subject to Congressional review and approval; (2)
    having the courts decide what amounts constitute ``just compensation''
    for these properties through a declaration of taking; and (3) enacting
    a legislative taking. Attempts to alter the appraisal process are not
    needed.
        For the record, the Department would like to summarize the history
    of mining claims in Kantishna.
        There are currently two bankruptcies in Kantishna. In the case of
    the Gold King claims, the bankruptcy was filed two years prior to the
    1985 court injunction, at a time when plans of operation submitted by
    Kantishna miners received inadequate regulatory review and routine
    approval by NPS. This bankruptcy was filed after many years of mounting
    debts and unpaid creditors. The other bankruptcy was filed several
    years ago by an individual who had received title to substantial
    amounts of patented acreage and who showed no recent interest in
    mining.
        Very few miners have submitted plans of operation to mine in
    Kantishna. Of the plans submitted, most have been so incomplete as to
    not allow NPS to evaluate them under the provisions of the Mining in
    the Parks Act. To date, two plans have been approved and one plan has
    been disapproved.
        In 1983, an estimate of value of the Kantishna claims was prepared
    by DOWL Engineers/Plangraphics, Inc., under contract to the U.S. Bureau
    of Mines. This report has been reviewed and found to be highly flawed
    in its methodology and estimates. The purpose of the DOWL report was
    not an appraised fair market value, and therefore did not follow
    accepted mineral appraisal standards. The NPS has subsequently
    contracted with a mineral appraisal firm respected in the mining
    industry. Using actual market transactions as the basis of their
    determinations, we believe they have prepared realistic estimates of
    the fair market value of the claims appraised.
        Industry respected environmental firms have surveyed the Kantishna
    claims for hazardous materials contamination. These firms have also
    prepared estimates of the costs to cleanup any contamination
    identified. These estimated cleanup costs are what it would cost for a
    professional firm to conduct the cleanups under contract. Most
    contamination on the claims in Kantishna consists of petroleum spills.
    It is recognized by NPS and the claimants that cleanups could be done
    by the claimants themselves or by other non-professionals for
    substantially less than the costs estimated by the environmental firms.
    Some claimants have now partially remediated the contamination on their
    claims, and additional efforts are underway to complete the cleanups.
    The NPS has reduced the costs of cleanup by paying the owners to remove
    personal property, including old batteries, barrels of hazardous
    materials, and other potential contaminants. Additionally, NPS has
    removed substantial amounts of debris from the entire Kantishna Hills
    area, further reducing the contamination problems on the mining claims.
        The Gold King claims are currently subject to bankruptcy
    proceedings and pending litigation. The Department does not believe it
    is possible to legislate a solution to this situation.
                                     ______

                  Questions Submitted by Senator Thad Cochran
                         natchez national historic park
        It is my understanding that construction of the new visitor center
    at the Natchez National Historic Park will be completed during fiscal
    year 1998.
        Question. What additional operating costs will be required to
    support the National Park Service's (NPS) presence in this new
    facility?
        Answer. The amount that would be needed in fiscal year 1998 for a
    partial year is $121,000. The full year amount is $242,000.
        Question. Is this included in the President's Budget?
        Answer. The President's Budget contains numerous increases for park
    operations; however, at the time the budget was submitted to the
    Congress, this proposal was not included.
        Question. What additional staff requirements will exist for this
    new facility?
        Answer. The facility requires two FTEs.
        Question. Does the Park have sufficient FTE's to meet this need?
        Answer. The NPS has sufficient FTEs to meet this need; however, any
    FTE requirements are contingent on available funding.
        Question. Does the President's Budget include the allocation of
    these additional staff years?
        Answer. The President's Budget would provide two additional FTEs to
    the park, but for a different purpose.
        Question. What funds would be necessary to ensure adequate access
    by the physically challenged at the Park?
        Answer. Natchez National Historical Park has requested a study by
    National Center for Accessibility at the University of Indiana for a
    comprehensive Accessibility Plan. Until the study is complete, the
    amount of necessary funding is unknown.
        Question. Does the President's Budget include funds to do so?
        Answer. The President's Budget did not include such funding.
        Mr. Secretary, I know substantial funds are being spent on some
    big, expensive, new projects in Florida and California, and I hope our
    60 year effort to complete the Natchez Trace Parkway will not be
    forgotten or delayed in the excitement over these other initiatives.
        Question. What are the plans of this Administration for the
    completion of our historic and scenic Parkway?
        Answer. Good progress has been made in completing the Natchez
    Trace, and the Parkway is complete in the States of Tennessee and
    Alabama. At the present time, only 12 of 444 miles remain to be
    completed, about eight miles near Jackson, Mississippi, and about four
    miles near Natchez, Mississippi. The current construction estimate for
    completing these two sections is $62.1 million dollars. The financial
    scope of Parkway construction has made it difficult to accommodate it
    as a priority within the normal line item construction program for NPS.
    We are encouraged by the inclusion of a provision to give priority to
    completing legislatively mandated roadways such as the Natchez Trace in
    the Administration's proposed Federal Lands Highway Program section for
    the ISTEA reauthorization.
        There has been substantial interest over the last few years for the
    development of a trail to run alongside the Natchez Trace Parkway. The
    legislation which established the Parkway included this trail in its
    original plans.
        Question. What steps has NPS taken to establish this trail, as
    authorized?
        Answer. In 1994, Congress directed NPS to consider the need for a
    bicycle/mixed use trail within the Parkway's boundary in the Jackson,
    MS metropolitan area. However, the development of such a trail is
    conditional if such a trail could be included without significantly
    increasing the cost of Parkway construction.
        In response, NPS prepared and issued a Multi-Use Trail Study in
    1996, concluding that a 21 mile multi-use trail could be developed on
    Parkway lands from near Interstate-20 to a point along Ross Barnett
    Reservoir. This trail would be separate from the Parkway motor road and
    would seek to include provisions for linkages with other bicycle and
    similar trails that may be developed by the State, surrounding
    counties, or cities. The NPS identified the time-frame for construction
    of the multi-use trail as contingent upon appropriations and
    opportunities for partnerships with local governments, organizations,
    sponsors, and individuals.
        One such collaborative effort is nearing fruition. The NPS has been
    working since mid-1996 in a formal partnership with the City of
    Ridgeland, MS to design and construct, at no cost to NPS, the initial
    two mile segment of the multi-use trail with funding obtained by the
    City by virtue of an ISTEA grant. The enthusiasm the City of Ridgeland
    has shown in working with NPS to develop and maintain this segment of
    the multi-use trail demonstrates the level of involvement and
    commitment that are decisive in advancing this type of quality outdoor
    recreational opportunity for residents in the Jackson metropolitan
    area. The NPS plans to highlight the anticipated accomplishments from
    this partnership in an effort to stimulate similar local community-
    Parkway trail project collaboration, especially since this may afford
    additional ISTEA funding for trail construction pursuant to requests by
    local government.
        The initial two mile segment of the multi-use trail, which is about
    to be developed, corresponds with a substantial portion of the priority
    trail segment identified in the NPS 1996 Study. This segment was
    assigned its priority in order to resolve existing conflicts between
    heavy motor vehicle traffic and bicyclists sharing the Parkway motor
    road between Interstate-55 and Old Canton Road.
        Question. What studies have been conducted to ascertain whether a
    detached or attached trail would be most feasible, cost effective, and
    useful to potential users?
        Answer. In 1996, NPS addressed the question of augmenting the
    standard 22 foot paved width of the Parkway motor road with paved
    shoulders to accommodate bicycle and other recreational trail uses. The
    evaluations concluded that paving the roadway shoulders would
    constitute an inappropriate departure from the Parkway's design
    integrity and historic landscaped character. However, NPS also
    evaluated separate options related to a continuous multi-use trail, as
    well as a segmented multi-use trail. While both of these options are
    feasible, there are high costs associated with such construction.
        In the past, this Subcommittee has endorsed the construction of the
    trail as part of new parkway construction when feasible.
        Question. What construction has taken place in compliance with this
    report language?
        Answer. The NPS has been working to coordinate future construction
    funding requirements for the Parkway motor road with those for parallel
    portions of the proposed multi-use trail. The NPS has moved to
    incorporate the multi-use trail as part of the major unconstructed
    Parkway motor road bridges being planned for the Interstate-55 to
    Interstate-20 section of the Parkway by widening these structures to
    carry the trail adjacent to one side of the Parkway motor road. The
    portion of the proposed multi-use trail north of Interstate-55 cannot
    be included in corresponding Parkway motor road construction funding
    requests since this portion of the Parkway already exists. Separate
    funding plans would be necessary for this portion of the multi-use
    trail or the funding could be provided where local governments are
    willing to act as a sponsor, in collaboration with the NPS, in seeking
    alternative sources of funding.
                           fish and wildlife service
        Question. In relation to water resource development projects in the
    Lower Mississippi Valley, please summarize the specific role of the
    Fish and Wildlife Service (FWS) throughout the planning, coordination,
    draft proposal, and final proposal stages of the environmental,
    economic, and engineering documentation prior to project construction.
    Please list all official responsibilities, and specific authorization
    or mandates in the law to do so.
        Answer. The Fish and Wildlife Coordination Act (FWCA) authorizes
    FWS to provide assistance to, and cooperate with, Federal, State, and
    public and private agencies and organizations in development,
    protection, rearing and stocking of wildlife resources and their
    habitats. Under the FWCA, Federal agencies that construct, permit or
    license water resources development projects must consult with FWS
    regarding impacts to fish and wildlife resources, and to ensure that
    these resources receive equal consideration.
        The FWS is authorized to conduct surveys and investigations to
    determine possible impacts to fish and wildlife resources and to make
    recommendations to prevent the loss of, or damage to such wildlife
    resources. The FWS is currently involved in coordination on over 20
    Federal water projects in the lower Mississippi River Valley. These
    projects, planned and constructed by the Corps of Engineers, are in
    various phases of development, ranging from the reconnaissance stage to
    project construction.
        To the extent allowed by Federal construction agencies, FWS
    participates in the formulation and evaluation of project alternatives.
    Under the National Environmental Policy Act (NEPA), the lead agency
    develops an environmental assessment or an environmental impact
    statement disclosing the project's impacts to environmental resources.
    The FWS is usually requested to be a cooperating agency in the
    preparation of the documents. As part of the interagency coordination
    procedures, the FWS also reviews and comments on all project and NEPA
    documents.
        I am interested in the formal relationship between FWS and the
    Lower Mississippi River Conservation Committee (LMRCC).
        Question. Please outline the formal agreement between the two
    entities, the mission statement of the LMRCC, and the membership
    composition. Please provide the Committee with the routine function
    which FWS performs as a result of the formal arrangement with LMRCC,
    including a breakdown of any funds utilized from FWS for the operation
    of the Commission.
        Answer. The ``History and Proceedings of the First, Second, and
    Third Annual Meetings of the Lower Mississippi River Conservation
    Committee'' and the Cooperative Agreement between FWS and the LMRCC is
    provided separately. The FWS provides a full-time coordinator and part-
    time budget analyst to the LMRCC. The LMRCC is governed by an Executive
    Committee comprised of one representative from each of the following
    agencies: Arkansas Department of Pollution Control and Ecology,
    Arkansas Game and Fish Commission, Kentucky Department of Fish and
    Wildlife Resources, Louisiana Department of Environmental Quality,
    Louisiana Department of Wildlife and Fisheries, Missouri Department of
    Conservation, Missouri Department of Natural Resources, Tennessee
    Department of Environment and Conservation, and Tennessee Wildlife
    Resources Agency. The FWS provided $97,000 to the LMRCC for its
    operation. An additional $20,000 was also provided for the one time
    cost of the ``1996 LMRCC/USFWS Fisheries Management Plan Cooperative
    Agreement''.
        [Clerk's note.--Due to its volume, the above mentioned material is
    being retained in subcommittee files.]
     are all states throughout the lower mississippi river members of lmrcc
        It is the Committee's understanding that not all States throughout
    the Lower Mississippi River are members of LMRCC.
        Question. If this is so, could the agency please explain the
    background and reason on behalf of a lack of participation by any
    State. Please provide official documentation.
        Answer. The States of Arkansas, Kentucky, Louisiana, Missouri, and
    Tennessee are members of the LMRCC. The Mississippi Department of
    Wildlife, Fisheries and Parks and the Mississippi Department of
    Environmental Quality withdrew from the Committee on September 16,
    1996. Letters provided to Senator Cochran under separate cover outline
    the reasons for their withdrawal.
        [The letters follow:]
                             Letter From Sam Polles
                    Mississippi Department of Wildlife,
                                           Fisheries and Parks,
                                         Jackson, MS, January 11, 1996.
    Re MDWFP and LMRCC.

    Mr. Edwin Crowell,
    Chairman, Lower Mississippi River Conservation Committee,
    Vicksburg, MS.
        Dear Mr. Crowell:  The Mississippi Department of Wildlife,
    Fisheries and Parks (MDWFP) thanks you and Mr. Nassar for your visit
    with us on December 4, 1995, to discuss LMRCC policy and MDWFP's
    participation and contribution to LMRCC. We support your proposed
    amendment to LMRCC's constitution by the addition of item 5 requiring
    unanimous approval of the organization's positions on public works
    projects within member states. MDWFP appreciates the mutual
    acknowledgment of the importance and correctness of balancing economic
    and environmental issues, and we also value the opportunity to preview
    the newsletter prior to publication for controversial topics in order
    to allow us and other members a chance to offer views within the
    newsletter.
        Effective upon receipt of this letter, Mr. Gary Lucas, Fisheries
    Biologist, will not represent MDWFP on the LMRCC executive committee,
    Fisheries Technical Section, or as Secretary/Treasurer. This is a
    mutual decision between Mr. Lucas and MDWFP. Mr. Lucas is a valued
    employee and his abilities are recognized and needed on other
    assignments. The MDWFP will be represented on the Executive Committee
    by Mr. Wayne Watts, P.E., Environmental Affairs Director. Mr. Ron
    Garavelli, Fisheries Director, will represent MDWFP on the Fisheries
    Technical Section.
        We look forward to working with all members of the LMRCC to
    continue to improve the organization's role as a technical resource for
    identifying problems and solutions necessary to our environmental and
    economic well-being. If you have any questions or comments, please do
    not hesitate to contact us.
                Sincerely,
                                                    Sam Polles,
                                                    Executive director.
                                     ______

                Letter From James I. Palmer, Jr., and Sam Polles
                                  State of Mississippi,
                           Department of Environmental Quality,
                                         Jackson, MS, January 26, 1996.
    Mr. Edwin F. Crowell,
    Chairman, Lower Mississippi River Conservation Committee,
    Vicksburg, MS.
        Dear Mr. Crowell: Subsequent to our meetings with you and Mr.
    Nassar, we have evaluated the mission of the Lower Mississippi River
    Conservation Committee (LMRCC) and the State of Mississippi's role in
    this committee. We believe that the LMRCC can serve an important
    function as a mechanism for information exchange and cooperation among
    the states along the river. This would result in more efficient use of
    funds to protect and improve the fishery resource, conduct monitoring
    programs, and provide more effective protection of the water quality of
    the Mississippi River. However, we feel strongly that the LMRCC should
    not be a policy-forming organization. It would be difficult, if not
    impossible, for Executive Committee members to vote on policy
    resolutions regarding issues which their state may have to contend with
    in the regulatory arena.
        Another area of concern we have is the Cooperative Agreement
    between the U.S. Fish and Wildlife Service and LMRCC which established
    a full-time coordinator for LMRCC. We suggest that the LMRCC would be
    better served if the Fish and Wildlife Service would enter into an IPA
    agreement with a LMRCC member state agency and place the LMRCC
    coordinator in that agency, thereby making it clearer that the LMRCC is
    independent of the U.S. Fish and Wildlife Service.
        It is our belief that these changes would cause the organization to
    better serve the interests of all of the member states.
                Sincerely,
                                       J.I. Palmer, Jr., Director,
                                   Department of Environmental Quality.
                                       Sam Polles, Ph.D.,  Director,
                           Department of Wildlife, Fisheries and Parks.
                                     ______

                        Letter From James I. Palmer, Jr.
                                  State of Mississippi,
                           Department of Environmental Quality,
                                       Jackson, MS, September 16, 1996.
    Mr. Bennie J. Fontenot, Jr.,
    Chairman, Lower Mississippi River Conservation Committee,
    Vicksburg, MS.
        Dear Mr. Fontenot: We have delayed writing you in the hope that
    some additional discussions might be had among the leadership of the
    Lower Mississippi Conservation Committee to deal with concerns we
    raised at the beginning of the year regarding the focus and direction
    of the LMRCC. It appears that no further consideration of our concerns
    will be forthcoming, so we are writing to express to you our final
    sentiments in the matter.
        First, as we expressed to Ron Nassar when he met with
    representatives of our two agencies many months ago, the fundamental
    concept of the LMRCC is sound. While most of us are so strung out in
    our efforts to participate in a host of organizations and really do not
    need others to join, we recognize the reality that occasionally
    somebody does develop ``a better mouse trap,'' and we should be
    openminded to such possibilities. As a consortium of specialists in
    various fisheries and related fields which can then bring these skills
    to bear in a very focused way in various projects and initiatives
    throughout the Lower Mississippi region, the LMRCC has promise.
    Moreover, Ron stated his specific goal of having the LMRCC emerge as a
    ``consensus broker'' when particular projects or research efforts hit a
    snag and contentions arise. This, too, is a worthy ambition. The
    reality of the matter, however, is that when any group adopts a
    ``policy position'' in a contentious matter, the group automatically
    becomes an advocate for one position or another. This, in turn,
    generally means that others who do not agree with this particular
    position are automatically made adversaries to it. Thus, we see little
    hope for the LMRCC to simultaneously be both an advocate and a
    consensus broker.
        Additionally, the Department of Environmental Quality is
    responsible for handling Section 401 water quality certifications
    throughout Mississippi. Contested matters are elevated to our
    Commission on Environmental Quality for final disposition. Whenever a
    no-discharge or discharge NTPDES permit is associated with projects
    these matters must be handled by our Environmental Quality Permit
    Board, one statutory member of which is a representative of the
    Department of Wildlife, Fisheries and Parks. Neither the Department of
    Environmental Quality nor the Department of Wildlife, Fisheries and
    Parks can participate in an organization which adopts policy
    resolutions regarding particular projects (thus becoming, as we have
    said, an advocate) while simultaneously attempting to comply with
    federal and state ``arbitrary and capricious'' standards for final
    administrative decisions. Any policy position we would take would
    automatically, and probably conclusively. impeach our ultimate
    regulatory decision in such matters. We simply are not going to run
    such risks.
        Another concern we discussed with Ron personally is the perception
    that the U.S. Fish and Wildlife Service is ``officially'' the
    administrative leader of this effort. We well understand that Ron has
    been given substantial latitude in committing his time to the LMRCC and
    that he works hard to develop his role accordingly. However, this will
    be extremely difficult for him to do as long as he goes to work every
    day at his traditional U.S. Fish and Wildlife Service duty station and
    ``wears the uniform,'' as it were. We suggested that both the LMRCC and
    Ron would be much better served if the Fish and Wildlife Service would
    enter into an Intergovernmental Personnel Act (IPA) Agreement with the
    LMRCC so that Ron could be given appropriate ``detachment.''
    Unfortunately, we are advised that this particular concern of ours has
    received no attention.
        After we wrote you, the LMRCC Executive Committee considered our
    first concern at their annual meeting in February, but stopped short of
    a by-laws revision to remove the policy-forming function earlier
    embraced by the group. As mentioned, Ron remains in the lurch he has
    been in from the beginning. We strongly feel that these aspects of
    LMRCC structure and function are major impediments to its ultimate
    success and we have determined that our further affiliation with the
    organization cannot be productive in light of these unresolved
    concerns.
        With reluctance, we request that you remove the names of our
    respective agencies from your roster of members. If the LMRCC members
    decide to reshape their by-laws in the future to allow them to become
    what we believe the organization can truly be without shackling itself
    as it has, we will be happy to once again discuss with you possible
    membership.
                Sincerely,
                                       J.I. Palmer, Jr., Director,
                                   Department of Environmental Quality.
                                       Sam Polles, Ph.D.,  Director,
                           Department of Wildlife, Fisheries and Parks.

        Question. The Committee would like to know whether there have been
    any instances in the past, or if there are opportunities in the future
    for the agency, or agency personnel through formal arrangement such as
    the Lower Mississippi River Conservation Committee, to establish a
    position of advocacy or opposition to other Federal programs or
    projects which affect the human health, environmental, or general
    welfare of the people of the Lower Mississippi River Valley region.
    What safeguards or policies exist within the agency to ensure that
    third party relationships such as the LMRCC-FWS arrangement does not
    result in the agency becoming engaged in activities which are otherwise
    reserved for the National Environmental Policy Act process or the Fish
    and Wildlife Coordination Act process?
        Answer. There have been no instances in the past where FWS has
    advanced policy through a formal arrangement with an organization such
    as the LMRCC. The FWS believes that there are no opportunities for such
    an action to occur in the future. As outlined in the ``Resolution on
    Mississippi River Training Work'' which is provided to Senator Cochran
    under separate cover, the LMRCC did not establish a position of
    advocacy or opposition to any Federal program or project which affected
    the human health, environmental, or general welfare of the people of
    the Lower Mississippi Valley Region. However, the LMRCC did request in
    its resolution that its members be allowed to provide ``early and
    effective input,'' as provided by U. S. Army Corps of Engineers policy,
    into the project design in order that damages to the natural resources
    at risk could be minimized.
        Although FWS is a cooperator in the LMRCC, our participation is not
    increased in NEPA and FWCA processes. The FWS is not a voting member in
    the organization's operation. No safeguards or policies are necessary
    because the FWS, as legislatively authorized, routinely participates in
    NEPA and FWCA activities.
        [The information follows:]
                 Resolution on Mississippi River Training Work
        Whereas, the Mississippi River provides important habitat for a
    diverse assemblage of river-dependent species that provide important
    recreational and commercial opportunities; and
        Whereas, habitat provided in the river ecosystem is essential for
    the existence of the federally listed interior least tern (Sterna
    antillarum athalassos) and pallid sturgeon (Scaphirhynchus albus); and
        Whereas, The U.S. Army Corps of Engineers is charged with
    responsibilities for providing a navigation channel, flood control, and
    other river-focused societal benefits that can impact riverine habitat;
    and
        Whereas, river training structures, such as dikes and revetments,
    that are important in channeling the river into a usable navigation
    channel can potentially alter flow patterns and impact riverine
    habitat; and
        Whereas, the U.S. Army Corps of Engineers has provided for limited
    involvement of outside interests, including fish and wildlife
    interests, in planning for and implementation of their river training
    efforts; and
        Whereas, state fish and wildlife agencies from the states of
    Arkansas, Kentucky, Louisiana, Mississippi, Missouri, and Tennessee,
    which are represented on the Lower Mississippi River Conservation
    Committee, and our federal counterpart, the U.S. Fish and Wildlife
    Service, need to be actively involved in the planning of river training
    structures;
        Now, therefore, be it resolved that, the Lower Mississippi River
    Conservation Committee assembled at its annual meeting on January 25,
    1995 in Paducah, Kentucky urges the U.S. Army Corps of Engineers Lower
    Mississippi Valley Division and its St. Louis, Memphis, Vicksburg, and
    New Orleans District Offices to initiate measures that will provide for
    early and effective input from the state fish and wildlife agency
    members of the Lower Mississippi River Conservation Committee and the
    U.S. Fish and Wildlife Service to assure that consideration of the
    long-term effects of river training structures on riverine habitat are
    included in the planning process, that river training structures be
    designed to retain and enhance riverine habitats. and that the dynamics
    of the Mississippi River be retained wherever possible.
                             lmrcc-fws relationship
        Question. In your review of the matter, have there been any
    instances when the LMRCC-FWS relationship contributed to the perception
    that the agency was advancing, or participating in the advancement of
    policy, rather than performing the functions outlined in the joint
    agreement between LMRCC and FWS?
        Answer. The FWS periodically briefs the LMRCC in formal meetings
    when a request is made. The authority for the FWS to undertake this
    action is found in the Cooperative Agreement between FWS and the LMRCC.
    Our review of the guidelines of the Cooperative Agreement indicates
    that the relationship between FWS and the LMRCC has not fostered the
    perception that the agency was advancing or participating in the
    advancement of policy, rather than performing its mandated functions.
        Question. The Committee would like to request copies of any
    official publications, newsletters, correspondence, or other
    informational pieces which have been developed or distributed by FWS
    personnel as a result of the FWS agreement with LMRCC. It would be
    helpful if FWS would provide the Committee with these publications or
    newsletters since the formation of the LMRCC.
        Answer. The requested information is provided under separate cover
    to Senator Cochran.
        [Clerk's note.--Due to its volume, the above mentioned material is
    being retained in subcommittee files.]
                            yazoo basin, mississippi
        Question. The Committee is aware that FWS has demonstrated a keen
    interest in the Yazoo Basin, Mississippi projects, including but not
    limited to the Mississippi River Levee Enlargement Project, the Big
    Sunflower River Maintenance Project, and the Yazoo Backwater Project.
    Relative to these projects and the role of FWS in these activities, the
    Committee would like to submit the following questions.
        Answer. Under provisions of FWCA and NEPA, FWS has an interest in
    all water resource development projects throughout the entire Nation,
    not just those projects within the Yazoo Basin of Mississippi, that may
    have damaging effects to fish and wildlife resources. Our Mitigation
    Policy provides guidance in methods and alternatives to avoid, reduce,
    minimize, and/or compensate for damages to fish and wildlife resources
    adversely impacted by Federal projects.
        Question. Did a FWS staff person prepare, develop, and/or
    distribute the white paper relative to the Big Sunflower River
    Maintenance Project which was entitled, ``A Biological Tragedy in the
    Making: The Big Sunflower River, Mississippi?'' If so, what documents
    and data sources or scientific publications were used to develop this
    white paper? Was this white paper printed or distributed at the expense
    of the Federal Government? Further, is there any provision in the Fish
    and Wildlife Coordination Act or the NEPA process which encourages or
    discourages this type of information?
        Answer. The sources of information for the white paper entitled ``A
    Biological Tragedy in the Making: The Big Sunflower River,
    Mississippi'' were two documents produced by the Corps of Engineers'
    Waterways Experiment Station. These citations are:
        Hoover, J.J., and K.J. Killgore. 1993. Impacts of the Big Sunflower
    River maintenance project on fishes and fish habitat. Report prepared
    for U.S. Army Engineer District, Vicksburg. Waterways Experiment
    Station, Vicksburg, MS.
        Miller, A.C. and B.S. Payne. 1993. An analysis of freshwater
    mussels (Unionidae) in the Big Sunflower River, Mississippi: 1993
    studies. Report prepared for U.S. Army Engineer District, Vicksburg.
    Waterways Experiment Station, Vicksburg, MS.
        These documents were provided to the Endangered Species Committee
    of the American Fisheries Society (AFS) by the FWS Jackson, MS Field
    Office in response to a general request for information on threats to
    freshwater mussels in the Southeast. This committee is composed of
    academia and research scientists, including Federal biologists, from
    across the Nation. The FWS staff did not prepare or develop the white
    paper. Other than forwarding copies of the white paper that was
    received by the Jackson Field Office to others in the FWS for their
    information, the white paper was not distributed at Government expense.
        A primary role of FWS under both NEPA and FWCA is to provide
    biological review and information to Federal action agencies relative
    to specific Federal projects and their potential biological impacts.
    Because of its role in reviewing projects under FWCA and NEPA, FWS is
    often requested to provide the same or similar information to others,
    including research organizations, State agencies, nongovernmental
    organizations, and individuals. As a public agency, FWS feels obligated
    to respond to all legitimate requests for information by citizens of
    the United States, and neither NEPA or FWCA discourage this practice.
        Question. Has the agency strictly adhered to the policies of
    interagency coordination relating to the three projects listed above?
        Answer. The FWS has provided information about fish and wildlife
    resources as requested by the action agency, the local sponsor, and
    other interested parties.
        Question. Has the agency initiated meetings, communications, or any
    actions which affect the three Congressionally-authorized water
    resources projects mentioned above, without coordinating these
    activities with the local sponsor and/or the U.S. Army Corps of
    Engineers? If the answer is yes, please explain the justification for
    these actions and outline the specific provisions in FWCA and NEPA
    which support these actions?
        Answer. A primary role of FWS under both NEPA and FWCA is to
    provide biological review and recommendations to Federal action
    agencies relative to specific Federal projects and their potential
    biological impacts. Because of this role, FWS is often requested to
    provide its views to others, including research organizations, State
    agencies, nongovernmental organizations, and individuals. As a public
    agency, FWS feels obligated to respond to all public requests for
    information, and neither NEPA or FWCA discourage this practice. After
    extensive coordination with the Corps, FWS provided information on the
    status and potential impacts of the Mississippi River Levee Enlargement
    Project to various organizations in Mississippi, Louisiana, and
    Arkansas, as requested. The FWS coordinated its economic study of the
    Big Sunflower River Maintenance Project with the local sponsor and the
    Corps by providing them with copies of the contract and inviting them
    to meetings with the FWS contractor.
        Question. Has the agency coordinated its input and concerns
    relative to the three projects mentioned above with the local sponsor?
    When? In what way?
        Answer. The FWS has provided the Corps and local sponsor written
    responses at all stages of the scoping, planning, and construction
    where our input was requested. Coordination with the Corps and/or the
    local sponsor has varied depending upon where the project is in regard
    to planning and/or construction. For example, some work items for the
    Mississippi River Levee Enlargement projects are currently under
    construction, while other items are still in the planning stage. The
    Big Sunflower River Maintenance Project is in the late stages of
    planning and the Yazoo Backwater Project is in the early stage of
    planning. Less coordination has occurred between FWS and the local
    sponsor on the Yazoo Backwater Project because it is in the early
    planning stage. The FWS and the local sponsor have coordinated on
    numerous occasions since 1995 concerning the Big Sunflower and the
    Mississippi River Levee projects. The local sponsor met with the Region
    4 Regional Director, in October 1995, to discuss the Big Sunflower
    River maintenance project. The sponsor also reviewed our letter
    summarizing the FWS position on the project prior to the finalization
    of the FWS letter. Many meetings were held between FWS and the Corps
    where the local sponsors were present, to include the Corps' annual
    high water and low water trips on the Mississippi River.
        Question. Has the agency assisted the local sponsor in identifying,
    avoiding, or minimizing adverse environmental impacts associated with
    these three projects mentioned above? Provide the Committee with
    correspondence, communications, or other records which represent
    assistance or dialogue between the local sponsor and the agency?
        Answer. As directed by the FWCA, FWS has been primarily involved
    with the Corps in identifying potential avoidance and minimization of
    impacts to natural resources associated with these water resources
    projects. The local sponsors participated in many meetings between the
    Corps and the FWS.
        [Clerk's note.--Due to its volume, the above mentioned material is
    being retained in subcommittee files.]
               alternative to congressionally-authorized projects
        Question. Has the agency ever offered an alternative to the
    Congressionally-authorized projects which would require additional
    authorizations or in any way alter the existing Federal responsibility
    for the construction or maintenance of the three projects listed above?
        Answer. The FWS has the responsibility to investigate all flood
    damage alternatives in cooperation with the Federal construction
    agency. The FWS offered a nonstructural alternative to dredging of the
    Big Sunflower River. It is unclear to FWS whether or not nonstructural
    features for the Big Sunflower River Maintenance project would require
    additional authorization. The FWS is developing an essentially
    nonstructural alternative for flood damage control in the Yazoo
    Backwater project. This alternative plan has not been completed,
    therefore, whether further Congressional authorization is needed is not
    known.
        It is my understanding that FWS has commissioned an economic
    analysis of the U.S. Army Corps of Engineers project entitled the Big
    Sunflower River Maintenance Project.
        Question. Under what authority was this study commissioned?
        Answer. The FWS has the authority and responsibility under FWCA and
    the Fish and Wildlife Act of 1956 to address the impacts of Federal
    water development projects on fish and wildlife resources. The FWS
    staff has worked diligently with the Corps to avoid the impacts
    resulting from the proposed Big Sunflower River Maintenance Project.
    The viability of nonstructural alternatives that would reduce flood
    damages while protecting fish and wildlife resources is important to
    the FWS. For that reason, FWS decided to conduct a more in-depth
    investigation of economics of this nonstructural alternative. The
    results could be used in the review and analysis of future flood
    management projects to develop environmentally and economically sound
    projects.
        Question. From what appropriated account will this project be
    funded?
        Answer. Economic analyses are funded through appropriations made to
    the Resource Management account, under the General Administration
    activity.
        Question. Why does FWS commission economic analyses? Is this not
    the charge of the Corps of Engineers? Why is the Corps of Engineers
    analysis inadequate?
        Answer. The FWS commissioned this economic study for two reasons.
    First, we have a national interest in exploring the methods used to
    determine the value of property in less-than-fee acquisition
    situations. With increasing public interest in private property rights,
    we are investigating the feasibility of alternatives which could
    safeguard private property rights and meet conservation needs. Since
    there are numerous applications of less-than-fee acquisition
    methodology, FWS is interested in evaluating these methods to determine
    minimum, but equitable, costs for purchasing individual property
    rights. This information has application for protecting endangered
    species on private lands, migratory bird program enhancements, and
    refuge land acquisition. The Big Sunflower River Maintenance project is
    a good case study of this issue. Second, FWS supported a nonstructural
    method of flood damage reduction which would reduce damages while
    protecting fish and wildlife resources. Therefore, FWS decided to
    conduct a more in-depth investigation of its economics for use in
    evaluating future flood management projects.
        Question. Was the economic analysis conducted by the Corps done in
    a manner which was different that the analysis performed on the
    Tallahatchie River Maintenance Project? If not, why did FWS not perform
    an economic analysis of that project?
        Answer. In working toward conservation of fish and wildlife and
    other natural resources, FWS investigates any aspect of a water
    development project, including economics. The FWS concentrates its
    efforts on those projects where significant resources are at risk. This
    was not the case in the Tallahatchie River, and FWS did not object to
    the Tallahatchie River Maintenance project. Consequently, FWS did not
    closely examine the Corps' economic analysis of that project. The
    natural resources of the Big Sunflower River are more valuable, which
    warrants a closer examination of the viability of any alternative, such
    as the nonstructural alternative, which would provide a high degree of
    protection for those natural resources.
        Question. Does FWS have sufficient information at its disposal to
    assess duck populations and study the impacts of changes in hunting
    season frameworks? What additional funds would be necessary, and for
    what purpose, to meet these unmet needs, if any exist?
        Answer. The FWS predicts about a 25-percent increase in duck
    harvest in those States extending season dates seven to ten days longer
    than currently allowed. However, this prediction is based on experience
    in only two States--Iowa (1979-87, 1994-95) and Mississippi (1979-84).
    A more definitive assessment of harvest impact would require a large-
    scale regulatory experiment with adequate replication, experimental
    controls and randomization of treatments. Of more concern than adequate
    funding, is the question of whether a scientifically valid evaluation
    would be acceptable to the States, since about half of the States
    interested in framework extensions would have to agree to serve as
    experimental controls (i.e., no framework extensions) each year of the
    study. Moreover, there is a six to ten year timeframe for an adequate
    study and there could be no guarantee that the final results would
    support the use of framework extensions. Historically, it has been very
    hard to get broad-based agreement on an evaluation plan under these
    conditions.
        The Migratory Bird Treaty Act states that the open season on
    migratory birds is from September 1 to March 10. The Treaty also states
    that the Secretary of the Interior shall give due regard to ``temperate
    zones'' and ``times and lines of migratory flight'' in setting seasons.
        Question. Given this directive in the law, will a January 31
    closure, as recommended by the Lower Region Regulations Committee of
    the Mississippi Flyway Council, be listed for comment in the Federal
    Register? If not, why not?
        Answer. In the most recent Federal Register, FWS published the
    recommendations of the Mississippi and Central Flyways to extend
    framework dates beyond those currently used. The FWS also published a
    summary of all public comment received to date on the issue of
    framework dates. The FWS is not proposing to alter framework dates for
    the 1997-1998 season and is requesting further input from the Flyway
    Councils, States, and the public on a number of specific issues, such
    as potential for negative physiological impacts, possible changes in
    the size of the harvest, and reallocation of hunting opportunity within
    and among flyways. Comments will be accepted until June 27, 1997 and
    the final decision for the 1997-1998 hunting season will be published
    on or about July 15, 1997.
        The Administration's Budget proposes an increase of $1.8 million,
    or 12 percent, for the migratory bird management program to augment the
    FWS conservation and monitoring efforts for wild birds.
        Question. For what purpose will these additional funds be used?
    Please be specific, using FTEs and object classifications as
    appropriate.
        Answer. The President has proposed an increase of $1.5 million for
    the FWS migratory bird management program, specifically to enhance
    conservation and monitoring efforts for migratory birds at a region,
    national, and international scale. Of critical importance is monitoring
    and assessing the status of migratory bird populations to provide
    opportunities for recreational pursuits, such as bird-watching or
    hunting, and to ensure that significant declines in species are
    identified and reversed before reaching the status of threatened or
    endangered. A breakdown of this proposed funding initiative into
    specific project categories is as follows:
        Species of Management Concern (+$600,000): This increase would be
    used by FWS to focus on the highest priority monitoring and
    conservation actions. The FWS has primary responsibility for migratory
    nongame birds, and successful conservation of these species depends on
    reliable information on population status and trends.
        Goose Monitoring and Assessment (+$500,000): This increase would be
    used, in conjunction with ongoing Flyway efforts, to shift additional
    emphasis for goose management activities to key arctic and subarctic
    breeding areas, where information on status, habitat trends, and annual
    productivity has become increasingly important.
        Webless Species Monitoring and Assessment (+$150,000): The
    additional funds will be used, in conjunction with other initiatives
    such as the recently-created Webless Migratory Game Bird Research
    Program, to develop more reliable monitoring programs for various
    webless game bird species, and provide a better understanding of
    population dynamics and the role of different factors that influence
    population demographics and distribution.
        Sea Ducks, Mottled Ducks, and Whistling Ducks Monitoring and
    Assessment (+$80,000): This increase would improve estimates of
    population status and production through aerial and ground surveys of
    sea duck distribution and abundance, particularly in key breeding areas
    in arctic and subarctic regions of Alaska and northern Canada, and in
    migration and wintering areas along the Atlantic and Pacific coasts.
    This would also enable increased monitoring capabilities for mottled
    and whistling ducks on important nesting areas along the Gulf Coast.
        Harvest Information Program (+$170,000): This increase will help
    FWS to share ongoing Harvest Information program costs with the States
    in documenting the names and addresses of all licensed migratory bird
    hunters that are collected by the States, thus assuring the development
    of a more reliable and effective sampling frame for this critical
    survey.
        Waterfowl populations have made a significant recovery during the
    past several years, and this Administration has been quick to claim
    credit for this occurring. Favorable weather conditions and additional
    habitat in breeding, migration, and wintering areas have had a very
    positive impact on waterfowl populations. It is my understanding that
    because of these advances, seven of the 10 principal species of
    waterfowl surveyed are now above the goals specified in the North
    American Waterfowl Management Plan.
        On May 17, 1991, I received a letter from Thomas Dwyer, then the
    Chief of the Office of Migratory Bird Management, in response to a
    letter I submitted on behalf of a constituent concerning framework
    dates. Mr. Dwyer said the closing dates were advanced ``* * * in
    response to severe drought conditions on important duck breeding areas
    and low populations of most species.''
        Question. Now that these adverse conditions have subsided, please
    explain what conditions exist which would prevent a January 31 closing
    date.
        Answer. After a period of generally liberal hunting regulations
    during the 1970s and early 1980s, opening and closing framework dates
    (as well as season length and bag limit) were restricted during 1985-
    1993 due to declining duck populations. In 1992, framework dates were
    returned to roughly October 1 to January 20, which generally were those
    used prior to the restrictions. The FWS notes, however, that
    Mississippi had an experimental closing date of January 31 during 1979-
    84. The FWS believes that the question of appropriate framework dates
    now or in the future should not be predicated on current duck
    population status. Rather FWS has been working cooperatively with the
    Flyway Councils to develop an acceptable set of regulatory alternatives
    (i.e., specific combinations of season lengths, bag limits, and
    framework dates) and specific guidelines for their use (i.e., the
    process of adaptive harvest management). As with potential changes in
    season length and bag limit, changes to framework dates must be
    approached in a methodical and comprehensive manner, and with due
    consideration of both biological and sociological impacts. The FWS is
    not yet satisfied that all partners have had the opportunity to provide
    comments or are in agreement about the appropriate specification of
    framework dates.
        It is my understanding, through a letter from Acting Director John
    Rogers on August 2, 1996, that FWS, Flyway Councils, and States, that a
    comprehensive review of the regulatory alternatives has been conducted
    in preparation for the 1997 hunting season.
        Question. Please provide for the Committee a copy of this study,
    including the names of those involved in this review.
        Answer. Copies of the following are provided for the Committee: (1)
    a joint recommendation of all four Flyway Councils regarding
    development of regulatory alternative for ducks; (2) results of a mail
    survey of Flyway Council members regarding their opinions of duck
    hunting regulations; (3) a report from the adaptive-harvest-management
    technical working group, providing its recommendations for regulatory
    alternatives for ducks; and (4) a list of members of the technical
    working group.
        [Clerk's note.--Due to its volume, the above mentioned material is
    being retained in subcommittee files.]
                             harvest rates of ducks
        Question. Can the harvest rates of ducks accurately be measured?
    How?
        Answer. The annual harvests of ducks can be measured reliably
    through the FWS mail questionnaire and parts collection surveys. A
    sample of about 35,000 questionnaires each year provide an estimate of
    total duck harvest and about 100,000 wings sent in by hunters permit
    the harvest to be apportioned among species. The harvest rate, or that
    proportion of the fall-flight taken by hunters, can be estimated
    accurately only for mallards. The estimate of harvest rate is based on:
    (1) the proportion of banded birds shot and reported by hunters; and
    (2) the likelihood that a band encounter will be reported (referred to
    as the band-reporting rate). The band-reporting rate traditionally has
    been low (about 30 percent) and a program is underway to increase the
    rate. Because the band-reporting rate currently is changing, estimation
    of mallard harvest rates has become less reliable. A new study of band-
    reporting rates is planned for 1999 or 2000, after which reliable
    estimates of harvest rate again will be available.
        Question. Are there scientific articles which have been published
    which would corroborate not allowing a January 31 closure date,
    particularly at current population levels?
        Answer. Yes, there are several scientific publications which imply
    that the late-winter period may be critical to subsequent reproduction
    and survival by ducks and that delays in pair formation or disruption
    of pair bonds during this period could affect future reproduction.
    However, it is not clear how disruptive hunting in late-January would
    be to ducks. Publications which demonstrate the importance of pairing
    to ducks include:
        Heitmeyer, M. E. 1985. Wintering strategies of female mallards
    related to dynamics of lowland hardwood wetlands in the Upper
    Mississippi Delta. Ph.D. dissertation, University of Missouri,
    Columbia.
      --Hepp, G. R., and J. D. Hair. 1984. Dominance in wintering waterfowl
            (Anatini): effects on distribution of sexes. Condor 86:251-257.
      --Paulus, S. L. 1983. Dominance relations, resource use, and pairing
            chronology of gadwalls in winter. Auk 100:947-952.
      --Paulus, S. L. 1984. Activity budgets of nonbreeding gadwalls in
            Louisiana. Junior Wildlife Management 48:371-380.
        Question. Please provide a copy of the FWS Adaptive Harvest
    Management policy, including statistical formulas.
        Answer. Copies of the following are provided for the Committee: (1)
    its adaptive harvest management policy for the most recent hunting
    season; (2) a peer-reviewed article from a scientific journal that
    provides the complete mathematical and statistical description of
    adaptive harvest management for mallards; and (3) a journal article
    that provides a more general description of adaptive harvest
    management.
        [Clerk's note.--Due to its volume, the above mentioned material is
    being retained in subcommittee files.]
                maximize opportunity between and within flyways
        Question. If regulatory options can be adapted to maximize
    opportunity between flyways, why can't they be adapted to maximize
    opportunity within a flyway?
        Answer. Adaptive harvest management maximizes total harvest, while
    maintaining duck populations at or above the goals of the North
    American Waterfowl Management Plan. The allowable harvest is allocated
    among Flyways based on tradition extending back more than 40 years. In
    fact, the Flyway Councils have recommended that the allocation of
    harvests among Flyways should be maintained, at least in the short
    term. Decisions about how harvest should be allocated within a Flyway
    ultimately rest with the States involved. In the case of the
    Mississippi Flyway, at least two States (Minnesota and Wisconsin) are
    on record opposing a framework extension in southern States because it
    would further shift the distribution of duck harvest to the south.
    Northern States are mindful that the five southernmost States of the
    Mississippi Flyway collectively enjoy the highest hunter success of any
    region in the country. The FWS believes that allocation of harvest both
    among and within Flyways is a sensitive political issue that must be
    addressed in full consultation with all affected parties.
        The Land and Water Conservation Fund has provided $38.4 million to
    Mississippi since 1965. It is my understanding that under the law, 60
    percent of funds are to be allocated to States. Since 1988, States have
    received 10 percent or less. In the last two years, States have
    received no funds.
        Question. Why has funding not been allocated to the States during
    the last two years?
        Answer. During the past two fiscal years, no funds were
    appropriated by the Congress for the Land and Water Conservation Fund
    State grant program. Due to the lack of an appropriation, no funds were
    available to allocate to States.
        Question. How much does the Administration's Budget propose to
    allocate to States in fiscal year 1998?
        Answer. Because no funds have been appropriated for this program
    during the past two years, the Administration did not request funds for
    fiscal year 1998.
                                     ______

                Questions Submitted by Senator Pete V. Domenici
          level of funding for new mexico land acquisition priorities
        There are a number of projects within the purview of the Department
    of the Interior, primarily the National Park Service (NPS), which are
    nearing completion. For example, Congress has appropriated in excess of
    $20 million over the past seven years to acquire land from willing, and
    in some cases anxious, property owners within Petroglyph National
    Monument. Unofficially, NPS estimates that to complete land acquisition
    at the monument will require between $6 and $8 million. Other monuments
    and parks in New Mexico face similar needs, perhaps to a lesser extent,
    in order to complete initiatives that were begun some time ago. These
    include Aztec Ruins National Monument, Pecos National Monument, and
    several small initiatives within the Bureau of Land Management (BLM)
    that will consolidate land holdings in specified areas of concern.
        There are a number of Wilderness Study Areas on BLM land within New
    Mexico, where there are significant inholdings. Many in New Mexico
    would like to begin the process of developing a BLM wilderness bill to
    try to resolve this issue for some time into the future. I am
    concerned, however, that the record of the Department of the Interior
    in completing projects before moving on to a new ``priority'' will
    undoubtedly hinder this process.
        Question. When does the Department of the Interior foresee
    completion of acquiring inholdings within the National Monuments and
    Parks within New Mexico?
        Answer. Completion of acquisitions is contingent on the
    availability of funds. Though acquisitions in the New Mexico units are
    among the NPS priorities, the fiscal year 1998 budget request for the
    NPS land acquisition program includes no funds for acquisition in the
    New Mexico units. Identified future acquisitions in New Mexico units of
    the National Park System are as follows:

                                               ACQUISITIONS IN NEW MEXICO
                                                 [Dollars in thousands]
    ----------------------------------------------------------------------------------------------------------------
                                                                                                         Estimated
                                Park unit                                 Tracts           Acres           value
    ----------------------------------------------------------------------------------------------------------------
    Aztec Ruins NM..................................................              12              45          $1,000
    El Malpais NM...................................................              42           4,272           2,800
    El Morro NM.....................................................               2             239             234
    Pecos NHP.......................................................              37             442           2,501
    Petroglyph NM...................................................             120             709           8,000
    Salinas Pueblo Missions NM......................................               5               9              50
                                                                     -----------------------------------------------
          Totals....................................................             218           5,716          14,585
    ----------------------------------------------------------------------------------------------------------------

        Question. Will the Department of the Interior support additional
    land acquisition commitments within New Mexico before the completion of
    the current obligations for acquisition?
        Answer. The Department does not support additional funds for any
    program or project which would result in the reduction of funding for
    priority programs included in the budget request. However, in general,
    completion of identified existing projects have priority over new
    projects. However, flexibility to respond to unique acquisition
    opportunities should be maintained, particularly for those projects
    that are time sensitive, and where the opportunity to acquire lands
    with significant resource/recreation values may be available and lands
    are under the threat of development.
        department of the interior--funding for the southwest fisheries
                               technology center
        The Southwest Fisheries Technology Center (SFTC) has received the
    support of this Subcommittee since 1993 as one of the highest
    priorities within Region 2 of the Fish and Wildlife Service (FWS), and
    to date Congress has appropriated $20 million for construction of
    facilities at Dexter and Mora in New Mexico. When completed, the SFTC
    will be the only facility in the Nation dedicated exclusively to the
    breeding and stocking of native, threatened, and endangered fish.
    Approximately $6 million is needed to complete construction and provide
    funding for the two units of the SFTC to become operational.
        Question. Why has this Administration not requested funding to
    complete construction at the SFTC in any of the last five years?
        Answer. In fact, the fiscal year 1997 President's Budget requested
    $3.7 million for the Southwest Fisheries Tech Center.
        Ongoing priorities have included health and safety construction
    projects and completion of the National Conservation and Training
    Center. For fiscal year 1998, the President's Budget has focused on
    backlog reductions, including for example a request for construction
    funding totaling $22.2 million for the highest priority infrastructure
    backlog needs including the rehabilitation of roads, dams, and bridges
    in the National Wildlife Refuge system and $5.3 million for
    rehabilitation projects in the National Fish Hatchery system.
        Question. Does the Department support the completion of
    construction, and subsequent staffing and operation of the SFTC?
        Answer. Each construction project has to be considered relative to
    program priorities, especially the health and safety of our employees
    and the public.
        Question. Does the Department ever plan to request adequate funding
    for operation of the SFTC?
        Answer. The Department will reevaluate the project in future
    budgets against all other priorities.
              department of the interior--payment in lieu of taxes
        Under section 1033 of the Omnibus Parks and Public Lands Management
    Act of 1996, the Department of the Interior is authorized to recognize
    boroughs and other subdivisions as units of local government for the
    purposes of the Payment in Lieu of Taxes (PILT) program. This has added
    an additional obligation of $6.5 million under this program, yet the
    Administration has requested a reduction of $12 million in this program
    that is vitally important for local governments to provide services in
    those areas where local tax base is limited by the presence of Federal
    land. This level of funding is below that appropriated in fiscal year
    1994, before Congress authorized an increase in the program.
        Question. Does the Administration believe that the needs of local
    governments are less than they were in fiscal year 1994?
        Answer. No, the Administration does not believe that the needs of
    local governments are less than they were in fiscal year 1994.
        Question. How does the Department intend to makeup for the
    shortfall in services, such as search and rescue, law enforcement, and
    road maintenance, currently provided by local governments in those
    areas dominated by Federal lands?
        Answer. The BLM 1998 budget proposal for PILT is the same as the
    Administration's proposal for 1997. In 1997, Congress appropriated an
    additional $12 million above the President's Budget
        Distribution of PILT payments is determined by several codified
    formulas and is designed to supplement other Federal land revenue
    sharing payments that county governments receive. Historic funding
    levels for PILT between 1977 and 1995 have been level, fluctuating only
    between $100 and $105 million. A 1994 amendment changed the methodology
    for calculating PILT payments but did not provide a new funding source.
        Funding for all PILT payments is provided via BLM appropriations.
    The BLM makes PILT payments for lands managed by BLM, NPS, the U.S.
    Forest Service, Corps of Engineers, and U.S. Army. Current payment
    formulas (as a result of the 1994 amendment) authorize an appropriation
    of up to $194 million for the 1998 payments. Congress has never
    appropriated this full amount.
                      water resources research institutes
        Dr. Eaton, one of the participants in the preliminary work to study
    the water resources of New Mexico's largest city--Albuquerque--was at
    the New Mexico Water Resources Research Institute headquartered at New
    Mexico State University. I have been familiar with the work of the
    Institute for years, and its scientists have made significant
    contributions to the State and to the Nation. The Administration
    proposes to phase out the State Water Resources Research Institutes,
    and essentially redirect its funding to the Federal program. In other
    words, the support the U.S. Geological Survey (USGS) has been providing
    through a long-standing partnership with the State Research Institutes
    is proposed to be terminated, and the work shifted in-house to USGS.
        Question. How does this proposed shift of research in-house fit in
    with the Administration's initiatives to foster partnerships in
    research?
        Answer. In a constrained budget climate, the Administration regrets
    the need to reduce funds to this program in favor of activities that
    more directly support the USGS mission. Nonetheless, the State Water
    Institutes, which receive grants under the Water Resources Research Act
    Program, will continue to receive Federal grant funds in fiscal year
    1998 at a reduced level. Also, the USGS student internship program
    begun in fiscal year 1996 in concert with the Water Institutes will
    continue providing many opportunities for fostering partnerships in
    research and education.
        New Mexico's Water Resources Research Institute will receive
    approximately $80,000 in fiscal year 1995, but these funds will
    leverage contributions from the State Legislature by as much as five
    times this amount because of the critical work being performed.
        Question. What is a realistic estimate of the lost resources to
    this important research that is likely to occur if the Administration's
    proposal is enacted?
        Answer. Although the Water Resources Research Act Program has been
    highly successful in past years, the fiscal year 1998 Budget includes
    $1.75 million for Water Resources Research Institutes, a reduction of
    $2.8 million. At this level of funding, equal grants will be awarded to
    each of the 54 institutes, thereby reducing the administrative cost.
    Predicting the impact of the proposed funding reduction on matching
    funds for individual Institutes is difficult, but the average Federal
    grant to each Institute in fiscal year 1998 under the President's
    proposed budget would be about $30,000. Currently, average leveraging
    of non-Federal to Federal dollars for the 54 Institutes exceeds 10 to
    1, far in excess of their Federal direct appropriation and associated 2
    to 1 matching funds. However, about one-third of the Institutes receive
    all or most of their funding from this Federal appropriation and
    associated matching funds, so that this action may result in the
    closure of some Institutes.
        One of the benefits of the current partnership with the State
    Institutes is that these programs train new researchers in earth
    sciences.
        Question. Does USGS have the capability to make up for this aspect
    of the proposed elimination of State Institutes?
        Answer. The proposed decrease in Institutes Program funding would
    not directly affect funds available for the USGS Water Resources
    Research Institute Internship program, which was established in fiscal
    year 1996 in concert with the Water Institutes. This program is a means
    of providing undergraduate and graduate students with career-enhancing
    field, laboratory, and research experience through participation in
    USGS activities as interns. Funds to support the interns are derived
    from other USGS projects or programs that desire to support student
    interns as part of the mix of efforts required to carry out program or
    project activities. These funds are consolidated and awarded under
    grants to Institutes participating in the internship program. The
    Institutes use these grant funds to employ students competitively
    selected from among applicants at colleges and universities across the
    country. The students are assigned USGS mentors on projects and
    programs providing the funds to support the Internships. In fiscal year
    1996 the USGS committed a total of $345,000 to the Internship program
    in six States. The combination of classroom work, coupled with on-the-
    job training is excellent preparation for future water managers, water
    scientists, and technicians alike. It also assists USGS by providing a
    source of student help. Because of the success of this partnership, we
    expect it to grow significantly in the future.
        Question. How would you assess the research productivity of the
    State Institutes with that of USGS overall? Has such an assessment been
    undertaken as the Administration has considered this budget proposal?
        Answer. The State Water Institutes Program, with its non-Federal
    matching requirement, is an efficient means of stimulating and
    supporting water resources research, education, and information and
    technology transfer directed towards State and local water management
    problems. However, the Institutes Program cannot substitute for
    internal USGS functions that require a broad scale, long-term,
    nationally consistent approach. Functions such as collection and
    dissemination of streamflow data and the rapid response of USGS to
    flood emergencies could not be carried out by the Institutes.
    Similarly, a national assessment of water quality could not be
    conducted by the Institutes. The Administration recognizes that,
    although the Institutes Program provides excellent research and
    products, it does not contribute as directly to USGS mission
    activities.
        The New Mexico Water Resources Research Institute has been a major
    contributor to resource issues in the State and nationally. Some of the
    most recent examples of the Institute's work in New Mexico include:
      --Heading the Water Resources Task Force of the Governor's Technical
            Excellence Committee, which developed the concept and needs
            statement for the ``Critical Basin Assessments'' in New Mexico.
            This program recommended that the Albuquerque/Middle Rio Grande
            Basin be the first to be studied;
      --Organizing the Water Conference in Albuquerque last fall in which
            you participated;
      --Contributing to a regional planning process to focus on developing
            a more reliable municipal water supply for southern New Mexico
            and El Paso; and
      --Working with WERC, Los Alamos, and Sandia to develop a proposal for
            a major water resources initiative for New Mexico.
                                     ______

                  Questions Submitted by Senator Conrad Burns
                          national park service (nps)
        Question. Mr. Secretary, could you provide the Committee with
    additional information on what the current backlog of construction and/
    or repair projects is in our Nation's national parks? I would like to
    see this broken down by both region and per park level.
        Answer. The information follows:

                                                          RECAPITALIZATION OF THE NATIONAL PARK SYSTEM
                                        [Preliminary list of unfunded capital construction needs, alphabetically by park]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Gross
                         Park                                  Project title               construction     Package        Reg.      Objective    Work type
                                                                                             estimate        number
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Acadia National Park.........................  Upgrade restrooms, water, sewer,            5,750,000          232          NAR            1            U
                                                    power.
    Acadia NP....................................  Rehabilitate historic structures.....       8,500,000          320          NAR            2            B
    Acadia NP....................................  Rehabilitate tour loop roads and           24,000,000          287          NAR            2            R
                                                    bridges.
    Acadia NP....................................  Replace visitor center and construct       16,560,000          233          NAR            4            B
                                                    park entrance.
    Acadia NP....................................  Improve McFarland Hill Headquarters..       9,960,000          234          NAR            3            B
    Acadia NP....................................  Alternative transportation modes.....       1,320,000         2006          NAR            5            R
    Adams National Historic Site.................  Rehabilitate Beale Estate............       2,020,000          108          NAR            2            B
    Agate Fossil Beds National Monument..........  Construct employee housing and              1,950,000          198          MWR            5            H
                                                    recreation facilities.
    Alaska parks (multiple)......................  Rehabilitate historic/building New          3,960,000          135          AKR            2            B
                                                    Backcountry cabins.
    AlibateS Flint Quarry NM.....................  Construct visitor contact station....       4,320,000          105          SWR            4            B
    Allegheny Portage National Historic Site.....  Staple Bend Tunnel stabilization/           3,000,000          225          MAR            3            R
                                                    development.
    Allegheny Portage National Historic Site.....  ALPO/JOFL Development Program........      11,760,000          226          MAR            5            L
    Amistad National Recreation Area.............  Construct visitor contact stations          3,000,000          117          SWR            5            B
                                                    and boat launch.
    Amistad NRA..................................  Reconstruct roads....................       2,640,000          180          SWR            3            R
    Antietam National Battlefield................  Stabilize/restore historic battle           2,400,000          315          NCR            2            B
                                                    structures.
    Antietam NB..................................  Construct new roads for scene               2,886,000          271          NCR            2            R
                                                    restoration.
    Apostle Islands National Lakeshore...........  Protect lightstation from shoreline         4,642,400          839          MWR            2            L
                                                    erosion.
    Apostle Islands NL...........................  Renovate employee quarters in               1,440,000          248          MWR            3            H
                                                    historic lightstations.
    Arkansas Post NM.............................  Construct maintenance/storage               1,200,000          116          SWR            5            B
                                                    facility.
    Assateague Island National Seashore..........  Rehabilitate historic structures/           9,000,000          263          MAR            2            L
                                                    stabilize national resources.
    Assateague NS................................  Reconstruct roads and parking, MD and       6,600,000          231          MAR            3            R
                                                    VA.
    Assateague NS................................  Redevelop parking--chnctg............       3,432,000          233          MAR            3            R
    Aztec Ruins NM...............................  Construct administrative ctr./              4,680,000          133          SWR            5            B
                                                    operations complex.
    Badlands NP..................................  Rehabilitate 30 miles of main road...      24,156,000          120          RMR            3            R
    Baltimore-Washington Memorial Parkway........  System completion project............      31,680,000         1006          NCR            5            R
    Bandelier NM.................................  Relocate facilities from Frijoles          15,700,000          214          SWR            2            B
                                                    Canyon.
    Bandelier NM.................................  Rehabilitate Ponderosa Campground....       1,320,000          109          SWR            3            L
    Bandelier NM.................................  Rehabilitate trails..................       3,600,000          210          SWR            2            L
    Bandelier NM.................................  Construct water storage and                   840,000          246          SWR            3            U
                                                    distribution.
    Bering Land Bridge National Preserve.........  Construct multiagency visitor center.       5,564,000        100NO          AKR            4            B
    Big Bend NP..................................  Rehabilitate Chisos Basin Campground.       3,200,000          274          SWR            3            L
    Big Bend NP..................................  Reconstruct major park roads.........      19,008,000          223          SWR            3            R
    Big Bend NP..................................  Construct addition to park visitor         10,680,000          114          SWR            5            B
                                                    center.
    Big Bend NP..................................  Modernize/expand Panther Junction           3,200,000          132          SWR            1            U
                                                    water system.
    Big Bend NP..................................  Relocate overhead utility lines......       4,200,000          169          SWR            3            U
    Big Bend NP..................................  Improve/expand Panther Junction             2,400,000          160          SWR            3            B
                                                    maintenance area.
    Big Bend NP..................................  Rehabilitate/expand campgrounds (RGV-       2,400,000          166          SWR            3            L
                                                    CA).
    Big Bend NP..................................  Construct resource management               2,400,000          276          SWR            5            B
                                                    facility.
    Big Bend NP..................................  Rehabilitate and expand sewage              3,200,000          278          SWR            1            U
                                                    treatment.
    Big Cypress Nat Preserve.....................  Scenic corridor visitor safety hwy.         4,800,000            1          SER            1            R
                                                    improvements.
    Big Cypress NPRes............................  ADditional lands operation facility..       1,720,000            2          SER            4            B
    Big Thicket NPRes............................  Construct park visitor center/              8,280,000          107          SWR            4            B
                                                    headquarters.
    Big Thicket NPRes............................  Construct trails, trailheads, water        13,200,000          111          SWR            2            L
                                                    access.
    Big Thicket NPRes............................  Stabilize roads......................       2,112,000          113          SWR            3            R
    Bighorn Canyon NRA...........................  Provide safe recreation area at OK-A-         254,400          222          RMR            3            L
                                                    BEH.
    Blackstone River Valley NHCC.................  Rehabilitate Slater's Mill Historic         5,400,000          105          NAR            2            B
                                                    Structures and Site.
    Blue Ridge Parkway...........................  Fisher Peak Mountain Music Center....       4,000,000          507          SER            5            B
    Blue Ridge Parkway...........................  Tunnels-lined........................       6,204,000          132          SER            3            R
    Blue Ridge Parkway...........................  Grade separations....................       3,564,000          521          SER            3            R
    Blue Ridge Parkway...........................  Resurface 25 miles of parkway........      87,912,000          503          SER            3            R
    Booker T. Washington NM......................  Construct maintenance. shop and             1,822,800          161          MAR            5            B
                                                    expand visitor center.
    Boston Afro-American NHS.....................  Complete rehabilitation of Smith            1,175,000          102          NAR            2            B
                                                    School.
    Boston Nat Historic Park.....................  Charlestown Navy Yard road safety           3,630,000          154          NAR            1            R
                                                    improvements.
    Boston NHP...................................  Rehabilitate Bunker Hill structure            859,200          106          NAR            2            L
                                                    and site.
    Boston NHP...................................  Preserve/rehabilitate historic              4,800,000          130          NAR            2            B
                                                    commandant's house.
    Bryce Canyon NP..............................  Reconstruct roads parkwide...........      25,080,000          106          RMR            3            R
    Bryce Canyon NP..............................  Rehabilitate 206 camping sites in           1,700,000          103          RMR            3            L
                                                    park.
    Bryce Canyon NP..............................  Rehabilitate visitor and education          4,400,000          125          RMR            3            B
                                                    center.
    Buffalo National River.......................  Construct Tyler Bend employee housing       2,760,000          109          SWR            4            H
    Buffalo NR...................................  Improve river camp sites, launches,        12,360,000          185          SWR            4            L
                                                    and roads.
    Buffalo NR...................................  Construct park headquarters and             5,520,000          240          SWR            4            B
                                                    visitor center.
    Buffalo NR...................................  Develop Pruitt public use/operations        1,800,000          113          SWR            4            B
                                                    facilities.
    C&O Canal NHP................................  Restore historic Monocacy aqueduct...       8,000,000          100          NCR            2            L
    C&O Canal NHP................................  Reconstruct historic wide-water               630,000           01          NCR            1            L
                                                    towpath.
    C&O Canal NHP................................  Rehabilitate deteriorating historic           660,000          101          NCR            2            B
                                                    complex.
    C&O Canal NHP................................  Restore deteriorated historic               1,800,000           29          NCR            2            B
                                                    tidelock.
    C&O CANAL NHP................................  GREAT FALLS ENTRANCE STATION ROAD....         660,000           77          NCR            3            R
    CANAVERAL NS.................................  CONSTRUCT HQ, VC, STORAGE, and              4,207,200          105          SER            5            B
                                                    EXHIBIT COMPLEX.
    CANYON DE CHELLY NM..........................  REHABILITATE CANYON ROADS............       1,200,000          172          SWR            3            R
    CANYON DE CHELLY NM..........................  REHABILITATE PARK ROADS..............       1,980,000          169          SWR            3            R
    CANYONLANDS NP...............................  REPAIR 225.4 MILES ROAD..............      16,368,000          183          RMR            3            R
    CAPE COD NS..................................  REHABILITATE EIGHT BEACH FACILITIES..       9,100,000          226          NAR            1            B
    CAPE COD NS..................................  REHABILITATE DORMITORY AND SEASONAL        11,850,000          225          NAR            1            H
                                                    HOUSING UNITS.
    CAPE COD NS..................................  REHABILITATE SALT POND AND                  4,896,000          228          NAR            2            B
                                                    PROVINCELAND VISITOR CENTER.
    CAPE COD NS..................................  REHABILITATE PARK ROADS AND PARKING..       2,640,000          210          NAR            3            R
    CAPE HATTERAS NS.............................  REPAIR/REPLACE EMPLOYEE HOUSING......       8,400,000          801          SER            3            H
    CAPE HATTERAS NS.............................  CONSTRUCT PROTECTIVE GROIN...........       2,000,000          301          SER            2            L
    CAPE HATTERAS NS.............................  RELOCATE LIGHTHOUSE..................      10,530,000          175          SER            2            L
    CAPULIN VOLCANO NM...........................  EXPAND/IMPROVE MAINTENANCE AREA......       1,800,000          154          SWR            5            B
    CARLSBAD CAVERNS NP..........................  REHABILITATE/REPLACE ELEVATOR SHAFT         2,000,000          198          SWR            1            B
                                                    STEEL.
    CARLSBAD CAVERNS NP..........................  PROVIDE CAVE HANDRAIL................       1,200,000          199          SWR            1            L
    CARLSBAD CAVERNS NP..........................  REPLACE WATER TRANSMISSION and              3,600,000          191          SWR            3            U
                                                    STORAGE.
    CARLSBAD CAVERNS NP..........................  RESURFACE ENTRANCE ROAD AND PARKING..         660,000          180          SWR            3            R
    CASTLE CLINTON NM............................  REHABILITATE CASTLE CLINTON NATIONAL       26,040,000          105          NAR            5            B
                                                    HISTORIC SITE.
    CATOCTIN MOUNTAINS PARK......................  REPLACE FAILING ELECTRICAL SYSTEM....         721,810          989          NCR            3            U
    CEDAR BREAKS NM..............................  RECONSTRUCT PARK ROADS...............       3,036,000          114          RMR            3            R
    CHACO CULTURE NHP............................  CONSTRUCT HOUSING, CAMPGROUND, WATER/      11,040,000          204          SWR            5            B
                                                    SEWER SYS.
    CHACO CULTURE NHP............................  CONSTRUCT ADDITION TO MAINTENANCE             840,000          207          SWR            5            B
                                                    SHOP.
    CHANNEL ISLANDS NP...........................  CONSTRUCT 8 EMPLOYEE HOUSES AT SANTA        3,458,400          671          WER            4            H
                                                    ROSA.
    CHATTAHOOCHEE NRA............................  CONSTRUCT DAY USE FACILITIES, TRAILS,       3,885,600          101          SER            5            B
                                                    COMFORT STATION.
    CHICKAMAUGA and CHATTANOOGA..................  RELOCATE US HWY 27 WITHIN PARK (GA)..      30,360,000          142          SER            3            R
    CHICKAMAUGA and CHATTANOOGA..................  IMPROVE PARK ROADS, SHOULDERS, and          6,732,000          102          SER            3            R
                                                    DRIVEOUTS.
    CHICKAMUAGA and CHATTANOOGA..................  REPLACE TWO BRIDGES-ALEXANDER BRIDGE        2,196,000          165          SER            1            R
                                                    ROAD.
    CHICKASAW NRA................................  IMPROVE CAMPGROUNDS..................      11,540,000          215          SWR            3            L
    CHICKASAW NRA................................  CONSTRUCT VISITOR CTR./HEADQTRS./           4,560,000          208          SWR            5            B
                                                    MTNCE. COMPLEX.
    CHICKASAW NRA................................  DEVELOP VETERANS LAKE VISITOR               2,400,000          209          SWR            5            R
                                                    FACILITIES.
    CHICKASAW NRA................................  REHABILITATE VETERANS DAM (REPAY BUR.         600,000          206          SWR            3            L
                                                    OF RECLAMATION).
    CHIRICAHUA NM................................  UPGRADE UTILITIES, HEADQUARTERS, and        1,200,000          241          SWR            3            B
                                                    CAMPGROUND.
    CHIRICAHUA NM................................  REHABILITATE MAIN PARK ROAD..........       9,372,000          103          WER            3            R
    CITY OF ROCKS NM.............................  CONSTRUCT RV CAMPGROUND, ROADS,            23,160,000          101          PNR            2            B
                                                    TRAILS, RESTROOMS.
    COLONIAL NHP.................................  CONNECT JAMESTOWN WATER SYSTEM TO             959,000          400          MAR            1            U
                                                    MUNICIPAL SYSTEM.
    COLONIAL NHP.................................  PROTECT JAMESTOWN ISLAND FROM EROSION      18,000,000          248          MAR            2            L
    COLONIAL NHP.................................  CONSTRUCT JAMESTOWN VIS. CTR. and          14,040,000          154          MAR            5            L
                                                    COLLECTION STORAGE.
    COLONIAL NHP.................................  BUILD COLONIAL PARKWAY BICYCLE and         24,000,000          249          MAR            5            L
                                                    WALKING TRAIL.
    COLONIAL NHP.................................  REALIGN PARK PORTION OF HIGHWAY 238..       3,699,600          127          MAR            5            R
    COLONIAL NHP.................................  YORKTOWN ROADS AND BRIDGES...........       4,752,000          317          MAR            3            R
    COLONIAL NHP.................................  REHABILITATE JAMESTOWN ROADS.........       1,320,000          321          MAR            3            R
    COLONIAL NHP.................................  REPAIR/REHABILITATE COLONIAL PARKWAY.      13,200,000          251          MAR            3            R
    COLORADO NM..................................  REHABILITATE 23 MILES OF RIMROCK            7,920,000          110          RMR            3            R
                                                    DRIVE.
    CONGAREE SWAMP NM............................  CONSTRUCT PERMANENT FACILITIES.......       9,000,000          101          SER            4            B
    COULEE DAM NRA...............................  EXPAND KELLER FERRY CAMPGROUND              2,400,000          203          PNR            5            B
                                                    FACILITIES.
    COULEE DAM NRA...............................  RESURFACE ROADS AND PARKING--PARKWIDE       2,040,000          266          PNR            1            R
    COULEE DAM NRA...............................  RESURFACE ROADS AND PARKING..........       1,716,000          266          PNR            1            R
    CRATER LAKE NP...............................  CONTRUCT ACTIVITY CENTER, PARKING,         60,000,000          274          PNR            2            B
                                                    AND ROADS.
    CRATER LAKE NP...............................  CONSTRUCT EMPLOYEE HOUSING AND              5,800,000          275          PNR            5            H
                                                    SUPPORT FACILITIES.
    CRATER LAKE NP...............................  CORRECT CLEETWOOD COVE PARKING              1,000,000          276          PNR            1            R
                                                    FACILITIES.
    CRATER LAKE NP...............................  RESURFACE ANNIE SPRINGS TO WEST             5,544,000          235          PNR            1            R
                                                    BOUNDARY ROAD.
    CRATER LAKE NP...............................  RESURFACE 6.1 MILES OF ROUTE 7--            1,452,000          253          PNR            1            R
                                                    PINNACLES ROAD.
    CRATER LAKE NP...............................  RESURFACE CLOUDCAP TO HEADQUARTERS          3,960,000          256          PNR            1            R
                                                    ROAD.
    CRATERS OF THE MOON NM.......................  CONSTRUCT VISITOR CENTER, ROADS, AND        5,400,000          153          PNR            5            B
                                                    UTILITIES.
    CUMBERLAND GAP NHP...........................  SYSTEM COMPLETION PROJECT............      47,520,000         1007          SER            5            R
    CUMBERLAND ISLAND NS.........................  CONSTRUCT VISITOR CENTER, EXHIBITS,         3,494,400          112          SER            5            B
                                                    UTILITIES, MTNCE. FACILITIES.
    CURECANTI NRA................................  REPLACE WATER TREATMENT PLANT AND ADD       1,729,200          272          RMR            3            U
                                                    RESERVOIR.
    CUYAHOGA NRA.................................  RECONSTRUCT RIVER VIEW RD............       1,320,000          203          MWR            3            R
    CUYAHOGA NRA.................................  RECONSTRUCT WHEATLEY ROAD............       1,848,000          206          MWR            3            R
    CUYAHOGA VALLEY NRA..........................  CONTINUE CLEANUP OF KREJCI DUMP SITE.       5,400,000          260          MWR            1            L
    DAYTON AVIATION HERITAGE NHS.................  REHABILITATE HISTORIC HOOVER BLOCK...       4,941,600          100          MWR            2            B
    DEATH VALLEY NP..............................  CONSTRUCT EMPLOYEE HOUSING AT DEATH        19,807,200          388          WER            1            H
                                                    VALLEY.
    DEATH VALLEY NP..............................  REPLACE COW CREEK MAINTENANCE               5,187,600          500          WER            1            B
                                                    FACILITY.
    DEATH VALLEY NP..............................  REHABILITATE BADWATER ROAD and SPUR        14,916,000          283          WER            3            R
                                                    ROADS.
    DEATH VALLEY NP..............................  RECONSTRUCT ROUTES 8 and 35..........      19,932,000          105          WER            3            R
    DEATH VALLEY NP..............................  SURFACE 7 MILES OF N ENTRANCE ROAD--        1,848,000          257          WER            5            R
                                                    ROUTE 8.
    DEATH VALLEY NP..............................  REHABILITATE MUD CANYON and DAYLIGHT       12,144,000          348          WER            3            R
                                                    PASS ROADS.
    DEATH VALLEY NP..............................  RECONSTRUCT/REALIGN GRAPEVINE CANYON       10,032,000          352          WER            3            R
                                                    ROAD.
    DELAWARE WATER GAP NRA.......................  REPAIR/REPLACE NEW JERSEY VISITOR USE      24,120,000          264          MAR            3            B
                                                    FACILITIES.
    DELAWARE WATER GAP NRA.......................  STABILIZE HISTORIC STRUCTURES AT 40        22,320,000          111          MAR            2            B
                                                    SITES.
    DELAWARE WATER GAP NRA.......................  REPAIR/REPLACE PENNSYLVANIA VISITOR        22,476,000          263          MAR            3            L
                                                    USE FACILITIES.
    DELAWARE WATER GAP NRA.......................  REHABILITATE WEYGADT FACILITIES and        19,200,000          319          MAR            4            B
                                                    BUILD VISITOR CTR.
    DELAWARE WATER GAP NRA.......................  REHABILITATE/REPAIR ROUTE 209 (22MI)       52,800,000          292          MAR            3            R
                                                    and 6 BRIDGES.
    DENALI NP....................................  CONSTRUCT FIRE-EMERGENCY SERVICES and       1,620,000          105          AKR            5            B
                                                    HEADQTRS. BLDG.
    DENALI NP....................................  REHABILITATE ENTRANCE AREA UTILITIES--      3,410,000          120          AKR            3            U
                                                    WATER and SEWER.
    DENALI NP....................................  RESTORE 77.6 MILES OF GRAVEL ROAD          13,200,000          258          AKR            1            R
                                                    SURFACE.
    DENALI NP....................................  CONSTRUCT TOKLAT REST STOP FACILITIES       1,120,000        100TO          AKR            4            B
    DENALI NP....................................  REPAIR 77.6 MI GRAVEL RD.............      13,200,000          258          AKR            3            R
    DENALI NP....................................  ALTERNATIVE TRANSPORTATION MODES.....       1,320,000         2007          AKR            5            R
    DINOSAUR NM..................................  RECONSTRUCT/REHABILITATE 3 FAILING         12,000,000          216          RMR            3            B
                                                    STRUCTURES.
    DINOSAUR NM..................................  CONSTRUCT MUSEUM COLLECTION/RESEARCH        4,700,000          204          RMR            5            B
                                                    BUILDING.
    DINOSAUR NM..................................  RECONSTRUCT ROADS PARKWIDE...........       9,636,000          191          RMR            3            R
    DRY TORTUGAS NM..............................  REHABILITATE PORTIONS OF FORT              14,400,000          103          SER            2            L
                                                    JEFFERSON.
    EDISON NHS...................................  DEVELOP EDISON CENTER and                  29,600,000          170          NAR            1            B
                                                    REHABILITATE LAB. COMPLEX.
    EISENHOWER NHS...............................  STABILIZE/REPAIR FARM STRUCTURES.....       8,620,000          130          MAR            2            B
    EL MALPAIS NM................................  DEVELOP MULTIAGENCY VISITOR CENTER          5,520,000          105          SWR            4            B
                                                    (PHASE 2.
    EVERGLADES NP................................  REPLACE 20 PLUS OBSOLETE WATER and         14,600,000          191          SER            1            U
                                                    SEWER SYSTEMS.
    EVERGLADES NP................................  MODIFY WATER DELIVERY SYSTEM.........      80,000,000          193          SER            2            L
    EVERGLADES NP................................  REPAVE MAIN PARK ROAD................       7,128,000          111          SER            3            R
    FEDERAL HALL NAT MEMORIAL....................  REHABILITATE FEDERAL HALL............      10,104,000          105          NAR            1            B
    FIRE ISLAND NS...............................  CONSTRUCT SUSTAINABLE STUDENT               2,800,000            1          NAR            3            B
                                                    DISCOVERY CAMP.
    FIRE ISLAND NS...............................  CONSTRUCT VISITOR CENTER, MTNCE., and       6,000,000          169          NAR            4            B
                                                    ADMIN. FACILITY.
    FIRE ISLAND NS...............................  PRESERVE/REHABILITATE HISTORIC FLOYD        3,600,000          174          NAR            5            B
                                                    ESTATE.
    FLORISSANT FOSSIL BEDS NM....................  CONSTRUCT INITIAL PARK FACILITIES....       9,500,000          103          RMR            4            B
    FORT DONELSON NB.............................  CONSTRUCT BYPASS ROAD................       1,980,000          127          SER            5            R
    FORT LARNED NHS..............................  CONSTRUCT VISITOR CENTER.............       7,291,200          198          MWR            5            B
    FORT MCHENRY NM and HIST SHRINE..............  COMPLETE HISTORIC SEAWALL REPAIRS....       2,210,000            1          MAR            2            L
    FORT MCHENRY NM and HIST SHRINE..............  REPLACE UNSAFE VISITOR CENTER........       8,520,000          277          MAR            5            B
    FORT NECESSITY NB............................  REHAB/DEVELOPMENT OF FORT NECESSITY..      12,024,000          230          MAR            4            L
    FORT POINT NHS...............................  REPAIR EARTHQUAKE DAMAGE and REPOINT        2,140,000          393          WER            2            B
                                                    BRICKWORK.
    FORT SCOTT NHS...............................  PROVIDE FIRE PROT. SYSTEMS FOR              1,244,400          227          MWR            2            B
                                                    HISTORIC STRUCTURES.
    FORT SUMTER NM...............................  CONSTRUCT TOUR BOAT FACILITY --             7,100,000          105          SER            5            B
                                                    DOCKSIDE II.
    FORT UNION NM................................  CONSTRUCT CURATORIAL, AUDIO-VISUAL,           720,000          102          SWR            5            B
                                                    and OFFICE AREAS.
    FREDERICKSBURG N MILITARY PARK...............  PROTECT PARK BOUNDARY................         800,000          106          MAR            2            L
    FREDERICKSBURG NMP...........................  STABILIZE HISTORIC STRUCTURES, RUINS,       3,855,600          107          MAR            2            L
                                                    and EARTHWORKS.
    FREDERICKSBURG NMP...........................  ENLARGE VISITOR CENTER/RESTORE HIST.       14,400,000          271          MAR            3            L
                                                    ROAD TRACES.
    FREDERICKSBURG NMP...........................  REHABILITATE PARK ROADS..............       7,128,000          230          MAR            3            R
    GATEWAY NRA..................................  REHABILITATE FLOYD BENNETT FIELD, FT.      12,300,000          169          NAR            1            U
                                                    TILDEN UTILITIES.
    GATEWAY NRA..................................  COMPLETE REHABILITATION OF JACOB RIIS      12,100,000          147          NAR            1            B
                                                    PARK.
    GATEWAY NRA..................................  COMPLETE GREAT KILLS PARK                   2,800,000          149          NAR            4            B
                                                    REHABILITATION.
    GATEWAY NRA..................................  REHABILITATE BATTERY WEED SEAWALL and       3,280,000          219          NAR            2            L
                                                    DOCK.
    GATEWAY NRA..................................  PRESERVE/REHABILITATE FORT HANCOCK        120,000,000          123          NAR            2            B
                                                    STRUCT. and UTIL.
    GATEWAY NRA..................................  REHABILITATE FORT WADSWORTH FOR            48,000,000          191          NAR            1            B
                                                    VISITOR and NPS USE.
    GATEWAY NRA..................................  REHABILITATE SANDY HOOK MAIN ROAD....       8,580,000          111          NAR            1            R
    GATEWAY NRA..................................  REHABILITATE MILLER FIELD ROAD AND          4,224,000          115          NAR            3            R
                                                    PARKING.
    GATEWAY NRA..................................  REHABILITATE PARK ROADS..............      21,780,000          185          NAR            1            R
    GEO. WASHINGTON MEML PKWY....................  REHABILITATE GLEN ECHO FACILITIES....       2,000,000          171          NCR            3            B
    GEO. WASHINGTON MEML PKWY....................  RESTORE THEODORE ROOSEVELT MEMORIAL..       1,765,000          181          NCR            2            L
    GEO. WASHINGTON MEML PKWY....................  CandO VIEWSHED-REMOVE/REHABILITATE         19,752,000          172          NCR            2            L
                                                    STRUCT. and LNDSCP.
    GEO. WASHINGTON MEML PKWY....................  RECONSTRUCT SPOUT RUN PARKWAY (PHASE        7,440,000          836          NCR            1            R
                                                    IV).
    GEO. WASHINGTON MEML PKWY....................  PRESERVE ARLINGTON HOUSE HISTORIC             420,000          103          NCR            2            B
                                                    FURNISHINGS.
    GEO. WASHINGTON MEML PKWY....................  SPROUT RUN TO 123....................       6,600,000          461          NCR            1            R
    GEO. WASHINGTON MEML PKWY....................  123 TO SPROUT RUN....................       6,600,000          461          NCR            1            R
    GEORGE WASHINGTON MEML PKWY..................  REHABILITATE MEMORIAL AVENUE BRIDGE..       3,300,000          464          NCR            3            R
    GEORGE ROGERS CLARK NHP......................  REHABILITATE HISTORIC MEMORIAL              1,560,000          122          MWR            2            B
                                                    TERRACE.
    GETTYSBURG NMP...............................  PROTECT HISTORIC STRUCTURES..........       2,500,000            1          MAR            2            B
    GETTYSBURG NMP...............................  REPAIR 22 HISTORIC MONUMENTS.........       2,012,000            2          MAR            2            L
    GETTYSBURG NMP...............................  REHABILITATE VISITOR CENTER..........       4,280,000          296          MAR            1            B
    GETTYSBURG NMP...............................  REHAB PARK ROADS.....................       8,316,000          106          MAR            3            R
    GLACIER BAY NP...............................  CONSTRUCT MTNCE. FACILITIES/                1,700,000        100BC          AKR            1            U
                                                    REHABILITATE UTILITY SYS.
    GLACIER BAY NP...............................  CONSTRUCT PARK EMPLOYEE HOUSING......       3,100,000          130          AKR            4            H
    GLACIER BAY NP...............................  REHABILITATE MAIN PARK ROAD..........       6,204,000          170          AKR            3            R
    GLACIER NP...................................  UPGRADE UNSAFE WATER AND SEWER SYSTEM       9,500,000          165          RMR            1            U
    GLACIER NP...................................  REHAB GOING TO THE SUN ROAD, 55 MILES      78,144,000          303          RMR            3            R
    GLACIER NP...................................  REHABILITATE SUBSTANDARD BACKCOUNTRY        2,800,000          357          RMR            3            B
                                                    CHALETS.
    GLACIER NP...................................  REHABILITATE LAKE MCDONALD/APGAR           18,673,200          264          RMR            3            B
                                                    CONCESS. FACILITIES.
    GLACIER NP...................................  REPLACE OBSOLETE HOUSING PARKWIDE....      18,765,600          399          RMR            3            H
    GLEN CANYON NRA..............................  CONSTRUCT FEE COLLECTION STATIONS and      10,616,400          210          RMR            4            B
                                                    EMPL. HOUSING.
    GLEN CANYON NRA..............................  UPGRADE SUBSTANDARD PARK HOUSING.....      18,726,000          421          RMR            3            H
    GLEN CANYON NRA..............................  CORRECT MARINA CONSTRUCTION                 1,176,000          434          RMR            3            U
                                                    DEFICIENCIES.
    GLEN CANYON NRA..............................  REHABILITATE STATE LINE ROADS........       3,168,000          341          RMR            3            R
    GLEN CANYON NRA..............................  REHABILITATE BULL FROG ROADS.........       5,544,000          342          RMR            3            R
    GLEN CANYON NRA..............................  RECONSTRUCT MARINA ACCESS ROAD.......       1,980,000          380          RMR            3            R
    GOLDEN GATE NRA..............................  REHABILITATE/REPAIR FORT MASON PIER..      25,152,000          282          WER            2            B
    GOLDEN GATE NRA..............................  REPLACE RESTROOMS....................       3,301,200          357          WER            5            B
    GOLDEN GATE NRA..............................  STABILIZE ALCATRAZ HISTORIC                 5,030,400          167          WER            2            B
                                                    STRUCTURES.
    GOLDEN GATE NRA..............................  REHABILITATE MARIN DISTRICT ROADS....      10,032,000          857          WER            3            R
    GOLDEN GATE NRA..............................  REHABILITATE SAN FRANCISCO DISTRICT         4,620,000          858          WER            3            R
                                                    ROADS.
    GRAND CANYON NP..............................  CONSTRUCT REPLACEMENT HOUSING........      16,800,000          143          WER            1            H
    GRAND CANYON NP..............................  REPLACE NORTH RIM PIPELINE and             11,800,000          319          WER            1            U
                                                    TREATMENT SYSTEM.
    GRAND CANYON NP..............................  LANDFILL CLOSURE.....................       6,300,000          190          WER            1            L
    GRAND CANYON NP..............................  CONSTRUCT SOUTH RIM ORIENTATION......      21,900,000            1          WER            5            B
    GRAND CANYON NP..............................  REHABILITATE SUBSTANDARD HOUSING.....       7,545,600          348          WER            1            H
    GRAND CANYON NP..............................  SAFETY RECONSTRUCTION OF WEST RIM           7,388,400          196          WER            1            R
                                                    DRIVE.
    GRAND CANYON NP..............................  CONSTRUCT PUBLIC RESTROOMS...........       3,301,200          121          WER            5            B
    GRAND CANYON NP..............................  REALIGN/REPAIR EAST RIM ROAD.........      11,352,000          272          WER            3            R
    GRAND CANYON NP..............................  RECONSTRUCT SOUTH RIM ROADS..........      50,160,000          110          WER            3            R
    GRAND CANYON NP..............................  RECONSTRUCT WEST RIM DRIVE...........       7,128,000          196          WER            1            R
    GRAND PORTAGE NM.............................  REMOVE HOUSING and MTNCE. ACTIVITIES        3,240,000          106          MWR            2            B
                                                    FROM HIST. RES.
    GRAND PORTAGE NM.............................  CONSTRUCT VISITOR CENTER/                   4,380,000          105          MWR            5            B
                                                    ADMINISTRATIVE FACILITY.
    GRAND PORTAGE NM.............................  RELOCATE ROADS.......................       1,716,000          108          MWR            2            R
    GRAND TETON NP...............................  COMPLETE FINAL SURFACE FOR 31.7 MILES      14,784,000          328          RMR            3            R
                                                    OF MAIN ROAD.
    GRAND TETON NP...............................  REPAIR UTILITY SYSTEMS PARKWIDE......      30,000,000          102          RMR            3            U
    GRAND TETON NP...............................  REPLACE PARK HOUSING TO MEET               25,836,000          148          RMR            3            H
                                                    STANDARDS.
    GREAT BASIN NP...............................  REPAIR ROAD SURFACE and SHOULDERS....       5,940,000          197          WER            3            R
    GREAT SAND DUNES NM..........................  EXPAND VISITOR CENTER THRU                  1,900,000          103          RMR            5            B
                                                    PARTNERSHIP.
    GREAT SAND DUNES NM..........................  WIDEN and REHABILITATE ROAD..........       2,640,000          126          RMR            3            R
    GREAT SMOKY MOUNTAINS NP.....................  CONSTRUCT OCONOLUFTEE VISITOR CENTER.       8,000,000          129          SER            5            B
    GREAT SMOKY MOUNTAINS NP.....................  REPLACE FOUR BRIDGES.................       3,696,000          319          SER            3            R
    GREAT SMOKY MOUNTAINS NP.....................  COMPLETE 33.5 MILES OF FOOTHILLS           34,980,000          109          SER            4            R
                                                    PKWY. and ASSOC. FAC.
    GREAT SMOKY MOUNTAINS NP.....................  CONST INTERP CTR, PICNIC AREA, RDS         22,680,000          314          SER            5            B
                                                    and UTI.
    GREAT SMOKY MOUNTAINS NP.....................  REHAB ABRAMS, GREENBRIER, BIG CREEK         1,452,000          324          SER            3            R
                                                    RDS.
    GUADALUPE MOUNTAINS NP.......................  CONSTRUCT TRAIL SYSTEM (PHASE 4......       1,200,000          110          SWR            2            L
    GUADALUPE MOUNTAINS NP.......................  CONSTRUCT PINE SPRINGS CAMPGROUND....       1,560,000          202          SWR            4            L
    GUADALUPE MOUNTAINS NP.......................  SURFACE DOG CANYON ENTRANCE ROAD.....       1,056,000          207          SWR            3            R
    HAGERMAN FOSSIL BEDS NM......................  CONSTRUCT RESEARCH CENTER/MUSEUM.....      16,800,000          101          PNR            4            B
    HALEAKALA NP.................................  REHAB HOUSE OF THE SUN VIS. CTR. and        3,144,000          105          WER            3            B
                                                    COMFORT STATION.
    HALEAKALA NP.................................  CONSTRUCT KIPAHULA WATER SYS.,              4,087,200          153          WER            4            B
                                                    RESTROOM, ADMIN. FAC.
    HAMILTON GRANGE NAT MEML.....................  REHABILITATE and RELOCATE HAMILTON         13,080,000          105          NAR            2            B
                                                    GRANGE.
    HAMPTON NHS..................................  RESTORE DETERIORATED HISTORIC               9,600,000          209          MAR            2            B
                                                    STRUCTURES.
    HARPERS FERRY NHP............................  STABILIZE HISTORIC STRUCTURES........       2,673,600          118          NCR            2            B
    HARRY S TRUMAN NHS...........................  REHAB TRUMAN AND NOLAND HISTORIC            1,200,000          200          MWR            2            B
                                                    HOUSES.
    HAWAII VOLCANOES NP..........................  REHABILITATE CRATER RIM DRIVE........       6,996,000          211          WER            3            R
    HERBERT HOOVER NHS...........................  CONSTRUCT FARM ROAD..................       1,848,000          162          MWR            3            R
    HERBERT HOOVER NHS...........................  CONSTRUCT MAINTENANCE FACILITY.......         840,000          743          MWR            5            B
    HERBERT HOOVER NHS...........................  STABILIZE and ADAPTIVELY RESTORE 8          2,880,000          110          MWR            2            B
                                                    HISTORIC HOUSES.
    HOME OF FDR NHS..............................  RESTORE/REHABILITATE FDR HOME AND           7,042,000          137          NAR            2            B
                                                    SITE.
    HOME OF FDR NHS..............................  REHABILITATE ROADS, BRIDGES, and            6,204,000          138          NAR            3            R
                                                    PARKWAY.
    HOPEWELL FURNACE NHS.........................  COMPLETE PRESERVATION OF FURNACE            6,000,000          195          MAR            2            L
                                                    RESOURCES.
    HORACE ALBRIGHT TRAINING CTR.................  REHABILITATE TRAINING CENTER COMPLEX.       6,241,000            1         WASO            3            B
    HOT SPRINGS NP...............................  REHABILITATE/RESTORE BATHHOUSE ROW         10,100,000          145          SWR            2            B
                                                    STRUCTURES.
    HOT SPRINGS NP...............................  UPGRADE GULPHA GORGE CAMPGROUND......       2,400,000          245          SWR            3            L
    HOVENWEEP NM.................................  BUILD VISITOR CENTER/RANGER STATION         3,670,000          134          RMR            4            B
                                                    and SUPPORT FAC.
    HUBBELL TRADING POST NHS.....................  CONTROL EROSION IN PUEBLO COLORADO            840,000          158          SWR            2            L
                                                    WASH.
    HUBBELL TRADING POST NHS.....................  IMPROVE VISITOR USE, MTNCE., and            3,000,000          107          SWR            4            B
                                                    CURATORIAL FACILITIES.
    INDEPENDENCE NHP.............................  IMPROVE/REHABILITATE UTILITIES.......      80,000,000          412          MAR            1            U
    INDEPENDENCE NHP.............................  REHABILITATE INDEPENDENCE MALL WALKS       18,600,000          168          MAR            1            L
                                                    AND WALLS.
    INDIANA DUNES NL.............................  REMOVE ASBESTOS FROM 250 STRUCTURES..       6,960,000          510          MWR            1            B
    INDIANA DUNES NL.............................  CONSTRUCT WEST UNIT ACCESS ROAD......       7,920,000          288          MWR            5            R
    INDIANA DUNES NL.............................  IMPROVE PARK ROADS (INCLUDES PKG 295.      29,040,000          294          MWR            3            R
    ISLE ROYALE NP...............................  REPLACE ELEVATED WATER TANK..........       3,520,000          188          MWR            1            U
    ISLE ROYALE NP...............................  REHABILITATE RANGER III..............       2,300,000          319          MWR            1            L
    ISLE ROYALE NP...............................  CONSTRUCT EMPLOYEE HOUSING DUPLEX....         786,000          400          MWR            1            H
    ISLE ROYALE NP...............................  CONSTRUCT 3 EMPLOYEE HOUSING DUPLEXES       2,280,000          117          MWR            5            H
    JAMES A. GARFIELD NHS........................  REHABILITATE FIRE and INTRUSION ALARM       7,308,000          103          MWR            2            B
                                                    SYSTEMS.
    JAMES A. GARFIELD NHS........................  RECONSTRUCT ROAD and PARKING.........         924,000          164          MWR            3            R
    JEAN LAFITTE NHP and PRES....................  PROVIDE THIBODEAU LANDSCAPING and           1,920,000          178          SWR            4            L
                                                    PARKING.
    JEFFERSON NAT EXPANSION MEML.................  REPLACE ARCH HANDICAPPED ACCESS RAMPS       2,340,000          241          MWR            1            B
    JEFFERSON NAT EXPANSION MEML.................  CONSTRUCT PARKING GARAGE and GROUNDS        1,560,000          220          MWR            5            B
                                                    MTNCE. FAC.
    JOHN D. ROCKEFELLER MEM PKWY.................  DEVELOPMENT OF FLAGG RANCH FACILITIES      16,300,000          131          RMR            5            B
    JOHN DAY FOSSIL BEDS NM......................  CONSTRUCT VISITOR/RESEARCH CENTER....      14,400,000          105          PNR            5            B
    JOSHUA TREE NM...............................  RECONSTRUCT ROADS, PARKING, and            27,720,000          173          WER            3            R
                                                    CAMPGROUND ROADS.
    JOSHUA TREE NM...............................  REHABILITATE OASIS VISITOR CENTER and       4,873,200          388          WER            3            B
                                                    ADMIN. BLDG.
    JOSHUA TREE NM...............................  RECONSTRUCT/REHABILITATE NARROW            17,160,000          174          WER            3            R
                                                    UNSAFE ROADS.
    KATMAI NP....................................  CONSTRUCT LAKE CAMP FACILITIES.......       1,726,000          102          AKR            4            L
    KATMAI NP....................................  RELOCATE BROOKS CAMP FACILITIES/           10,600,000        100BC          AKR            2            B
                                                    REPAIR VTS ROAD.
    KENAI FJORDS NP..............................  CONSTRUCT VISITOR CENTER/HEADQUARTERS      11,500,000        100SW          AKR            3            U
                                                    FACILITY.
    KENAI FJORDS NP..............................  IMPROVE ACCESS AND VISITOR FACILITIES       2,800,000        100EG          AKR            3            B
    KEWEENAW NHP.................................  STABILIZE CORE BUILDINGS.............       4,716,000          100          MWR            2            B
    LAKE CLARK NP and PRES.......................  CONSTRUCT HOUSING and SUPPORT               6,939,000        100PA          AKR            4            B
                                                    FACILITIES.
    LAKE MEAD NRA................................  UPGRADE WATER TREATMENT AT KATHERINE.       3,095,000           69          WER            1            U
    LAKE MEAD NRA................................  MITIGATE STRUCTURAL FLOODING PROBLEMS      29,600,000          853          WER            1            L
    LAKE MEAD NRA................................  SAFETY RECONSTRUCTION LAKESHORE ROAD.      32,340,000          242          WER            1            R
    LAKE MEAD NRA................................  REHAB NORTH SHORE ROAD and CONNECT         55,440,000          457          WER            1            R
                                                    ACCESS.
    LAKE MEAD NRA................................  ENTRANCE STATION PROGRAM.............      15,248,400          594          WER            5            B
    LAKE MEAD NRA................................  IMPROVE ROAD TO PRINCESS COVE........       2,508,000          700          WER            3            R
    LAKE MEREDITH NRA............................  RECONSTRUCT/RECONNECT/REPAIR WATER          4,400,000          210          SWR            1            U
                                                    SYSTEM.
    LAKE MEREDITH NRA............................  REHABILITATE/CONSTRUCT CAMPGROUNDS         33,480,000          110          SWR            3            L
                                                    and RESTROOMS.
    LAKE MEREDITH NRA............................  RECONSTRUCT ACCESS ROADS and PARKINGS       7,788,000          185          SWR            3            R
    LAKE MEREDITH NRA............................  CONNECT PARK TO FRITCH WATER SYSTEM..         960,000          192          SWR            3            U
    LASSEN VOLCANIC NM...........................  UPGRADE HEADQUARTERS UTILITY SYSTEMS.       4,244,400          325          WER            3            U
    LASSEN VOLCANIC NM...........................  REPAIR MAIN PARK ROAD................      13,596,000          101          WER            3            R
    LASSEN VOLCANIC NM...........................  PAVE BUTTE LAKE ACCESS and CAMPGROUND       1,716,000          312          WER            3            R
    LAVA BEDS....................................  RECONSTRUCT SOUTHEAST ENTRANCE ROAD..       5,940,000          302          WER            3            R
    LAVA BEDS NM.................................  RECONSTUCT S.E. ENTRANCE and MEDICINE       5,940,000          302          WER            3            R
                                                    LAKE ROADS.
    LINCOLN BOYHOOD NM...........................  RELOCATE COUNTY ROADS A and B/UPGRADE       2,772,000          126          MWR            3            R
                                                    PARKING.
    LINCOLN HOME NHS.............................  STABILIZE/RESTORE STUVE HOUSE........       3,144,000          403          MWR            2            B
    LITTLE BIGHORN NB............................  CONSTRUCT INDIAN MEMORIAL............         900,000          147          RMR            5            L
    LOWELL NHP...................................  COMPLETE BOOTT MILL..................         958,000          117          NAR            2            B
    LOWELL NHP...................................  REHAB VISITOR CENTER PARKING.........         660,000          101          NAR            4            R
    LYNDON B. JOHNSON NHP........................  CONSTRUCT MAINTENANCE/BUS SERVICE           3,600,000          135          SWR            5            B
                                                    AREA.
    LYNDON B. JOHNSON NHP........................  REHABILITATE PARK ROADS..............       1,980,000          193          SWR            3            R
    LYNDON B. JOHNSON NHP........................  EXTEND WATER SYSTEM TO JUNCTION               600,000          198          SWR            2            U
                                                    SCHOOL.
    MAMMOTH CAVE NP..............................  RENOVATE VISITOR CENTER..............       5,327,000          171          SER            3            B
    MAMMOTH CAVE NP..............................  CONSTRUCT NEW ADMINISTRATION BUILDING       9,720,000          185          SER            5            B
    MANASSAS NAT BATTLEFIELD PARK................  RESTORE DISTURBED STUART'S HILL             6,828,000          225          NCR            2            L
                                                    BATTLEGROUND.
    MANASSAS NAT BATTLEFIELD PARK................  PRESERVE HISTORIC RESOURCES FOR             1,382,000          155          NCR            2            L
                                                    VISITOR USE.
    MESA VERDE NP................................  STABILIZE AND RESTORE PREHISTORIC          12,000,000          239          RMR            2            B
                                                    STRUCTURES.
    MESA VERDE NP................................  COMPLETE WATERLINE REPLACEMENT.......       4,500,000          223          RMR            3            U
    MESA VERDE NP................................  CONSTRUCT ENTRANCE STATION and              1,542,000          120          RMR            5            B
                                                    COMPLETE ROAD.
    MESA VERDE NP................................  CORRECT ENTRANCE ROAD FAILURE........       9,636,000          278          RMR            3            R
    MESA VERDE NP................................  RECONSTRUCT WETHERILL ROAD...........       7,920,000          225          RMR            3            R
    MINUTE MAN NHP...............................  PRESERVE/REHABILITATE 29 HIST. BATTLE       7,200,000          171          NAR            1            B
                                                    RD. STRUCTURES.
    MISSISSIPPI NAT RIVERandRECR. AREA...........  DEVELOP PARTNERSHIP EDUC. FAC. IN           2,564,000          110          MWR            4            B
                                                    SCIENCE MUSEUM.
    MISSISSIPPI NR&RA............................  CONSTRUCT PARTNERSHIP EDUCATION             4,281,000          114          MWR            4            B
                                                    CENTER.
    MONOCACY NB..................................  RESTORE STRUCTURE FOR PRESERVATION          5,940,000          337          NCR            2            B
                                                    TRAINING.
    MONTEZUMA CASTLE NM..........................  DEVELOP MONTEZUMA WELL INFRASTRUCTURE       2,940,000          100          SWR            4            B
                                                    & FAC.
    MORRISTOWN NHP...............................  REHABILITATE PARK TOUR ROADS.........       7,128,000          187          NAR            3            R
    MOUNT RAINIER NP.............................  REHABILITATE JACKSON VISITOR CENTER..       4,400,000          399          PNR            3            B
    MOUNT RAINIER NP.............................  REPLACE SUNRISE LODGE................       5,400,000          315          PNR            1            B
    MOUNT RAINIER NP.............................  REHABILITATE HIGHWAY 410.............       6,864,000         349A          PNR            1            R
    MOUNT RAINIER NP.............................  CONSTRUCT TAHOMA WOODS ENTRANCE/            1,800,000          311          PNR            5            B
                                                    CONTACT STATION.
    MOUNT RAINIER NP.............................  REHABILITATE PARADISE INN and ANNEX..       8,400,000          370          PNR            3            B
    MOUNT RAINIER NP.............................  REHABILITATE HIGHWAY 123.............      25,080,000         349B          PNR            1            R
    MOUNT RAINIER NP.............................  REHABILITATE CARBON RIVER FACILITIES.       6,000,000          316          PNR            2            B
    MOUNT RAINIER NP.............................  RECONSTRUCT BACKBONE RIDGE VIADUCT...       3,036,000          386          PNR            1            R
    MOUNT RUSHMORE N MEML........................  REPLACE WASTEWATER TREATMENT SYSTEM..       8,989,000          182          RMR            3            U
    MOUNT RUSHMORE N MEML........................  CONSTRUCT EXHIBITS and MTNCE. FAC./        12,000,000          182          RMR            5            B
                                                    REHABILITATE STUDIO.
    NATCHEZ TRACE PARKWAY........................  CONSTRUCT PARKWAY....................      55,440,000          300          SER            5            R
    NATCHEZ TRACE PARKWAY........................  CONSTRUCT NORTH VISITOR CENTER and          6,000,000         300A          SER            5            B
                                                    MAINTENANCE AREA.
    NATCHEZ TRACE PARKWAY........................  CONSTRUCT FOUR OVERPASSES............       5,280,000          238          SER            5            R
    NATCHEZ TRACE PARKWAY........................  REPAIR/REPLACE BRIDGES...............      17,556,000          264          SER            3            R
    NATCHEZ TRACE PARKWAY........................  RESURFACE VARIOUS SECTIONS OF PARKWAY      99,000,000          250          SER            3            R
    NATIONAL CAPITOL AREA........................  CONSTRUCT MUSEUM/ARCHEOLOGICAL             16,000,000         323A          NCR            5            B
                                                    STORAGE FACILITY.
    NATIONAL CAPITOL AREA........................  REHABILITATE and ADD SPACE TO              17,488,800          730          NCR            3            B
                                                    HEADQUARTERS BUILDING.
    NATIONAL CAPITOL PARKS-CENTRAL...............  RESTORE LINCOLN AND JEFFERSON              15,400,000          758          NCR            2            B
                                                    MEMORIALS.
    NATIONAL CAPITOL PARKS-CENTRAL...............  STABILIZE AND PRESERVE WASHINGTON          18,000,000          448          NCR            2            B
                                                    MONUMENT.
    NATIONAL CAPITOL PARKS-CENTRAL...............  REPAIR MONUMENT CORES AND SEAWALLS...      78,600,000          731          NCR            1            L
    NATIONAL CAPITOL PARKS-CENTRAL...............  PROVIDE FORDS THEATRE HANDICAPPED           7,900,000          790          NCR            2            B
                                                    ACCESS.
    NATIONAL CAPITOL PARKS-CENTRAL...............  IMPROVE WASHINGTON MONUMENT ACCESS...       9,690,000          430          NCR            3            L
    NATIONAL CAPITOL PARKS-CENTRAL...............  MEMORIAL CORE-RECONSTRUCT EAST BASIN        4,356,000          450          NCR            1            R
                                                    DRIVE.
    NATIONAL CAPITOL PARKS-CENTRAL...............  REHABILITATE LINCOLN CIRCLE AREA/           5,502,000          825          NCR            2            R
                                                    PROVIDE VIS. ACCESS.
    NATIONAL CAPITOL PARKS-CENTRAL...............  REHABILITATE H-1 PARK POLICE STABLE         3,000,000          827          NCR            3            B
                                                    and CORRECT DRAINAGE.
    NATIONAL CAPITOL PARKS-CENTRAL...............  MEMORIAL CORE-RECONSTRUCT INDIANA and            405E          NCR            1            R
                                                    MAINE AVENUES.
    NATIONAL CAPITOL PARKS-CENTRAL...............  DC MALL--ALTERNATIVE TRANSPORTATION         2,640,000         2005          NCR            5            R
                                                    MODES.
    NATIONAL CAPITOL PARKS-CENTRAL...............  RECONSTRUCT INDIANA and MAINE AVES.,       29,172,000          405          NCR            3            R
                                                    EASTBOUND.
    NATIONAL CAPITOL PARKS-CENTRAL...............  RECONSTRUCT JEFFERSON DRIVE..........       2,904,000         405B          NCR            3            R
    NATIONAL CAPITOL PARKS-CENTRAL...............  RECONSTRUCT ROADS, EAST POTOMAC PARK.       5,016,000         405C          NCR            3            R
    NATIONAL CAPITOL PARKS-CENTRAL...............  RECONSTRUCT LINCOLN MEM. CIRCLE and         3,960,000         405D          NCR            1            R
                                                    APPROACHES.
    NATIONAL CAPITOL PARKS-CENTRAL...............  RECONSTRUCT CONSTITUTION AVE.........       7,128,000         405G          NCR            3            R
    NATIONAL CAPITOL PARKS-EAST..................  RESTORE FORT WASHINGTON..............       4,940,000          106          NCR            2            B
    NATIONAL CAPITOL PARKS-EAST..................  REHABILITATE FREDERICK DOUGLASS HOME        1,800,000          738          NCR            2            B
                                                    VISITOR CENTER.
    NATIONAL CAPITOL PARKS-EAST..................  RECONSTRUCT RENO ROAD OVERPASS             10,560,000          315          NCR            3            R
                                                    (SUITLAND PKWY).
    NAVAJO NM....................................  CONSTRUCT PEDESTRIAN TRAIL TUNNEL....         840,000          141          SWR            3            L
    NAVAJO NM....................................  REHABILITATE ENTRANCE AND CAMPGROUND          660,000          144          SWR            3            R
                                                    ROADS.
    NEW JERSEY COASTAL HER. TRAIL................  INITIAL INTERPRETIVE DEVELOPMENTS....       7,800,000          102          NAR            4            L
    NEW RIVER GORGE NR...........................  STABILIZE/PRESERVE/ADAPT THURMOND          33,000,000          126          MAR            4            L
                                                    HIST. STRUCT./SITE.
    NEW RIVER GORGE NR...........................  DUN GLEN/SOUTHSIDE JUNCTION                 3,240,000          155          MAR            4            L
                                                    DEVELOPMENT.
    NEW RIVER GORGE NR...........................  GRANDVIEW CULTURAL HERITAGE CENTER         36,000,000          158          MAR            4            L
                                                    DEVELOPMENT.
    NEW RIVER GORGE NR...........................  KAYMOOR DEVELOPMENT..................       3,600,000          156          MAR            4            L
    NEW RIVER GORGE NR...........................  HEADQUARTERS DEVELOPMENT (PHASE IV)..       2,700,000         108E          MAR            4            L
    NEW RIVER GORGE NR...........................  MIDDLE GORGE ACCESS..................       3,100,000          154          MAR            4            L
    NEW RIVER GORGE NR...........................  REHABILITATE PARK ROADS..............       2,640,000          138          MAR            3            R
    NEZ PERCE NHS................................  CONSTRUCT WHITEBIRD INTERP FACILITIES         960,000          160          PNR            4            B
    NEZ PERCE NHS................................  REPLACE SPALDING ROADS and PARKING...       1,056,000          159          PNR            3            R
    NORTH CASCADES NP............................  REPAIR/STABILIZE GOLDEN WEST VISITOR        2,486,000          107          PNR            3            B
                                                    CENTER.
    NORTH CASCADES NP............................  REPLACE NEWHALEM and HARLEQUIN              6,072,000          404          PNR            1            R
                                                    BRIDGES.
    NORTH CASCADES NP............................  PROVIDE STEHEKIN EMPLOYEE HOUSING....       1,200,000          369          PNR            5            H
    NORTH CASCADES NP............................  DEVELOP JOINT US/CANADIAN UTILITIES         3,000,000          391          PNR            4            U
                                                    AT HOZOMEEN.
    NORTH CASCADES NP............................  DEVELOP/IMPROVE HIGHWAY 20 FACILITIES       2,160,000          388          PNR            1            R
    NORTH CASCADES NP............................  RECONSTRUCT CASCADE RIVER ROAD.......         792,000          343          PNR            1            R
    NORTH CASCADES NP............................  REHABILITATE STEHEKIN ROAD...........       1,980,000          344          PNR            1            R
    NORTHWEST ALASKA AREAS.......................  CONSTRUCT VISITOR CTR./HEADQTRS. and       10,510,000        100KZ          AKR            4            B
                                                    MTNCE. FACILITIES.
    NORTHWEST ALASKA AREAS.......................  CONSTRUCT KOTZEBUE EMPLOYEE HOUSING..       4,690,000          130          AKR            4            B
    OLYMPIC NP...................................  ELWHA DAM REMOVAL/RESTORATION........     126,600,000          404          PNR            2            L
    OLYMPIC NP...................................  EXPAND VISITOR FACILITIES AT HOH            4,080,000          405          PNR            5            B
                                                    RAINFOREST.
    OLYMPIC NP...................................  CONSTRUCT KALALOCH VISITOR CENTER....      10,200,000          360          PNR            5            B
    OLYMPIC NP...................................  RECONSTRUCT EAST BEACH and LOG CABIN        4,752,000          311          PNR            1            R
                                                    RESORT ROADS.
    OLYMPIC NP...................................  CONSTRUCT TWIN CREEK BRIDGE..........         924,000          406          PNR            2            R
    OLYMPIC NP...................................  REPLACE FINLEY CREEK BRIDGE..........       1,056,000          407          PNR            3            R
    ORGAN PIPE CACTUS NM.........................  REHABILITATE PAVED PUBLIC ROADS......       1,320,000          439          WER            3            R
    OZARK NAT SCENIC RIVER.......................  CONSTRUCT REGIONAL CULTURAL/VIS. CTR./      9,600,000          459          MWR            5            B
                                                    ADMIN. COMPLEX.
    OZARK NSR....................................  RELOCATE CAMPGROUND and CONC. FAC.         12,184,800          103          MWR            2            B
                                                    FROM FLOODPLAIN.
    OZARK NSR....................................  REHABILITATE PEAVINE ROAD............       4,356,000          506          MWR            3            R
    PADRE ISLAND NS..............................  CONSTRUCT SEWAGE TREATMENT FACILITIES       1,046,000          215          SWR            4            U
    PADRE ISLAND NS..............................  REHABILITATE/RELOCATE BIRD ISLAND           1,188,000          200          SWR            3            R
                                                    BASIN ROAD.
    PADRE ISLAND NS..............................  CONTRUCT MAINTENANCE SHOP and STORAGE       2,160,000          188          SWR            5            B
                                                    AREA.
    PEA RIDGE NMP................................  RELOCATE OVERHEAD UTILITY LINES......         900,000          134          SWR            3            U
    PEA RIDGE NMP................................  CONSTRUCT MAINTENANCE/STORAGE AREA...       1,200,000          111          SWR            5            B
    PEA RIDGE NMP................................  CONSTRUCT ELKHORN TAVERN COMFORT            1,200,000          125          SWR            5            B
                                                    STATION and PARKING.
    PECOS NHP....................................  IMPROVE SEWAGE TREATMENT and                3,480,000          143          SWR            3            U
                                                    REHABILITATE RANCH.
    PECOS NHP....................................  REHABILITATE ENTRANCE ROAD...........         660,000          137          SWR            3            R
    PERRY'S VICTORY andINT PEACE MEML............  CONSTRUCT VISITOR CENTER.............      13,650,000          104          MWR            5            B
    PETERSBURG NB................................  PRESERVE/PROTECT EARTHWORKS and OTHER       8,400,000          249          MAR            2            L
                                                    PRIMARY RES.
    PETERSBURG NB................................  REHABILITATE/DEVELOP INTERPRETIVE/          7,200,000          248          MAR            4            L
                                                    VISITOR FACILITIES.
    PETERSBURG NB................................  REHABILITATE MAIN PARK ROAD and             1,980,000          132          MAR            3            R
                                                    BRIDGES.
    PETRIFIED FOREST NP..........................  REHABILITATE PAINTED DESERT INN and         2,851,000          109          SWR            2            B
                                                    CABINS.
    PETROGLYPH NM................................  REHABILITATE/EXPAND VISITOR CENTER...       1,156,000            1          SWR            4            B
    PETROGLYPH NM................................  FENCE BOUNDARY/REMOVE DEBRIS.........         960,000          103          SWR            2            L
    PETROGLYPH NM................................  CONSTRUCT NEW VISITOR CENTER.........      13,080,000          106          SWR            4            B
    PICTURED ROCKS NL............................  CONSTRUCT ADMINISTRATION and PUBLIC         3,800,000          168          MWR            5            B
                                                    USE FACILITY.
    PICTURED ROCKS NL............................  RESTORE LIGHTHOUSE SEAWALL...........         943,200          107          MWR            2            L
    PICTURED ROCKS NL............................  REHAB 12 MILES BEACH ROUTE 16........      16,764,000          191          MWR            5            R
    PICTURED ROCKS NL............................  PAVING--AuSABLE POINT................         660,000          200          MWR            3            R
    PICTURED ROCKS NL............................  PAVE ROAD and PARKING--MINER'S BEACH.         396,000          200          MWR            3            R
    POINT REYES NS...............................  RECONSTRUCT TOMALES ROAD.............       1,320,000          261          WER            3            R
    POINT REYES NS...............................  PAVE PALO MARIN TRAILHEAD ROAD.......         924,000          262          WER            3            R
    PRESIDENT'S PARK.............................  ELIMINATE ENV. HAZARD AT WHITE HOUSE          649,000          473          NCR            1            B
                                                    GREENHOUSE.
    PRESIDENT'S PARK.............................  IMPLEMENT WHITE HOUSE COMPREHENSIVE        90,000,000          249          NCR            5            B
                                                    DESIGN.
    PRINCE WILLIAM FOREST PARK...................  REPLACE CAMPGROUND WATER LINES.......       7,450,000          239          NCR            1            U
    PRINCE WILLIAM FOREST PARK...................  CONSTRUCT VISITOR CENTER.............       4,200,000          152          NCR            5            B
    PU'UHONUA O HONAUNAU.........................  CONSTRUCT REPLACEMENT OFFICE and            3,458,400          113          WER            5            B
                                                    MAINTENANCE SHOP.
    PUUKOHOLA HEIAU..............................  RELOCATE VISITOR CTR., ADMIN., and          1,886,400          107          WER            3            B
                                                    MAINTENANCE SHOP.
    REDWOOD NP...................................  REALIGN DAVISON ROAD.................       4,224,000          186          WER            3            R
    RICHMOND NAT BATTLEFIELD PARK................  STABILIZE DREWERY'S BLUFF and              14,400,000          170          MAR            2            L
                                                    EARTHWORKS.
    RICHMOND NBP.................................  REPAIR/REHABILITATE EXISTING VISITOR       10,800,000          169          MAR            3            L
                                                    USE FACILITIES.
    RICHMOND NBP.................................  REHABILITATE PARK ROADS..............       2,772,000          129          MAR            3            R
    ROCK CREEK PARK..............................  RESTORE HISTORIC PIERCE GRIST MILL...       1,223,000          227          NCR            2            B
    ROCK CREEK PARK..............................  REHABILITATE MERIDIAN HILL                 10,471,200          120          NCR            2            B
                                                    INFRASTRUCTURE.
    ROCK CREEK PARK..............................  CORRECT CARTER BARON STRUCTURAL               684,000          204          NCR            2            B
                                                    PROBLEMS.
    ROCK CREEK PARK..............................  REHABILITATE ROCK CREEK PARKWAY and        34,452,000          318          NCR            1            R
                                                    ADJACENT TRAIL.
    ROCKY MOUNTAIN NP............................  CONSTRUCT VEHICLE MAINTENANCE/STORAGE         506,400          278          RMR            3            B
                                                    BUILDINGS.
    ROCKY MOUNTAIN NP............................  REPLACE OBSOLETE SEASONAL HOUSING....      28,044,000          123          RMR            3            H
    ROCKY MOUNTAIN NP............................  UPGRADE FALL RIVER ENTRANCE                 2,443,200          104          RMR            5            B
                                                    FACILITIES.
    ROCKY MOUNTAIN NP............................  REBUILD BEAR LAKE ROAD...............       4,752,000          324          RMR            3            R
    SAGUARO NM...................................  REHABILITATE TUCSON MOUNTAIN ROADS...       9,636,000          255          WER            3            R
    SAINT GAUDENS NHS............................  CONSTRUCT MAINTENANCE AND EXHIBIT           7,040,000         121A          NAR            5            B
                                                    BUILDING.
    SAINT GAUDENS NHS............................  PHASE II DEVELOPMENTS................       6,632,400         121B          NAR            1            L
    SALINAS PUEBLO MISSIONS NHP..................  CONSTRUCT ABO VISITOR FACILITIES.....       3,120,000          179          SWR            4            B
    SALINAS PUEBLO MISSIONS NHP..................  REHABILITATE ENTRANCE ROADS..........       1,188,000          173          SWR            3            R
    SALINAS PUEBLO MISSIONS NHP..................  CONSTRUCT GRAN QUIVIRA VISITOR              3,120,000          178          SWR            4            B
                                                    FACILITIES.
    SAN ANTONIO MISSIONS NHP.....................  IMPROVE HEALTH, SAFETY, VISITOR             3,111,000          190          SWR            3            B
                                                    SERVICES-SAN JUAN.
    SAN ANTONIO MISSIONS NHP.....................  REHABILITATE SAN JUAN MISSION               3,960,000          187          SWR            2            B
                                                    STRUCTURES.
    SAN ANTONIO MISSIONS NHP.....................  REHABILITATE PARKING AREAS...........         792,000          185          SWR            3            R
    SAN FRANCISCO MARITIME NHS...................  RESTORE ENDANGERED SHIP C.A. THAYER..      11,004,000          643          WER            2            B
    SAN FRANCISCO MARITIME NHS...................  REHABILITATE THREATENED HISTORIC            6,602,400          518          WER            2            B
                                                    MUSEUM BUILDING.
    SAN FRANCISCO MARITIME NHS...................  COMPLETE RESTORATION OF SAILING SHIP        3,144,000          635          WER            2            B
                                                    BALCLUTHA.
    SANTA MONICA NRA.............................  REHABILITATE DIAMOND X AREA                 1,572,000          331          WER            3            B
                                                    MAINTENANCE FACILITY.
    SANTA MONICA NRA.............................  RANCHO SIERRA VISTA RD/SATWIWA NAT AR       1,980,000          226          WER            3            R
                                                    (IN. PKG145.
    SANTA MONICA NRA.............................  REHABILITATE CIRCLE X CAMPGROUND            1,980,000          290          WER            3            R
                                                    ROADS.
    SARATOGA NHP.................................  REHABILITATE TOUR ROADS and WAYSIDES.       7,920,000          159          NAR            2            R
    SARATOGA NHP.................................  PRESERVE SARATOGA MONUMENT and SITE..       2,360,000          159          NAR            2            L
    SARATOGA NHP.................................  REHABILITATE ROADS AND PARKING.......         396,000          160          NAR            3            R
    SAUGUS IRON WORKS NHS........................  PRESERVE/REHABILITATE HIST.                 2,400,000          154          NAR            2            B
                                                    STRUCTURES and EXHIBITS.
    SEQUOIA and KINGS CANYON NP..................  REMOVE FACILITIES AND RESTORE GIANT         8,200,000          200          WER            2            L
                                                    FOREST.
    SEQUOIA and KINGS CANYON NP..................  COMPLETE WUKSACHI VILLAGE                  13,900,000          130          WER            2            U
                                                    INFRASTRUCTURE.
    SEQUOIA and KINGS CANYON NP..................  RECONSTRUCT GENERALS HIGHWAY.........      40,920,000          840          WER            3            R
    SEQUOIA and KINGS CANYON NP..................  CONSTRUCT/REPLACE LODGEPOLE HOUSING..      55,020,000          259          WER            5            H
    SEQUOIA and KINGS CANYON NP..................  REPLACE CEDAR GROVE BRIDGE...........       3,960,000          336          WER            3            R
    SEQUOIA and KINGS CANYON NP..................  PAVE GRAVEL SECTION AT MINERAL KING..       6,600,000          541          WER            5            R
    SEQUOIA and KINGS CANYON NP..................  RECONSTRUCT GENERALS HIGHWAY (PHASE        16,500,000          841          WER            3            R
                                                    II).
    SHENANDOAH NP................................  REPLACE TRAILERS/CONSTRUCT EMERGENCY       25,100,000          446          MAR            1            H
                                                    FACILITY.
    SHENANDOAH NP................................  REHABILITATE WATER/SEWER/FIRE SYSTEMS      11,800,000          455          MAR            1            U
    SHENANDOAH NP................................  REHABILITATE STORM-DAMAGED TRAILS....      12,000,000          456          MAR            2            L
    SHENANDOAH NP................................  REHABILITATE VISITOR FACILITIES......       4,800,000          457          MAR            3            L
    SHENANDOAH NP................................  RECONSTRUCT SKYLINE DRIVE............      29,040,000          125          MAR            3            R
    SHILOH NMP...................................  STABILIZE RIVERBANK..................       2,600,000          134          SER            2            L
    SHILOH NMP...................................  RESURFACE TOUR ROADS, INCL. SHOULDER        3,300,000          138          SER            3            R
                                                    and DRAINAGE.
    SLEEPING BEAR DUNES NL.......................  REHABILITATE STOCKING SCENIC DRIVE          2,215,200          210          MWR            3            B
                                                    FACILITIES.
    SLEEPING BEAR DUNES NL.......................  CONSTRUCT SCENIC ROAD................      23,364,000          120          MWR            4            R
    SOUTHWEST REGION.............................  REHABILITATE HISTORIC OLD SANTA FE          2,100,000          257          SWR            2            B
                                                    TRAIL BUILDING.
    SOUTHWEST REGION.............................  CONSTRUCT EMPLOYEE HOUSING AT 11            8,600,000          279          SWR            4            H
                                                    PARKS.
    STATUE OF LIBERTY NM.........................  COMPLETE HISTORIC SEAWALL                   2,944,000            2          NAR            1            L
                                                    REHABILITATION.
    STATUE OF LIBERTY NM.........................  STABILIZE 23 ELLIS ISLAND BUILDINGS..      12,000,000          163          NAR            2            B
    STATUE OF LIBERTY NM.........................  STABILIZE ELLIS ISLAND HAZARDOUS            3,600,000          161          NAR            1            L
                                                    MATERIALS.
    STEAMTOWN NHS................................  REHABILITATE PARK ROADS..............       3,960,000          900          MAR            3            R
    STEPHEN MATHER TRAINING CTR..................  REHABILITATE TRAINING CENTER COMPLEX.       4,462,000            1         WASO            3            B
    SUNSET CRATER VOLCANO NM.....................  CONSTRUCT MAINTENANCE COMPLEX........       1,680,000          152          SWR            5            B
    SUNSET CRATER VOLCANO NM.....................  REHABILITATE PARK ROADS..............       4,224,000          900          WER            3            R
    THEODORE ROOSEVELT NP........................  RECONSTRUCT/RESURFACE PARK ROADS.....      11,880,000          164          RMR            3            R
    THEODORE ROOSEVELT NP........................  CONSTRUCT FLOOD PROTECTION...........         607,200          108          RMR            5            L
    THOMAS STONE NHS.............................  FULL SITE DEVELOPMENT AND RESTORATION       7,080,000          108          MAR            4            L
    TIMPANOGOS CAVE NM...........................  CONSTRUCT VISITOR/ADMINISTRATIVE            7,605,000          135          RMR            3            B
                                                    CENTER COMPLEX.
    TIMUCUAN ECOL. and HIST. PRESERVE............  CONSTRUCT VISITOR FACILITIES FOR NEW        9,728,000          128          SER            4            B
                                                    AREA.
    TONTO NM.....................................  CONSTRUCT VIS. CTR. RESTROOMS and           1,065,000          138          SWR            3            B
                                                    WASTEWATER PLANT.
    TONTO NM.....................................  RECONSTRUCT ENTRANCE/PICNIC ROADS and       1,848,000          135          WER            3            R
                                                    PARKING.
    ULYSSES S. GRANT NHS.........................  PRESERVE/RESTORE GRANT HOME AND SITE.      10,900,000          100          MWR            2            B
    UPPER DELAWARE S&RR..........................  DEVELOP INITIAL PARK VISITOR FACILITY       9,000,000          123          MAR            4            L
    UPPER DELAWARE S&RR..........................  ROEBLING BRIDGE RECONSTRUCTION (PHASE       2,640,000          110          MAR            5            R
                                                    II).
    UPPER DELAWARE SCENandREC.RIVER..............  COMPLETE INITIAL FACILITIES                 5,760,000          130          MAR            2            B
                                                    DEVELOPMENT.
    VALLEY FORGE NHP.............................  REPAIR/REHABILITATE HIST. STRUCT./         13,200,000          202          MAR            3            L
                                                    COLLECTION STORAGE.
    VANDERBILT MANSION NHS.......................  PRESERVE VANDERBILT MANSION..........       8,200,000          139          NAR            2            B
    VIRGIN ISLANDS NP............................  RECONSTRUCT LAMESHORE ROAD...........       1,980,000         127B          SER            3            R
    VOYAGEURS NP.................................  CONSTRUCT VISITOR FACILITIES.........       3,865,000          159          MWR            5            B
    VOYAGEURS NP.................................  IMPROVE CRANE LAKE ROAD..............      13,860,000          219          MWR            3            R
    VOYAGEURS NP.................................  IMPROVE WEST KABETOGAMA ROADS........         660,000          220          MWR            3            R
    WEIR FARM NHS................................  PRESERVE STRUCT./PROVIDE INITIAL           14,594,400          102          NAR            2            B
                                                    SUPPORT FACILITIES.
    WEIR FARM NHS................................  REHAB PARK ROADS AND PARKING.........         132,000          102          NAR            3            R
    WHISKEYTOWN-SHASTA-TRINITY NRA...............  COMPLETE SOUTH SHORE ROAD PAVING.....       3,300,000          109          WER            4            R
    WHITE SANDS NM...............................  CONSTRUCT PARK HEADQUARTERS BUILDING.       2,160,000          109          SWR            5            B
    WHITE SANDS NM...............................  CONSTRUCT MAINTENANCE/STORAGE               1,800,000          128          SWR            5            B
                                                    BUILDING.
    WILSON'S CREEK NB............................  REPLACE DETERIORATING WASTEWATER            1,080,000          325          MWR            1            U
                                                    PLANT.
    WILSON'S CREEK NB............................  REHABILITATE MAIN ENTRANCE ROAD......         660,000          173          MWR            3            R
    WOLF TRAP FARM PARK..........................  ALLEVIATE HAZARDOUS TRAFFIC                41,184,000          208          NCR            1            R
                                                    CONGESTION.
    WOLF TRAP FARM PARK..........................  EXPAND RESTROOMS and CONCESSIONS.....       4,800,000          130          NCR            5            B
    WRANGELL-ST.ELIAS NP and PRES................  CONSTRUCT VISITOR CENTER/HEADQUARTERS       7,100,000        100GL          AKR            4            B
                                                    FACILITY.
    WRIGHT BROTHERS NM...........................  CONSTRUCT AUDITORIUM ADDITION TO           11,400,000          115          SER            5            B
                                                    VISITOR CENTER.
    WUPATKI NM...................................  REHABILITATE MTNCE. AREA--SUNSET            1,700,000          101          SWR            3            B
                                                    CRATER VOLCANO.
    WUPATKI NM...................................  REHABILITATE SEWER LAGOONS...........       2,222,000          192          SWR            1            U
    WUPATKI NM...................................  RECONSTRUCT MAIN LOOP ROAD...........       7,920,000          103          SWR            3            R
    YELLOWSTONE NP...............................  REPAIR/REPLACE DETERIORATED HOUSING..     100,000,000          817          RMR            3            H
    YELLOWSTONE NP...............................  REHABILITATE FISHING BRIDGE                36,000,000          813          RMR            3            L
                                                    CAMPGROUND AND MARINA.
    YELLOWSTONE NP...............................  RECONSTRUCT ROADS PARKWIDE...........     250,800,000          254          RMR            3            R
    YELLOWSTONE NP...............................  UPGRADE MADISON and NORRIS UTILITY          4,716,000          636          RMR            3            U
                                                    PLANTS.
    YELLOWSTONE NP...............................  IMPLEMENT LAKE DEVELOPMENT CONCEPT          4,800,000          821          RMR            3            L
                                                    PLAN.
    YELLOWSTONE NP...............................  ALTERNATIVE TRANSPORTATION MODES.....       1,320,000         2008          RMR            5            R
    YOSEMITE NP..................................  RESTORE VALLEY BY REMOVING/               137,900,000          504          WER            2            L
                                                    REDESIGNING FACILITIES.
    YOSEMITE NP..................................  UPGRADE FAILING SEWAGE AND WATER           10,500,000          383          WER            1            U
                                                    SYSTEMS.
    YOSEMITE NP..................................  REHABILITATE FAILING ELECTRICAL             8,100,000          473          WER            1            U
                                                    SYSTEM.
    YOSEMITE NP..................................  REPLACE LIFE SAFETY COMMUNICATIONS          5,502,000           44          WER            1            U
                                                    SYSTEM.
    YOSEMITE NP..................................  REPLACE/REHABILIATE OBSOLETE HOUSING.      31,440,000          651          WER            1            H
    YOSEMITE NP..................................  RELOCATE SOUTH ENTRANCE and MARIPOSA       31,152,000          140          WER            2            L
                                                    GROVE FACILITIES.
    YOSEMITE NP..................................  RECONSTRUCT GLACIER POINT ROAD.......      15,840,000          843          WER            3            R
    YOSEMITE NP..................................  RECONSTRUCT EL PORTAL ROAD...........      26,796,000          505          WER            1            R
    YOSEMITE NP..................................  REHABILITATE WAWONA ROAD.............      27,984,000          565          WER            3            R
    YOSEMITE NP..................................  RELOCATE/REMOVE HOUSING FROM VALLEY..      34,584,000           46          WER            2            H
    YOSEMITE NP..................................  RECONSTRUCT TIOGA ROAD...............      46,200,000          146          WER            3            R
    YOSEMITE NP..................................  ALTERNATIVE TRANSPORTATION MODES.....      26,400,000         2003          WER            5            R
    YUKON-CHARLEY RIVERS NPRES...................  REHABILITATE HIST. BLDGS. and               3,181,000        100CC          AKR            3            B
                                                    CONSTRUCT NEW FACILITIES.
    ZION NP......................................  CONSTRUCT EMPLOYEE HOUSING...........       8,634,000          178          RMR            3            H
    ZION NP......................................  REBUILD PARK ROUTE 7.................       2,508,000          210          RMR            3            R
                                                                                         ----------------
          Total..................................  .....................................   5,587,776,410  ...........  ...........  ...........  ...........
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Objectives:

    1 = Health and safety.
    2 = Resource preservation.
    3 = Repair/rehabilitation of existing facilities.
    4 = New facilities in a new/developing park.
    5 = Additional facilities in an older/established park.

    Work type:

    B = Buildings: Visitor, Park Support, et cetra.
    H = Housing: Permanent, Seasonal.
    L = Landscape Work, Site Restoration, et cetra.
    R = Roads: FLHP, Non-FLHP, Bridges, et cetra.
    U = Utilities: Water and Sewer Systems, et cetra.

        Question. I would also like to know the status of repair work
    necessary for Yellowstone and Glacier National Parks.
        Answer. Yellowstone National Park has a large backlog of repair
    needs due to its expansive and aging infrastructure. Repair work funded
    from park operations includes routine maintenance such as exterior
    painting of buildings, cleaning of drainage ditches, and the patching
    of potholes, that maximizes the life of an asset. Effective routine
    maintenance assumes each road, sewer system, bridge, or building is in
    a minimally acceptable condition. The repairs necessary to bring assets
    from poor condition to good condition are typically accomplished with
    project funding sources such as line item construction and repair and
    rehabilitation.
        Yellowstone housing is characterized by having only 40 percent of
    the units in good or better condition, and over 140 of the units were
    originally intended to be temporary structures. Three sewage systems
    are in extremely poor shape. The Norris geyser basin system failed and
    was shut down in 1995. The sewage plant at Old Faithful is subject to
    spills and is degrading the groundwater. The sewage plant at Madison
    can fail at any time. Up to $300 million is needed to bring the roads
    up to standards.
        Yellowstone management identifies the operational funding currently
    needed to properly maintain assets whose condition warrants proper
    maintenance at $4.5 million per year, and the non-recurring funding
    necessary to bring remaining assets to a reasonable standard at $300
    million for roads and $300 million for buildings and utilities:
        Glacier National Park's backlogged repair needs, estimated at $7.1
    million, are as follows:
      --Maintain and Repair Historic Buildings
      --Rehabilitate Lake McDonald and Headquarters Sewer System
      --Walton rehabilitation of 60-year old two bedroom log cabin and
            replacement of two trailers with two duplexes
      --Trail Brushing and Tread Repair for Visitor Safety
      --Repair Roof, Administration Building No. 295
      --Repair and Paint Headquarters Buildings
      --Stripe Centerline on Park Roads
      --Paint Interior/Exterior and Rehabilitate Drinking Water Tanks
      --Chip Seal Damaged Roads throughout Park
      --Rehabilitate St. Mary Visitor Contact Station
      --Rehabilitate Many Glacier Camptender's Cabin
      --Rehabilitate Swiftcurrent Lookout
      --Rehabilitate Scalplock Fire Lookout
      --Repair Rising Sun Caretaker's Cabin
      --Stabilize/Repair St. Mary Gas House
      --Rehabilitate Sewer Lines in Headquarters
      --Rehabilitate two Mission 66 Houses
      --Repair Headquarters Maintenance Buildings
      --Rehabilitate Coal Creek Patrol Cabin
      --Rehabilitate St. Mary Campground Septic System
      --Rehabilitate Avalanche Area in Conjunction with FlHP
      --Rehabilitate St. Mary Visitor Center Exhibits
      --Restore Historic Housing/Administrative District
      --Parkwide trail repairs
        In addition to the above, Glacier Park estimates that $96 million
    is needed for Going-to-the-Sun road repairs.
        Question. Would you provide this Committee with the scientific
    research that is presently occurring in our national parks? What is the
    system for peer review of this research and who conducts this peer
    review? Is this done on a national or local level?
        Answer. Scientific research presently occurring in or on behalf of
    units of the National Park System ranges through all possible field
    science disciplines from anthropology to zoology. Most of this research
    is sponsored by non-NPS entities, and much of it is sponsored by
    organizations that are not part of the Department of the Interior. For
    1995, about 1,702 individual research projects, excluding cultural
    resources, were conducted, 131 parks hosted one or more of these
    research projects, and the projects were distributed among the broad
    discipline groupings of biology (1,053 projects), physical sciences
    (417 projects), aquatic and marine systems (87 projects), social
    sciences (85 projects), and other (60 projects).
        I know that you have recently asked the National Academy of Science
    (NAS) for a technical report on the science on the bison in Yellowstone
    National Park. It is my understanding that you requested this report be
    completed and in your hands by October of this year. I have to wonder
    how you can expect a clean, thorough, and comprehensive report in this
    time frame, considering that NAS seeks to find consensus and goes
    through an intense peer review process before releasing the results of
    a study.
        Question. To what extent has the team working on the Draft
    Environmental Impact Statement (DEIS) on Yellowstone Bison moved
    towards the release of the DEIS by July 31, of this year?
        Answer. The EIS team is preparing the draft EIS with a team review
    of the draft to occur in late June 1997. Six alternatives have been
    identified and the team is completing the analysis of the effects of
    each alternative. The draft is expected to be completed by the end of
    June, is scheduled to go to the printer in early July, and scheduled to
    be distributed for public review by July 31.
        Question. I am extremely interested in what the process, timing
    etc., will be for a comment period and then decision on a final EIS for
    this purpose?
        Answer. At least a 60 day public comment period is scheduled. The
    agreement between the agencies calls for the Final EIS to be completed
    by January 31, 1998, with records of decision to be completed by March
    31, 1998.
        It has been suggested by your friends that the Natural Regulation
    Plan you have for Parks does not seem to be working.
        Question. With this in mind can you explain to the Committee how
    and why you continue with a failed policy of natural regulation of
    wildlife in Yellowstone National Park?
        Answer. The NPS does not agree that the wildlife management
    policies for Yellowstone have failed. There are currently populations
    of all native mammals in Yellowstone that were historically present and
    the adjacent States have active and successful hunting programs for
    many species. For example, the three States next to Yellowstone harvest
    an average of about 12,000 elk each year. These elk provide a
    tremendous outdoor recreational opportunity as well as a major economic
    benefit to the States surrounding the park. Yellowstone's northern herd
    of elk is the most economically important herd in Montana.
        Question. Mr. Secretary, have you seen the letter from the White
    House, dated April 24, regarding their plans for the bison in
    Yellowstone Park? Can you explain to the Committee the differences in
    your position and that which the White House has detailed?
        Answer. Yes, the Department has received a copy of the letter.
    There are no basic differences in positions. The alternatives being
    analyzed in the EIS all have aspects that ensure maintenance of a
    viable population of free-ranging bison, address bison population size
    and distribution, clearly define a boundary line beyond which bison
    will not be tolerated, address risk to safety and private property,
    protect livestock from risk of transmission of brucellosis, continue
    Montana's brucellosis class-free status, and address brucellosis in
    bison. The scope of this EIS is limited to bison management in
    Yellowstone National Park and adjacent areas of Montana. It does not
    address brucellosis in bison and elk throughout the greater Yellowstone
    area.
        As you know the Greater Yellowstone Interagency Brucellosis
    Committee (GYIBC) has been formed based on the Memorandum of
    Understanding between the Departments of the Interior and Agriculture,
    and the States of Montana, Wyoming, and Idaho. The GYIBC has 10
    objectives that have been agreed to including maintenance of free-
    ranging populations of bison and elk and to plan for the elimination of
    brucellosis in bison and elk.
        Bison cannot be the sole focus. The situation must be addressed in
    elk as well, particularly the large elk herds in Wyoming that are
    maintained on State and Federal feeding grounds during the winter and
    have a high prevalence of brucellosis. Technology does not currently
    exist to eradicate brucellosis in bison and elk without capturing and
    slaughtering hundreds and hundreds of bison and tens of thousands of
    elk for many years. Such a capture and slaughter approach will not
    guarantee success.
        As a result, management of risk is a key component of any
    management plan. Another key component is vaccination; however, there
    is currently no vaccine for bison or elk that is known to be both safe
    and effective. The vaccines developed for cattle do not seem to work
    well in bison or elk. Cooperating agencies are conducting extensive
    research to attempt to develop a safe and effective vaccine.
        Question. What is the reasoning and the process behind the cost of
    construction of housing units in our National Parks?
        Answer. The higher costs of housing construction in national parks
    as compared to private sector can be attributed to a number of factors,
    including remote locations, Davis-Bacon wage rates, the Buy American
    Act, requirements of the Small Business Administration Minority
    Business Enterprise Program, the Uniform Federal Accessibility
    Standards, the high first costs of energy efficient products mandated
    by the Energy Conservation Standards for New Federal Residences
    (10CFR435), and policies related to fire suppression equipment in
    Federally owned buildings. While it is often assumed that building on
    Federal lands should be less expensive because there are no land
    acquisition costs, the costs associated with environmental assessments
    required to comply with the National Environmental Policy Act (NEPA)
    and the various sections of the National Historic Preservation Act add
    significant costs to projects. Additionally, the costs of
    infrastructure not typically borne by private sector developers, but
    rather, paid for by property taxes, are an integral part of NPS housing
    costs.
        The goal of the Park Service is to provide adequate employee
    housing only in those park areas where it is absolutely needed. And
    where it is needed, this housing is to be comparable to market rate
    rental housing in the private sector, taking into consideration the
    high costs of service and maintenance in remote areas as well as the
    special needs of the employees who serve in these remote areas. The
    reasoning and the process behind the cost of construction of housing
    units in our national parks is embodied in two funding programs, 1) the
    Line Item Construction Program, and 2) the Housing Replacement Program.
    Each of these programs has a different manner of establishing
    priorities for project funding as discussed below, though the means for
    managing construction costs are similar in both programs.
        With regard to the Line Item Construction Program, the Denver
    Service Center of NPS responded to a 1997 Inspector General report on
    housing implementing an action plan to meet housing needs in a more
    cost effective manner. Key action items to be taken: conduct a value
    analysis at two stages in the process; utilize standardized housing
    designs and specifications whenever possible; and revise NPS Housing
    Guidelines (NPS-76) per the Government Performance and Results Act
    (GPRA), which will update requirements and assure Servicewide
    consistency of park housing. The Housing Replacement Program also
    recently instituted criteria and priority setting systems.
        The Omnibus Parks and Public Lands Management Act of 1996, section
    814, requires changes in the manner and methods of providing employee
    housing. Among these are the revision of the criteria under which
    housing is to be provided, the conduct of physical assessments of
    existing housing in all parks, the development of agencywide priority
    listings by structure, a study to determine the feasibility of
    providing eligible employees with a housing allowance rather than
    housing, and a study to examine the potential benefits and risks
    associated with the sale of Government housing to a cooperative made up
    of field employees. Most of these activities are in progress. Complete
    implementation of the Act may significantly change the way NPS houses
    employees.
        Question. As a follow up, I have to ask if you are aware that the
    cost of constructing a housing unit in Yellowstone National Park is
    double what it is to build a house in Bozeman, Montana, a mere 90 miles
    away in a high cost district within Montana?
        Answer. Construction costs in Yellowstone National Park are higher
    than costs in Bozeman. There are several expenses that are included in
    construction of a home in Yellowstone National Park that are frequently
    overlooked when comparing to the cost of a home on the commercial
    market. Circumstances related to the following components impact the
    final cost:
        Planning and Design: The planning for and design of houses in
    Yellowstone National Park is more complicated than that of houses in
    developed communities. The issues that must be addressed during this
    initial phase range from impacts on cultural and natural resources, to
    ensuring adequate accessibility, to minimizing the visual impact of
    homes on landscapes. This planning often requires time-consuming
    consultation with State Preservation Offices, particularly when
    historic areas will be impacted.
        Frequently, the costs associated with county planning and designers
    in non-park houses are recovered by taxes and impact fees and thus not
    included in the ``price'' of a house. Yellowstone includes the costs of
    these components when identifying the price of a structure.
        Basic Construction: Basic construction costs are more expensive in
    many national parks than in surrounding communities. The short
    construction season, transportation of material and employees, and the
    lack of adequate contractor housing all inflate these costs. By way of
    example, concrete delivered to the Old Faithful area in Yellowstone
    National Park costs $105 per cubic yard. The same concrete delivered in
    nearby Bozeman, Montana, is $65 per cubic yard.
        Construction equipment entering the park is pressure washed to
    prevent the spread of noxious weeds. New housing must also withstand
    snow weighing as much as 150 pounds/square foot and is designed to
    withstand zone four earthquakes (the same seismic zone as San
    Francisco). These stringent requirements, which must be applied to
    homes for Federal employees, are not necessarily applied to the
    ``comparable'' homes outside of the park.
        Utility Systems: Housing that can use existing utility systems is
    considerably cheaper than housing for which utilities must be provided.
    In many cases utilities are already in place in non-park
    municipalities.
        Landscaping/Revegetation: Unlike many non-park homes, the
    Yellowstone housing costs include the revegetation necessary to prevent
    erosion and minimize the visual impact on the surrounding landscape.
        Yellowstone National Park and NPS are working hard to reduce
    construction costs where we can and provide more cost-effective housing
    for our employees. The Omnibus Parks Act provides NPS with new
    authorities to expand housing alternatives, to rely more on the private
    sector to finance or supply housing, and to reduce the need for Federal
    appropriations for housing.
        As I have mentioned in my opening statement, the condition of roads
    is terrible in our Parks.
        Question. With this in mind, what is the current road construction
    budget like for the National Parks, and what to you foresee for the use
    of ISTEA dollars in our parks?
        Answer. The Federal Lands Highway Program (FlHP), which includes
    annual funding from the Highway Trust Fund for the Park Roads and
    Parkway Program, was created with enactment of the Surface
    Transportation Assistance Act of 1982. The primary purpose of FlHP is
    to provide a coordinated interagency program to address National
    responsibilities with regard to access to the Nation's Federal lands,
    as well as protection of the multi-billion dollar Federal capital
    investment in assets constituted by this extensive road and bridge
    infrastructure. The FlHP established a multi-year funding mechanism
    from Highway Trust Fund user fees generated by the Federal gasoline
    tax, and has provided for development of long-range transportation
    planning and goals that serve the needs of Federal lands. This allows
    local and State governments to concentrate on their own transportation
    responsibilities, but still reap the benefits of the travel and tourism
    generated by national parks and other Federal lands.
        There are some 8,000 miles of public park roads and more than 1,250
    bridges under the jurisdiction of NPS serving units of the National
    Park System. About 60 percent of these roads are paved. The current
    condition ratings of paved park roads are 38 percent ``good''; 22
    percent ``fair''; and 40 percent ``poor/failed''. Of the more than
    1,250 bridges in the National Park System, 35 percent are deficient. In
    1995, some $254 million in costs to visitors, employees, and the
    Government can be attributed to traffic accidents on the national park
    road system. The total current backlog of repair and rehabilitation
    needs for NPS roads and bridges exceeds $2.0 billion, based on Federal
    Highway Administration estimates. At the currently authorized FlHP
    level of $84 million, FHWA engineering analyses indicate that an
    additional one percent of park roads will continue to deteriorate to a
    ``poor'' or ``failed'' condition each year. Based on FHWA estimates,
    approximately $120-125 million annually is needed to reverse this rate
    of deterioration.
        Also, several major new construction projects, authorized by
    Congress, remain incomplete. These include the Foothills Parkway,
    Natchez Trace Parkway, Baltimore Washington Parkway, Chickamauga-
    Chattanooga Route 27 Bypass, and Cumberland Gap National Historic Park
    Tunnel. Currently there are no designated funds to complete these
    projects. It is estimated that $350 million is needed to complete these
    unfinished projects.
        In response to many years of funding shortfalls, and to maximize
    use of limited fiscal resources, NPS in cooperation with the FHWA are
    currently developing enhanced investment strategies using various
    management systems to influence future program focus. Factored into
    this strategy as a key component is the need to address the congestion
    and associated resource concerns that have become an increasingly
    serious problem in national parks. Alternative transportation modes
    need to be considered, where appropriate, to handle the rapidly growing
    traffic demands and to reduce the resource impacts associated with
    increasing numbers of visitors. A study on alternative transportation
    in parklands was submitted to Congress in 1994. A Presidential
    memorandum dated April 22, 1996, directed the Secretary of the
    Interior, in consultation with the Secretary of Transportation to
    enhance the access to and mobility in our Nation's parks. It is
    estimated that $5-15 million annually is needed to initiate a multi-
    year program of planning efforts and projects for alternative
    transportation systems in such parks as Yosemite, Yellowstone, Denali,
    Zion, and Grand Canyon National Parks.
        In summary, the Administration is requesting a total of $161
    million beginning in fiscal year 1998 under the Federal Lands Highway
    Program, subject to Congressional reauthorization of the program, which
    will be utilized to address National Park Service Road and
    Transportation needs as follows:
      --$120-125 million annually to prevent further deterioration of the
            paved park road and parkway infrastructure to ``Poor'' or
            ``Failed'' condition.
      --$25-35 million annually to complete construction of Congressionally
            authorized parkway projects.
      --$5-15 million annually to implement alternative transportation
            systems in selected parks.
        As you know, Interior has a number of agencies working in the
    Greater Yellowstone Area. Some Federal non-Interior agencies are also
    there. I'm not certain how much duplication of effort, focus on good
    science for management decisions and sharing of information and data
    there is.
        Question. I've been wondering if we could get a neutral party who
    could do some objective analysis involved with these agencies so that
    we can better discover, collect, process, and distribute information.
    I'd like to see some good scientific data which was available to all
    interested parties. I believe that Montana State University is a
    logical collaborator both because of its location and because of the
    expertise in resource disciplines which it has. Please comment.
        Answer. Processing and distributing technical information is an
    ongoing challenge for all resource managers. In addition to using its
    own information dissemination programs, NPS often seeks the assistance
    of other agencies, such as the Biological Resources Division of the U.
    S. Geological Survey, and the Fish and Wildlife Service. With the new
    Cooperative Ecosystem Studies Units requested in fiscal year 1998, NPS
    would collaborate with colleges and universities, as well as with our
    Federal partners, to compile, process, and distribute technical
    information. The NPS also has several partnerships with non-government
    information organizations to assist us in the dissemination of
    published information and making data available. Often data are
    available through NPS supported programs such as the GIS spatial data
    on the NPS ``homepage'' on the Internet and the prototype inventory and
    monitoring program.
        When the scientific issues become very complex or controversial, as
    is currently the case with bison, elk, cattle, and brucellosis in the
    Greater Yellowstone Area, NPS turns to the National Academy of Sciences
    to compile existing technical information and provide an independent
    assessment of the scientific implications of that information.
        With respect to Montana State University and the Greater
    Yellowstone Area, the University already has been an active partner
    with NPS and other Federal agencies in conducting and reporting
    research about the area. If the increase requested for the Cooperative
    Ecosystem Study Units is funded, the existing expertise of the
    University will give it strong potential to become a partner in any
    Cooperative Ecosystem Studies Unit that might become established for
    the region that includes the Greater Yellowstone Area.
        I have noticed the Parks for Tomorrow Plan, which your Department
    is planning, proposes regulations to place limits on National Parks
    over flights.
        Question. What kind of rule making is being drafted that would
    affect over flights of Glacier and Yellowstone National Parks?
        Answer. In response to the President's April 22, 1996 Memorandum to
    the Departments of the Interior and Transportation on the national park
    over flight issue, NPS and the Federal Aviation Administration have
    jointly established a ``National Parks Overflights Working Group,'' an
    advisory group composed of conservation and aviation interests who have
    until September 1997, to craft recommendations on what such a rule
    ought to look like. Until this group finishes its deliberations, the
    shape of the rule and how it would affect commercial sightseeing air
    traffic over Glacier and Yellowstone National Parks is unclear.
        Question. Is the Department scoping the public from those
    communities surrounding the parks on these proposals?
        Answer. The recommendations of this advisory group will be put into
    the form of a Notice of Proposed Rulemaking which will be used to
    solicit public comments from all affected parties.
        I would like also to commend NPS for the efforts they have made in
    preservation of the thousands of historic structures in the parks.
        Question. Is each Park responsible for prioritizing the
    maintenance/preservation schedule, or is there a general outline for
    determining priority? I am concerned about the deferred maintenance on
    the historic lodges and supporting infrastructure in both Yellowstone
    and Glacier.
        Answer. Each park is responsible for prioritizing the maintenance
    and preservation schedule for historic structures in the park based
    upon several factors including the level of significance of the
    structure, the condition of the structure, the location of the
    structure, the types and severity of deleterious impacts on the
    structure, and the usability of the structure. The weight of these
    factors is determined by the park in concert with their overall mission
    and available resources.
        Question. Would it be possible to allow the concessionaire a longer
    term so that they would be able to make the improvements and then
    capitalize that investment?
        Answer. Concession contracts are limited by statute to a maximum
    term of 30 years. However, experience has shown that long-term
    contracts are not in the Government's best interest. Therefore, 10 to
    15 year contracts are typical for larger operations with investment
    requirements.
        To determine an appropriate term, a financial analysis is performed
    prior to the issuance of any contract. One of the purposes of this
    analysis is to determine what length of time would be required for a
    concessionaire to earn a reasonable profit in relation to the capital
    invested and the obligations assumed. In contracts with significant
    construction requirements, an analysis of the present value of the net
    cash flows is performed and compared to industry averages. The proposed
    term of the contract is then adjusted until the projected returns fall
    within the industry average.
        Question. Could you please explain to the Committee what the
    Administrations Heritage Initiative will accomplish?
        Answer. The funds requested in the fiscal year 1998 NPS budget are
    to implement a program of heritage areas pursuant to the authorization
    contained in the Omnibus Parks Act of 1996. The requested funds will
    provide a program of direct grants to eligible heritage areas, as well
    as technical assistance.
                       minerals management service (mms)
        Mr. Secretary, I want to ask you about a proposal I understand MMS
    is making to do away with the current crude oil royalty valuation
    program.
        If I understand the proposal correctly, producers--including
    independents in Montana--would be expected to pay royalties on some
    price related to futures contracts on the New York Mercantile exchange
    instead of the price they actually receive for their oil. I also
    understand that, to set that price, MMS would require new data
    gathering and then a complex calculation of so-called ``differentials''
    to establish a price in Montana.
        Question. Has the Interior Department conducted a study estimating
    what it would cost MMS to implement and administer its proposed oil
    valuation scheme and what it would cost the affected States and oil and
    gas lessees to comply with that scheme and subsequent changes to it if
    the Interior Department were to adopt it as an interim final rule and
    then change it based on the information and experience it develops
    while the interim rule is in effect?
        Answer. In its Determination of Effect of Rule (DOER), MMS
    estimated the cumulative industry cost of submitting a proposed form to
    enable MMS to calculate location differentials at about $800,000
    annually. The MMS also estimated its total yearly cost to collect and
    analyze the data received, and publish resulting location
    differentials, at about $20,000 annually. As the DOER noted, there
    would also be undetermined up-front computer programming and other
    administrative costs to MMS and industry to make their computer systems
    conform with the proposed reporting requirements.
        The DOER estimated a yearly royalty increase of about $54 million
    resulting from the proposed rule. Among other impacts noted were
    pricing certainty and reductions in audit efforts. The DOER also noted
    that the rule would have no obvious negative effects on State or local
    governments because the proposed rule is expected to provide additional
    royalties to them without added cost.
        Finally, an interim final rule was only a possibility raised for
    comment in the preamble to the proposed rule. Even if an interim final
    rule were implemented, there would be no way to estimate costs of
    changing it until we knew what form the changes would take.
        Question. If it has conducted a cost study, what information, if
    any, did it obtain from States and oil and gas lessees in the course of
    its study?
        Answer. Members of the State and Tribal Royalty Audit Committee and
    the Western States Land Commissioners participated in the rulemaking
    effort on behalf of the States. States were thus kept informed of
    progress of the rule and expressed no concerns about implementation
    costs. In response to the December 1995 Advance Notice of Proposed
    Rulemaking (ANPR), many industry respondents said they could not
    participate in the rulemaking process because of various ongoing
    litigation regarding oil valuation. Thus, MMS received no direct input
    from industry on cost concerns while drafting the proposed rule.
        Question. Has the Interior Department prepared any kind of a study
    which estimates the cost of administering a program in which the
    government would take its oil inkind as an alternative to implementing,
    administering and complying with its NYMEX oil valuation scheme?
        Answer. The MMS has a study underway to evaluate both oil in kind
    as well as gas in kind. The MMS doesn't believe the entire oil royalty
    share would be taken in kind at any given time. There still would be an
    ongoing need for effective rules for valuing that portion of oil not
    taken in kind.
        Before MMS moved forward with a royalty on natural gas, they tested
    a pilot project on a payment inkind basis.
        Question. Would it not be just as sensible and prudent of the
    Department of the Interior to pilot test its NYMEX scheme before
    imposing such massive and radical change on our oil and gas producers?
        Answer. The concept of pilot testing normally has merit. But the
    overriding factor in pushing forward with a revised rule is to assure
    that a fair royalty return is realized on public oil resources. The
    existing regulations need modification, and MMS believes an index-based
    procedure (NYMEX or, in California, Alaska North Slope spot prices)
    will better assure proper royalty receipts. The MMS believes that
    further delay would result in loss of revenues to which the States and
    public are entitled. In fact, in response to the ANPR, some States
    commented that MMS should immediately put in place an interim, index-
    based rule.
                           general interior questions
        As you know, Whirling Disease is a special concern in Montana, for
    economic, recreational and other reasons. The Fish and Wildlife Service
    (FWS) has undertaken some internal research and activities to combat
    it. We also have the very effective National Partnership on Management
    of Wild and Native Cold Water Fisheries in Bozeman.
        Question. What are your plans for combating Whirling Disease in
    fiscal year 1998 and how can we effectively continue these important
    initiatives?
        Answer. In fiscal year 1997, FWS was appropriated $1.5 million for
    fish disease work with an emphasis on whirling disease. Of this amount,
    $600,000 has been directed toward the development of a National Wild
    Fish Health Survey and Data Base; $500,000 has been provided to the
    National Partnership for the Management of Wild and Native Cold Water
    Fisheries (Partnership) to support research aimed at combating and
    controlling whirling disease; $300,000 has been directed toward
    specific cooperative research projects related to whirling disease; and
    $100,000 has been allocated for on-the-ground whirling disease projects
    in Montana. The fiscal year 1998 President's Budget maintains funding
    levels of $1.5 million to continue efforts to control the spread of
    whirling disease and other fish diseases.
        The FWS will continue to take a variety of approaches to control
    the spread of whirling disease. The FWS is currently funding research
    to develop rapid, cost effective ways of detecting the parasite in both
    the fish and worm host. Other research is aimed at determining why the
    disease is problematic in some trout (and strains) and not others.
    Laboratory and field test are being conducted exposing different
    strains to the parasite to determine if there might be certain strains
    or species of fish that are less susceptible to the disease. If a
    resistant species can be found, fishery managers may have more options
    of managing around the disease in areas of special concern. The FWS
    also determines the health status of wild stocks nationwide, not only
    for the presence of whirling disease, but other dangerous pathogens as
    well. Therefore, FWS is developing a national database to share this
    information with all researchers and fishery managers so that they may
    have more options for controlling and protecting valuable stocks of
    fish. Mr. Secretary, you and I have opposite opinions of what the role
    of grazing on public lands is and should be. I feel that it is
    necessary for the future condition of our public lands, considering
    that we have greater numbers of wildlife than in years past, and that
    this land is in the best shape it has been in decades.
        Question. With this in mind, why is it that each and every agency
    within the Department has different rules and regulations on the lands
    that they manage?
        Answer. This Administration has placed emphasis on managing Federal
    land so as to improve the health of entire landscapes, with a
    coordinated management approach that often transcends jurisdictional
    boundaries. Nevertheless, the Department of the Interior agencies
    manage lands for different purposes, as required under land use laws
    and organizational missions established by Congress. For example, the
    BLM provides for multiple uses; these include resource consumption
    (e.g., grazing), and recreation, with no one use considered to be
    primary. The National Wildlife Refuge System is designed primarily to
    preserve land and water habitat to conserve living resources. Separate
    legislation directs the Park Service to preserve natural and historic
    resources and to provide for the public's enjoyment of its lands in
    perpetuity.
        Question. I would be interested in how many different proposed
    rules and regulations the Bureau of Land Management (BLM) and the other
    related agencies in the Department has put forth this year? How does
    this compare to previous years?
        Answer. The BLM has published 21 proposed rulemakings this fiscal
    year while the rest of the agencies in the Department have published
    82. These numbers are higher than for an average year because of the
    Administration's initiative to consolidate regulations.
        Question. What is the purpose of the Secretary issuing policy
    statements directly opposed to language placed in the fiscal year 1997
    appropriations bill regarding the rights-of-way issue or Revise Statute
    2477?
        Answer. By policy statements the Department understands the
    question to refer to a memorandum from Secretary Babbitt dated January
    22, 1997, in which interim guidance is provided in the absence of a
    final R.S. 2477 rule. This memorandum does not contravene the language
    in the Department's fiscal year 1997 appropriation that restricted
    development of an R.S. 2477 rule.
        One hundred and ten years after its enactment, the R.S. 2477
    statute that governs rights of way across public lands was repealed by
    the Federal Lands Policy and Management Act of 1976. The repeal did
    not, however, terminate already existing highway rights-of-way created
    under R.S. 2477. Two decades after its repeal, the profusion of
    unresolved claims still presents a planning and management problem for
    Federal land managers and other landowners, and uncertainty for
    potential right-of-way holders and users of public lands.
        On August 1, 1994, the Department published a proposed regulation
    to settle the controversy. The proposed regulation would clarify the
    meaning of important terms in R.S. 2477 and establish an administrative
    process for determining how many claims are valid and where they are.
    The comment period closed on August 1, 1995, after the Department
    received more than 3,200 comments. The Department did not finalize the
    regulations, since the fiscal year 1996 Interior Appropriations Act
    prohibited developing, promulgating, or thereafter implementing a rule
    concerning R.S. 2477. The fiscal year 1997 Interior Appropriations Act
    allowed the Department to work on R.S. 2477 regulations, but stated
    that no final rule or regulation pertaining to recognition, management
    or validity of rights-of-way pursuant to R.S. 2477 shall take effect
    unless expressly authorized by an Act of Congress.
        In the absence of a final rule, the Department issued the January
    22 statement to provide some broad guidance to BLM and the Department's
    other land managing agencies in handling right-of-way claims under R.S.
    2477. Such guidance was necessary given the ongoing confusion over
    unresolved right-of-way claims.
        The Administration has come out in the past few days and stated
    that they have reached an agreement with the members of the
    Congressional budget negotiations team on the issue of the Crown Butte
    Mine located in southern Montana.
        Question. What are the exact impacts that this agreement will have
    on Land and Water Conservation Fund projects currently in the budget
    process on the list of priorities within the Department?
        Answer. The agreement that was reached as part of the Bipartisan
    Budget Agreement calls for funding for the New World Mine project that
    will not have any impact on those projects identified as priorities in
    the President's fiscal year 1998 Budget. The funding requested for the
    New World Mine project is in addition to that requested in the
    President's Budget.
        Question. What is your understanding of where the EIS process is,
    related to the Crown Butte Mine?
        Answer. The New World Project EIS was halted as a condition of the
    New World Mine Agreement of August 12, l996. Crown Butte Mines, Inc.,
    the project proponent who was financing the preparation of the EIS, was
    a party to the Agreement. Specifically, Crown Butte Mines, Inc. placed
    its permit application into suspension and the Forest Service and the
    State of Montana, as joint leads on the project, accordingly ceased any
    further action.
        Question. Is it done and what are the scientific results of the
    process?
        Answer. The project was at the stage of a preliminary draft EIS
    when action was halted and therefore results of the scientific analysis
    were incomplete.
                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison
                               esa budget overall
        You seek additional funding for the Endangered Species Act (ESA)
    program of $11.4 million. The ESA has not been reauthorized, however,
    and is badly in need of reform. The ESA as presently implemented has
    failed to reach the goal of species recovery: no species has recovered
    primarily as a result of the ESA and most species claimed by the Fish
    and Wildlife Service (FWS) to have achieved 75 percent of their
    recovery objectives are not beneficiaries of successful ESA actions.
    Further, numerous species have been incorrectly listed as threatened or
    endangered and Government data is too poor to demonstrate a general
    trend that protected species have been assisted. Most importantly, the
    ESA as now implemented severely restricts the reasonable use and
    enjoyment of private property in violation of the Fifth Amendment of
    the United States Constitution.
        Question. Given these failures of the ESA, how can you justify
    increased spending for programs under the ESA, prior to reauthorization
    by Congress and necessary changes to the administration of the Act?
        Answer. To the contrary, the Administration believes that the
    current ESA is an effective and flexible tool for maintaining
    biodiversity for current and future generations while at the same time
    allowing responsible economic development to proceed. At the same time,
    the Administration is currently engaged in working cooperatively with
    the Senate Environment and Public Works Committee in aiding their
    efforts to reauthorize an even more effective Endangered Species Act.
        Over the past several years, the Administration has implemented a
    series of policies to improve the effectiveness of the ESA while
    enhancing its flexibility for businesses and private landowners. Full
    funding at the fiscal year 1998 President's Budget level of $78.8
    million for the endangered species program will allow economic
    development to continue while maintaining biodiversity.
        The Administration's March 6, 1995, announcement of Ten Principles
    For Federal Endangered Species Act Policy provides an overview of the
    Administration's approaches to minimize economic and social impacts on
    the economy, on private property, and the affected public. The Ten
    Principles are:
        1. Base ESA decisions on sound and objective science.
        2. Minimize social and economic impacts.
        3. Provide quick, responsive answers and certainty to landowners.
        4. Treat landowners fairly and with consideration.
        5. Create incentives for landowners to conserve species.
        6. Make effective use of limited public and private resources by
    focusing on groups of species dependent on the same habitat.
        7. Prevent species from becoming endangered or threatened.
        8. Promptly recover and de-list threatened and endangered species.
        9. Promote efficiency and consistency.
        10. Provide State, tribal, and local governments with opportunities
    to play a greater role in carrying out the ESA.
        The following section discusses key implementation actions which
    have struck the proper balance between economic development and
    biological diversity. Following this overview, an in-depth discussion
    of one of these actions--Habitat Conservation Plans--will provide
    further information.
        Candidate Conservation partnership efforts with Federal and State
    landowners and the private sector have been designed to avoid potential
    listings and litigation gridlock. Given the fiscal year 1998
    President's Budget request of $4.9 million for the candidate
    conservation program, FWS will be able to work on 292 actions.
        More is also being done with the use of Habitat Conservation Plans
    (HCP) to ease the regulatory burdens of the ESA on private landowners.
    The FWS estimates that it will work with 400 partners on HCPs given the
    fiscal year 1998 President's Budget request of $26.5 million for the
    consultation program thus demonstrating the flexibility of the ESA as
    it relates to the needs of private landowners. The Administration has
    produced concrete results with these HCPs. In the Pacific Northwest,
    the approved HCPs with State and private landowners cover over 4.2
    million acres in the States of Washington, Oregon, and California.
        Additional steps have been taken to provide landowners with
    certainty regarding potential future impacts of ESA actions. The ``no
    surprises'' policy assures private landowners participating in HCPs
    that no additional requirements will be imposed on plan participants
    for species covered by a properly functioning HCP.
        An HCP seeks to maintain adequate protection measures for species,
    while allowing for development activities. These plans often call for
    land protection or acquisition costs at the local level. The fiscal
    year 1998 President's Budget continues the Section 6 HCP land
    acquisition grants at $6 million to provide grants-to-states to augment
    and complement land acquisition required at the local level as a result
    of the HCP planning effort.
        The ``safe harbor'' program encourages landowners to voluntarily
    provide habitat for listed species. Under this program, private
    landowners with assistance from the FWS or with other qualified Federal
    or State agencies develop a management program to be carried out on
    their lands for the benefit of listed species. Based on such a program,
    a safe harbor agreement is entered into by FWS and the landowner. The
    FWS, in turn, will issue the private landowner a permit for the future
    take of listed species above the existing baseline conditions at the
    time of the agreement. Over 37 of these strictly voluntary agreements,
    mostly in the Southeast and the West, have been or are being developed.
    In the past year, for the Sandhill area of North Carolina alone, 18
    non-Federal landowners have been given safe harbor agreements and it is
    anticipated that an additional 15 will be developed this year.
        The Administration has also developed an innovative way to avoid
    placing a significant and unnecessary regulatory restraint on thousands
    of private landowners in the Pacific Northwest hoping for 4(d) rule
    relief. Implementation of the 4(d) rule for the northern spotted owl
    would relieve certain prohibitions on private lands within the range of
    the owl. The FWS expects landowners will participate more readily in
    conservation and recovery activities because of the relief provided by
    the 4(d) rule.
        The Administration plans to propose species for delisting and
    downlisting in fiscal year 1998. Up to 25 species will be evaluated for
    possible delisting in fiscal year 1998, provided the funding requested
    in the President's Budget is appropriated. The Administration strongly
    believes that the public is best served by removing species from the
    list of threatened and endangered species once recovery has been
    achieved. This results in a decreased cost and regulatory burden on the
    public and State and Federal agencies. To this end, FWS is working hard
    to recover as many species as possible in an expeditious manner. The
    FWS is responsible for both planning and implementing recovery actions
    for listed species, and accomplishing this recovery mission is
    contingent upon the funding in the fiscal year 1998 President's Budget.
    The result of successful recovery planning and implementation is
    downlisting or delisting species.
        The Administration has used the nonessential experimental
    population status to reintroduce both California Condors and grey
    wolves into the wild. This status permits greater management
    flexibility and helps to meet the concerns of private landowners. Both
    reintroductions are being carefully watched; but initial results have
    exceeded expectations.
        The HCP strategy was designed to reduce conflicts between
    endangered species conservation and other land uses on specific parcels
    of land. The overall program has worked very well; by the end of fiscal
    year 1996, FWS had issued 197 permits and 15 permit amendments. By the
    end of fiscal year 1998, given the increased funding requested in the
    President's Budget for the consultations program, FWS projects there
    will be 400 complete HCPs or HCPs in development. To put this in
    perspective, in 1992, only 14 HCPs were approved.
        The Administration has produced concrete results with these HCPs.
    For example, as of January 31, 1997, in the Pacific Northwest, the
    approved HCPs with State and private landowners cover over 4.2 million
    acres in the States of Washington, Oregon, and California. The FWS is
    currently working with the States of Washington and Oregon, the City of
    Seattle, Weyerhaeuser Company, Plum Creek Timber Company, Georgia
    Pacific, Louisiana Pacific, Murray Pacific, Arcata Redwoods, Simpson
    Timber Company, and many others in the development and implementation
    of HCPs.
        This program has been successful because the Department has forged
    strong partnerships with private, local, and State landowners to find
    innovative solutions that are biologically, economically, and
    politically feasible for all parties, and conserve listed species.
        The growth in HCPs is due to several factors, primarily the greater
    incentives that have been offered to landowners. Previously, the fear
    of new listings, the potential for additional mitigation measures, and
    the potential to have to redo a plan left landowners leery of entering
    into a long-term agreement. The Administration's new ``no surprises''
    policy (a deal is a deal except under extraordinary circumstances) also
    provides certainty to landowners and encourages them to come to the
    table to develop long-term contracts to protect Threatened and
    Endangered (T&E) species while allowing economic activities to proceed.
    The ``no surprises'' policy has been critical to the willingness of
    landowners to participate in the HCP process.
        Additional factors which have increased the use of HCPs and also
    benefits both wildlife and landowners include: the development of
    multi-species HCPs covering larger geographic areas; substantial
    process improvements detailed in a new user-friendly HCP handbook;
    vastly improved coordination between FWS, the National Marine Fisheries
    Service (NMFS), and other Federal parties; and a change in the FWS role
    from providing technical assistance only to full participation with
    landowners through all stages of the process.
        The HCP Land Acquisition Grants to States program provides grants
    for land acquisition at the local level for approved HCPs. The
    Department considers the states' use of Federal acquisition dollars for
    habitat protection within, and adjacent to, HCP areas to be an
    important and effective mechanism to promote the recovery of threatened
    and endangered species. These acquisition and land exchanges
    complement, not supplant, private and/or local government
    responsibilities required for mitigation related to implementing HCPs.
    Of the $6.0 million available for the program for fiscal year 1997,
    $2.75 million has been allocated as follows:
        Balcones Canyonlands HCP, Texas ($1.0 million): The BCCP is a
    regional HCP that protects 35 listed and candidate species, including
    the golden-cheeked warbler, black-capped vireo, and six invertebrates,
    among others.
        Orange County Coastal Central HCP, California ($0.5 million): This
    HCP covers the California gnatcatcher, peregrine falcon, southwestern
    willow flycatcher, and 34 other rare species.
        Volusia County HCP, Florida ($0.5 million): This plan protects
    three species of nesting sea turtles as well as piping plovers.
        Washington County HCP, Utah ($0.75 million): This HCP covers 34
    listed and candidate species, including the desert tortoise, peregrine
    falcon, and bald eagle.
        The remainder of the funds will be allocated later this year as FWS
    continues to evaluate project proposals. The fiscal year 1998
    President's Budget continues this program at the $6.0 million level.
                            conservation agreements
        In fiscal year 1998, you seek $4.9 million for candidate
    conservation agreements under the ESA. This amount, in addition to
    resources of States, local government, and private parties, represent
    very substantial commitments toward the protection of species. These
    efforts should be considered under the ESA in determining whether
    species should be listed as threatened or endangered and in developing
    recovery plans.
        Question. What steps does the Interior Department plan to take in
    order to ensure that candidate conservation and other similar
    agreements under which parties agree to manage resources to protect
    species, are considered when deciding whether to list a species?
        Answer. Successful candidate conservation partnership efforts with
    Federal and State landowners and the private sector have been designed
    to avoid potential listings and litigation gridlock.
        The FWS enters into voluntary candidate conservation agreements
    with one or more parties to remove the most significant threats thereby
    avoiding the need to list the species. States and private landowners
    support the program because it provides an opportunity to address the
    needs of declining species before they reach the point of listing. They
    can employ innovative approaches to species conservation without
    regulatory burdens that may be present for listed species and in ways
    that consider social and economic needs.
        Proposed listing rules for the following species were withdrawn as
    a result of successful candidate conservation agreements: Arizona
    willow; the Virgin Spinedace in Utah; southern population of the
    copperbelly water snake in Kentucky, Tennessee, and two plants from the
    Peninsular Ranges of southern California.
        Hundreds of conservation actions for candidates and species of
    concern have been conducted under candidate conservation MOUs with
    other Federal agencies as well as through the multi-agency Federal
    Native Plant Conservation Committee. Enforcement actions consist of FWS
    monitoring of the species and if candidate conservation agreements do
    not prevent a listing, they can form the basis of the Recovery Plan
    once the species is listed.
        Given the fiscal year 1998 President's Budget request of $4.9
    million for the candidate conservation program, FWS will be able to
    work on 292 candidate conservation actions in 1998 to reduce or remove
    the need for these species to be listed.
        Important research from the Biological Research Division of the
    U.S. Geological Survey (and other research from other reputable
    organizations) is also used to pinpoint potential ESA ``flashpoints''
    and help to develop solutions to keep these species from being listed.
        If the conservation efforts are not working, or if the species has
    declined to the point where listing may be necessary, the listing
    process would begin. In order to list (as well as to reclassify or
    delist a species), FWS must follow a strict legal process known as a
    ``rulemaking'' (regulatory) procedure. The rule is first proposed in
    the Federal Register and after a public comment period, FWS decides if
    the rule should be approved, revised, or withdrawn. The process can
    take up to a year, or longer in unusual circumstances, and encourages
    the participation of all interested parties, including the general
    public. In some cases, the ``trigger'' to begin the listing process
    originates in the courts or with concerned organizations or
    individuals.
        Once a species has been listed, every action is taken to improve
    protection and recovery of the species, while at the same time
    minimizing economic impacts, assuring fair treatment of landowners, and
    reducing delay and uncertainty through a variety of innovative
    initiatives, including multi-species HCPs and the ``no surprises''
    policy to allow economic development; streamlined review and approval
    of Federal actions; multi-species recovery plans; and the development
    of ``safe harbor'' agreements with cooperating landowners.
        Question. What steps does Interior plan to take to ensure that
    these agreements are considered when recovery plans are developed for
    species?
        Answer. Species are listed under the ESA solely on the basis of the
    best scientific and commercial data available regarding the status of
    the species. As discussed above, the listing process would only begin
    if the conservation efforts are not working, or if the species has
    declined to the point where listing may be necessary. Also discussed
    above, the initial candidate conservation agreement can provide the
    basis for a recovery plan. The current ESA provides flexibility with
    regard to recovery, and various policies recently implemented by the
    Administration, as well as increasing the role of stakeholders in
    recovery and focusing of Federal lands, will decrease the burden on
    private lands and work towards minimizing the economic effects of the
    ESA on private landowners.
        A new policy--part of the Administration's Ten Point Plan for ESA
    reform--significantly expanded recovery participation beginning in July
    1994. That policy directs that local jurisdictions, private
    organizations, and affected citizens be included in recovery plan
    development and implementation. Also, the public is invited to comment
    on draft recovery plans. These comments can supply important
    information about an affected community and can help to reduce or
    eliminate conflicts with listed species and their habitats. All
    comments are reviewed and addressed--if appropriate--in the final plan.
        Question. What plans do you have to defend such agreements against
    judicial challenges, where necessary to insure Interior will continue
    to meet its obligations under the agreements?
        Answer. The Department plans to defend candidate conservation
    agreements against judicial challenges to meet its obligations under
    the agreements.
                                     ______

                  Questions Submitted by Senator Byron Dorgan
                         Bureau of Indian Affairs (BIA)
                             education construction
        The Ojibwa Indian School, located on the Turtle Mountain
    Reservation, is in desperate need of a new permanent facility. There
    are severe safety deficiencies, asbestos, and structural problems in
    the school's three buildings. In fact, BIA decided in 1994 that these
    buildings, housing 150 students, had to be evacuated and the students
    relocated to temporary portable classroom units. Despite this
    emergency, Ojibwa School is not even on the BIA construction priority
    list. Even if it were, it could be years before a new school could be
    built and students could have the opportunity to learn in a safe
    environment. I find this situation abhorrent.
        Question. When does BIA project that the Ojibwa School will be
    included in the construction priority list?
        Answer. The Department is very concerned about the safety
    deficiencies in the Ojibwe School as well as in other BIA schools. Of
    the total backlog of BIA facility repair need ($890 million), over $680
    million is needed to bring the BIA schools in compliance with health
    and safety and other required codes.
        The Replacement School Facility list of 16 schools was approved by
    Congress in 1993. To date, only seven schools have been funded by
    Congress for construction. The list remains frozen until all the
    remaining schools are funded.
        The BIA requests funding increases every year for repair and
    replacement of schools. In fiscal year 1996 and 1997, Congress reduced
    the education construction program by one third below the request.
        The fiscal year 1998 request includes $49.2 million for Education
    Construction, $18 million over the 1997 enacted level. The request
    includes an additional $10 million to replace Many Farms School in
    Arizona and an additional $8 million to reduce the backlog of education
    facility repair need.
        The BIA is not currently able to project when Ojibwa School would
    be included in a new school construction list. If Many Farms is funded
    as requested in fiscal year 1998, there will remain eight of the 16
    schools on the present list to receive funding. If BIA receives annual
    funding for construction of two additional schools per year, it would
    take until fiscal year 2002 before the entire current list of 16
    schools are funded for construction. Therefore, the earliest that a new
    list would probably be developed is fiscal year 2001. When it is
    determined that a new list should be established, applications will be
    requested from the Tribes/schools, and using approved ranking criteria,
    BIA will determine the ranking order of the individual schools. There
    is no way of knowing where Ojibwa would rank in a national competition
    among schools.
        Question. What actions is BIA taking now or what actions does it
    intend to take in the immediate future to ensure that the severe
    education construction needs on Indian reservations will be met in a
    more timely fashion, either through creative financing mechanisms which
    would use existing construction and repair funding or other proposals?
        Answer. The Administration has requested $5 billion to address
    facility repair needs for public schools across the country. The
    proposal includes a two percent set-aside for the Department of the
    Interior. This is a step toward eliminating the backlog of repair.
        The BIA has examined alternative financing methods in the past.
    Given that lease arrangements, loans, and revenue bonds require
    repayment which is subject to appropriation, opportunities are very
    limited. In addition, many Tribes do not have revenue generating
    opportunities available to public schools.
        In the meantime, BIA continues to examine other options, including
    cost sharing with Tribes and debt servicing legislation that could
    circumvent budget scoring problems.
                            correctional facilities
        The need for additional correctional facilities in Indian Country
    far exceeds existing resources. For example, on the Fort Berthold
    Reservation, there are 3,000 arrests annually, but the jail facility
    that BIA leases only houses eight inmates. Due to this situation, there
    is essentially no deterrence to crime on the reservation. I am
    disappointed that, despite the substantial backlog in the construction
    projects, the fiscal year 1998 budget request contains only $9.1
    million to construct a single jail in Colorado for a Tribe that has
    been court-ordered to immediately address serious facility problems.
        Question. Can you explain in detail what steps BIA will take
    immediately to ensure that there are sufficient and adequate
    correctional facilities in Indian country?
        Answer. The BIA is quite concerned about the backlog of detention
    center facility repair and replacement need in Indian country.
    Unfortunately, as with schools, appropriations have been far short of
    need. Final funding from Congress for fiscal year 1996 and 1997 has
    been less than half of the President's Budget request for the Public
    Safety and Justice facility repair and replacement program.
        In fiscal year 1998, BIA is requesting $16.5 million for the Public
    Safety and Justice construction program, an increase of $12.1 million.
    The increase will fund construction of the Ute Mountain Ute Detention
    Center in Colorado; design of the Salt River Center in Arizona; and an
    additional $2.0 million for repair of existing facilities. The BIA
    would like to respond affirmatively that there is a plan which will be
    enacted to immediately ensure that we have sufficient and adequate Law
    and Order facilities in Indian country. However, as a result of a
    constrained budget, we have been unable to appreciably address the
    national list of 17 detention centers established years ago. Rather,
    our current plan is limited to addressing only those most imminent
    health and safety code and standards at the existing facilities on an
    annual basis. In this regard, the needs are established, prioritized,
    and addressed as funding becomes available.
        Question. Can you tell me what action BIA intends to take with the
    Fort Berthold situation?
        Answer. The Fort Berthold detention facility ranks 17th on the
    Detention Facility Replacement Priority List. In fiscal year 1996 and
    1997, BIA requested funds for the Ute Mountain Ute Detention Center,
    fifth on the List, but Congress did not appropriate the construction
    funds. The fiscal year 1998 budget request also includes funds to
    complete construction of the Ute Detention Center.
        As a result of the slow pace of funding, BIA presently predicts
    that it will take several years before construction begins at Fort
    Berthold. The BIA will provide repair funds to the extent that the
    funds are available, depending on the health and safety needs at Fort
    Berthold as compared to the needs at other facilities.
                               therapeutic model
        The North Dakota delegation wrote to you and OMB Director Raines to
    urge the Administration to provide additional resources for the
    therapeutic model program at the Circle of Nations School in Wahpeton,
    North Dakota. The fiscal year 1998 budget request contains no such
    additional dollars.
        Question. What steps will BIA take to allocate existing or new
    resources to ensure that the special educational, health, and
    psychological needs of the students at the Circle of Nations School are
    met and to ensure the creation of a viable model for other Indian
    educational institutions?
        Answer. The BIA provided additional funds to the school during
    fiscal year 1993 through 1995; the funds were used by the school for
    the therapeutic model program. Due to current fiscal constraints, BIA
    can no longer provide additional support to the school. The BIA
    allocates School Operations to all of the Bureau schools in accordance
    with a legislated distribution formula.
        The BIA staff will continue to work with the school to explore
    additional funding opportunities, including working with the Indian
    Health Service in implementation of the therapeutic model.
                        fish and wildlife service (fws)
        The FWS has for many years actively pursued the purchase of
    wetlands easements within the State of North Dakota. During this time,
    there has been a continuing frustration with the lack of flexibility
    that wetlands easements offer. Most recently, there have been law suits
    filed in the State by producers who had easements on their land. The
    law suits established that FWS had over-extended its interpretation of
    its easement authority.
        Question. What is FWS currently doing to develop a more flexible
    policy on wetlands easement purchases?
        Answer. The FWS policy regarding wetland easements in the prairie
    pothole region for Waterfowl Production Areas allows the FWS to acquire
    the minimum interest in private property that is necessary to
    perpetually protect the small pothole basins found throughout the upper
    Midwest. Landowners continue to own and exercise all other property
    rights.
        The WPA wetland easements protect the potholes from four types of
    threats; draining, burning, filling, and leveling. Any of these
    activities would destroy or diminish natural characteristics of basins,
    thereby reducing their value to migratory waterfowl and other wildlife
    species.
        Accordingly, the wetland easement program allows FWS to meet its
    Congressionally mandated requirement to protect prairie potholes from
    various threats, the greatest of which is drainage, while minimizing
    the affect of FWS acquisition on private enjoyment and use of property.
        The FWS has been extremely helpful in North Dakota in developing
    water storage areas in the Devils Lake Basin through their wildlife
    refuge system. However, the need is continuing to grow with Devils Lake
    expected to rise another six feet or more this year.
        Question. What further initiatives is FWS capable of undertaking in
    order to ensure not only the continued development of wildlife habitat
    in the basin, but also ensuring that the expansion of the lake does not
    completely eliminate water control structures and developed wildlife
    refuges.
        Answer. Currently, FWS has $3.1 million available from previous
    special appropriations to restore drained and expand existing wetlands
    on FWS lands in the Devils Lake Basin. With the continued rise of
    Devils Lake, 10 of the FWS facilities are threatened at Lake Alice
    National Wildlife Refuge and Sullys Hill National Game Preserve. The
    FWS is cooperating with local, State, and Federal efforts to develop a
    basin-wide water management plan and assist in other efforts to resolve
    flooding.
        With the additional work FWS in has taken North Dakota with regard
    to water storage on its lands to alleviate flooding at Devils Lake, I
    am concerned that they do not have adequate funding to properly manage
    these new areas of responsibility.
        Question. Do you plan to allocate additional operations and
    maintenance funding for the FWS in North Dakota for this purpose?
        Answer. Due to operations and maintenance funding priorities for
    the Refuge System both nationally and regionally, there are no plans in
    the President's Budget to increase operation and maintenance funding
    for FWS activities or refuge management in the Devils Lake Basin.
                         u.s. geological survey (usgs)
        North Dakota has been hit with a series of disasters this winter
    and spring. The highest snowfall this century followed by millennial
    flooding have devastated large areas of the State. The USGS has been
    particularly hard hit with many of their gages as well as their
    facilities in Grand Forks damaged.
        Question. Can you provide me an estimate of total damage
    assessments for USGS, what amount has been included in Public Law 104-
    208 (The Disaster Supplemental Appropriations and Rescission Act of
    1997) for USGS, North Dakota, and what is the unmet need for full
    repair and restoration of USGS in North Dakota?
        Answer. The funding included in Public Law 104-208 (The Disaster
    Supplemental Appropriations and Rescission Act of 1997) related to
    damages in North Dakota was $840,000:
      --$640,000--repair/replace 20 damaged/destroyed gages, including
            replacement of equipment.
      --$200,000--replace damaged/lost water quality laboratory equipment
            and computer equipment. Replace one lost vehicle.
        The USGS also received $4,650,000 in funding in Public Law 105-18,
    the second Emergency Supplemental Act of 1997 for recovery from natural
    disasters. There are no unmet needs or additional funding required for
    full repair and restoration of damaged, USGS equipment in North Dakota.
                          national park service (nps)
        The Lewis and Clark Expedition of 1804-06 traversed territory in
    what became 11 States, including North Dakota. Even before the
    Louisiana Purchase, President Thomas Jefferson was interested in
    exploring the territory west of the Mississippi to seek a water route
    to the Pacific and to learn more about the flora, fauna, and indigenous
    people who resided in the territory.
        In 1803, Congress approved an appropriation for an expedition to
    explore the area west of the Mississippi which was purchased from the
    French in the Louisiana Purchase. President Jefferson chose Lewis and
    Clark to lead the expedition. Their 18-month, 8,000 mile journey added
    immensely to our scientific, geographic, and cultural knowledge of this
    largely unexplored area of the United States. As I am sure the
    Secretary knows, the expedition spent its first winter in Mandan, North
    Dakota. As we approach the bicentennial celebration of this most
    remarkable of events in the annals of American history, I would like to
    ask a few questions.
        Question. What plans are currently underway within the NPS to
    support and promote the Bicentennial of the Lewis and Clark Expedition?
        Answer. The Lewis and Clark National Historic Trail is administered
    from Madison, Wisconsin. The superintendent and trail manager have been
    cooperating with and assisting the Bicentennial Committee of the Lewis
    and Clark Trail Heritage Foundation, our primary private sector
    partner, and the more recently formed National Lewis and Clark
    Bicentennial Council. We believe it is desirable for private sector
    organizations such as these to be the focal point for coordinating the
    bicentennial nationally across all levels. The NPS provided $45,000
    through a cooperative agreement this year to enable the organizations
    to hire a shared executive director. We plan to continue our
    cooperation with them. We will also continue our support as funds are
    available to do so.
        Through a limited amount of Challenge Cost-Share Program funds
    ($42,000 in fiscal year 1997), NPS is assisting State and local
    agencies in their efforts to protect sites important to the history of
    the expedition and provide educational information to the public
    through wayside exhibit signs and information brochures. We have
    developed and published a technical assistance document that provides
    information to cooperating interests on how to design, produce, and
    install interpretive signs.
        In regard to the Service's own participation in the bicentennial
    observance, we have formulated goals and objectives to guide the
    development of projects and programs at park units or that might be
    undertaken by the Lewis and Clark National Historic Trail
    administrative staff. A preliminary package of projects and programs is
    being built around those goals and objectives, along with funding and
    other resource requirements, for review by the NPS leadership.
        Five park units--Jefferson National Expansion Memorial, Niobrara/
    Missouri National Scenic Riverways, Knife River Indian Villages
    National Historic Site, Nez Perce National Historical Park, and Fort
    Clatsop National Memorial--are directly related to the history of the
    expedition. These individual units, as well as others along the trail
    route that are not directly related to the expedition, are working
    individually with local interests that want to plan for appropriate
    bicentennial events and projects.
        Question. What are your future plans relating to this event?
        Answer. The NPS plans to continue the cooperation with and
    assistance to the private partners, as resources allow, to enable them
    to continue the overall national coordinating role. The NPS will also
    continue to assist State and local interests in preparing for the
    bicentennial through on-the-ground development of interpretive
    facilities using Challenge Cost-Share Program funds.
        Enhancements under consideration include new or rehabilitated
    visitor center and wayside exhibits that reflect the latest research
    and scholarship on the expedition and its cross-cultural contacts, and
    a brochure focusing on the expedition, its scientific and geopolitical
    accomplishments, and implications for United States history would be
    produced and distributed nationwide during the bicentennial period. To
    adequately serve visitors, NPS hopes to be able to augment the level of
    seasonal staffing at targeted sites that might experience the largest
    increases in visitation during the years around the bicentennial.
        Question. How much funding has been allocated within the NPS budget
    for activities associated with the Expedition?
        Answer. The base budget for the Lewis and Clark National Historic
    Trail for fiscal year 1997 is $147,000. In addition, approximately
    $42,000 was allocated from the Challenge Cost-Share Program to assist
    cooperating State and local interests in the protection and
    interpretation of sites important to the history of the expedition. The
    five park units that are directly related to the history of the
    expedition have their own individual operational budgets.
        Although hundreds of events are being prepared all along expedition
    route and in nearby population centers, there are two major events
    associated with the bicentennial--a convention in St. Louis, Missouri
    at the beginning of the bicentennial festivities, and one in Mandan,
    North Dakota the following year.
        Question. Do you intend to allocate any funding to the Lewis and
    Clark Bicentennial Foundation in North Dakota to help with the major
    event being planned in my State?
        Answer. In fiscal years 1996 and 1997, NPS competitively awarded
    $3,000 to $4,000 to the National Lewis and Clark Bicentennial Council
    from the Challenge Cost-Share Program funds to assist the council in
    holding its annual planning conference. The NPS also assisted the
    sponsors of the annual Lewis and Clark Festival in Great Falls,
    Montana.
            interior department disaster estimates for north dakota
        Many other Department of the Interior facilities in North Dakota
    were also damaged as a result of disasters in North Dakota this year.
        Question. Can you provide me with a full accounting of all Interior
    Department facilities, equipment, etc., that were damaged by disasters
    in North Dakota this year?
        Answer. While we do not have a detailed list of equipment that was
    damaged, FWS, NPS, BIA, and Bureau of Reclamation (BOR) facilities and
    USGS equipment that suffered disaster damage in North Dakota in 1997
    are as follows:

                            NORTH DAKOTA STORM DAMAGE
                                 [Whole dollars]
    ------------------------------------------------------------------------
    Department              Facilities and equipment                Amount
    ------------------------------------------------------------------------
        USGRepair/replace 20 damaged/destroyed gages,             $640,000
            including replacement of equipment
           Replace damaged/lost water quality laboratory           200,000
            equipment and computer equipment. Replace one
            lost vehicle
         FWFlood damage at Long Lake, Tewaukon, J. Clark         9,358,000
            Salyer, Audubon, Arrowwood, Des Lacs, Devils
            Lake, Upper Souris National Wildlife Refuges; at
            Valley City National Fish Hatchery; and Valley
            City, Kulm, and Chase Lake wetland management
            districts
         NPRepair campground infrastructure/entrance roads/        210,000
            trails/seven miles of bison-proof fence at
            Theodore Roosevelt NP, Knife River NHS, Fort
            Union Trading Post NHS
         BIDunseith Day School                                      15,000
           Mandaree School                                          58,000
           Ojibwa School                                            17,000
           Trenton Indian School                                    10,000
           Turtle Mountain Elementary                               36,000
           Twin Buttes School                                       16,000
           White Shield School                                      14,000
           Wahpeton Boarding School                                742,560
         BOMuseum, University of North Dakota, Grand Forks         419,000
                                                              --------------
               Total                                            11,735,560
    ------------------------------------------------------------------------

        Question. How much of these amounts were covered in H.R. 1469?
        Answer. All amounts were covered in H.R. 1469 except for $604,560
    at Wahpeton Boarding School that was unknown at the time of the request
    to Congress.
        Question. What is the unmet need is for each?
        Answer. The unmet need of $604,560 at Wahpeton Boarding School is
    for roofing light buildings and the repair of campus streets and
    sidewalks.
                 government performance and results act of 1993
        The Government Performance and Results Act of 1993 (GPRA) directs
    Federal agencies to incorporate performance management by defining the
    agency's mission and establishing definitive goals and quantitative
    performance measures. The NPS planned to publish and distribute a
    revised strategic plan consistent with GPRA in the spring of 1997, and
    to issue an annual performance plan articulating the NPS goals and
    intended results in fiscal year 1998.
        Question. What is the status of the revised strategic plan? Is it
    available yet? If not, when do you anticipate its being published?
        Answer. The NPS anticipates publishing the strategic plan early
    this fall.
        Question. What performance measures will be incorporated in the
    first annual performance plan?
        Answer. The NPS strategic plan contains eight broad mission based
    goals, 31 long term goals, and numerous specific indicators that will
    be incorporated into its first annual performance plan. The mission
    based goals encompass, among other values, natural and cultural
    resource protection, visitor safety and enjoyment, educational,
    recreational and conservation partnerships, and improved management
    systems. Although too numerous and specific to list here, the long term
    goals and performance indicators will be fully incorporated into the
    agency's budget presentation that will be submitted to the Congress for
    the fiscal year 1999 budget cycle.

                             conclusion of hearings

        Senator Gorton. Thank you very much. Thanks for being here.
    The subcommittee will stand in recess awaiting the call of the
    Chair.
        [Whereupon, at 11:45 a.m., Tuesday, May 20, the hearings
    were concluded and the subcommittee was recessed, to reconvene
    subject to the call of the Chair.]

      DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 1998

                                  ----------

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

                           NONDEPARTMENTAL WITNESSES

        [Clerk's note.--The subcommittee was unable to hold
    hearings on nondepartmental witnesses, the statements and
    letters of those submitting written testimony are as follows.]
        [The statements and letters follow:]

        Prepared Statement of Audrey Gallery, Honorary Chairman, U-505
                             Restoration Committee

        Thank you, Chairman Gorton, for providing the U-505 Restoration
    Committee with the opportunity to submit testimony to your Subcommittee
    regarding fiscal year 1998 funding for the Department of Interior.
        I serve as Honorary Chairman of the U-505 Restoration Committee. I
    am the cousin of Captain Daniel V. Gallery, Commander of the Navy Task
    Force 22.3 which captured the U-505 submarine off the coast of West
    Africa on June 4th,1944, two days before D-day. As you may know, the U-
    505 is a type IX-C German submarine and is the only-man-o'-war captured
    at sea by the U.S. Navy since the War of 1812. The capture of the U-505
    enabled the Allies to break the German code. Within 60 days of its
    capture, all the German U-boats, nearly 900 of them, were disabled,
    thereby substantially hastening the end of the Battle of the Atlantic.
        Acquired by Chicago's Museum of Science & Industry (MSI) in 1954
    and viewed by 20 million people since then, the submarine serves as a
    memorial to the 55,000 Americans killed at sea during World Wars I and
    II. During a twenty-minute guided tour of the submarine and adjacent
    galleries, visitors get a taste of life on board, while also learning
    about the science of World War II submarine warfare. Unfortunately, the
    U-505's current resting place, outdoors in Jackson Park, has exposed it
    to dramatic changes in both temperature and humidity over the past 43
    years. As a result, the interior, hull, and deck of the submarine are
    deteriorating at an alarmingly rapid pace.
        Due to the national significance of this artifact, the U-505
    Restoration Committee was formed in 1996. The Committee's purpose is to
    assist MSI with its plans to restore the U-505 and relocate it to a
    climate-controlled facility next to the East Pavilion, thereby
    protecting it for future generations. MSI also plans to connect the U-
    505 enclosure to a $5 million exhibit opened in 1994 entitled Navy:
    Technology at Sea. This 10,000 square-foot gallery inside the East
    Pavilion helps visitors learn the scientific principles associated with
    navigation, communication, ship construction and operation, and
    underwater technologies.
        The new U-505 exhibit would continue a process that began in 1993,
    when MSI began transforming its exhibits into uncommon classrooms where
    families and children could learn the fundamental principles of
    science, technology, mathematics, and history. As part of MSI 2000, the
    Museum's strategic plan to transform itself into a stimulating, state-
    of-the-art educational institution, MSI has developed and opened six
    new permanent exhibits totaling around 30,000 square feet. It is
    estimated that because of these new exhibits, MSI's annual attendance
    grew by more than 100,000 visitors in less than three years.
        In 1989, the U-505 was designated a National Historic Landmark. It
    has been placed on the National Park Service's Priority 1 list of
    distressed objects. Since the submarine is threatened with impairment,
    funding for its restoration is authorized based on an amendment to the
    Historic Preservation Act of 1912 [16 USC 470a-e (1), (2) and (3)]. The
    amendment authorizes Congress to set aside funding within the National
    Park Service's Historic Preservation Fund for the restoration of
    facilities designated as National Historic Landmarks and threatened
    with impairment.
        The U-505 Restoration Committee and the Museum are seeking a one-
    time appropriation of $6 million, approximately half the cost of
    restoring, relocating, maintaining, and operating the U-505. The rest
    of the funds will be raised by private and local sources. The Museum
    has been solely responsible for the vessel since 1954 and has never
    before requested federal funds to restore or maintain it.
        Mr. Chairman, the U-505 Restoration Committee thanks you for the
    opportunity to submit testimony to your Subcommittee this year.

    ------------------------------------------------------------------------
                                                   1995            1996
    ------------------------------------------------------------------------
    National Science Foundation:
        Science Club Network (ESI-9154856)..        $236,530        $262,161
        Intergovernmental personnel
         assignment (ESI-9354157)...........          82,191          72,269
    Illinois Department of Transportation:
        Underground garage (D-4-017-112)....       3,258,689       6,819,823
        Auto safety exhibit (CP6-1051-147)..  ..............          54,767
    Illinois Department of Public Health:
        AIDS Education Program (95G81544)...          63,450           3,145
    ------------------------------------------------------------------------

                                     ______

       Prepared Statement of Hunter R. Rawlings, III, President, Cornell
      University, on Behalf of the Association of American Universities,
         American Council on Education, National Association of State
                      Universities and Land-Grant Colleges

        Mr. Chairman and members of the Subcommittee: I am Hunter Rawlings,
    president of Cornell University, a private land-grant university in
    Ithaca, NY. I am also a professor of classics, that is, Greek and Latin
    language and culture, and my particular interests are Greek history and
    Greek historians. It is my privilege to submit this testimony for the
    record on behalf of the Association of American Universities, the
    American Council on Education, and the National Association of State
    Universities and Land-Grant Colleges. Through their combined
    memberships, these associations represent all the public and private
    research universities in the country--institutions that educate large
    numbers of the nation's undergraduate and graduate students and conduct
    the bulk of the country's basic research and scholarship. I appreciate
    this opportunity to testify on their behalf in support of a fiscal year
    1998 budget of $136 million for the National Endowment for the
    Humanities (NEH).
        NEH grants make possible a wide range of cultural endeavors that
    can only be achieved with help and encouragement from the federal
    government. As the philosopher Charles Frankel said, ``Nothing has
    happened of greater importance in the history of American humanistic
    scholarship than the invitation of the government to scholars to think
    in a more public fashion, and to think and teach with the presence of
    their fellow citizens in mind.'' That role, since 1965, has been
    fulfilled admirably by NEH.
        The NEH is not a monolithic ministry of culture or an arbiter of
    public taste such as exists in some other countries. Rather it is a
    remarkably successful and cost-effective mechanism for engaging the
    public more fully in American culture, advancing knowledge, and
    revitalizing education while preserving aspects of our heritage that
    might otherwise be lost.
        Two characteristics of NEH support are particularly noteworthy:
        First, NEH sustains long-term collaborative projects such as
    bibliographies, encyclopedias, dictionaries and critical translations
    that are of national significance but that are unlikely to be funded by
    any single state or institution. Cornell University, for example, in
    cooperation with eight other land-grant university libraries, has
    received NEH support for a two-year project to preserve the most
    significant published materials on the history of state and local
    agriculture and rural life. This rich literature traces agriculture as
    it evolved from a home and family way of life to the business
    enterprises of today. In this project, approximately 6,819 volumes
    published between 1820 and 1945 will be preserved from Alabama,
    California, Connecticut, Florida, Nebraska, New York, Pennsylvania,
    Texas and Wisconsin. Cornell and its collaborators hope to extend their
    work to all 50 states. Their ability to continue the work could be
    jeopardized, however, by budget reductions at NEH.
        Similarly, in 1995, Cornell began the microfilming, cataloging, and
    conservation treatment of its 32,000-volume Fiske Icelandic Collection,
    also with the help of NEH. The Fiske collection contains virtually
    every publication issued in Iceland or written in Icelandic before
    1930, including the first book printed in Icelandic, a New Testament
    published in 1540. One of the premier collections in the world, it is
    essential to the study of the medieval period and attracts scholars
    from throughout the nation and abroad.
        Additionally, an NEH planning grant is helping fund a traveling
    museum exhibit, ``Up the Road on the Season,'' tracing how migrant farm
    labor emerged in the agricultural economy of the northeastern United
    States and how it has figured in the system that has supplied Americans
    with food. The project is enabling Cornell to connect the arts with the
    land and museum lovers with the people who work the land, to link some
    of the best aspects of our diversified American culture, and to bring
    them to citizens throughout the Northeast.
        The second distinctive characteristic of NEH grants is their
    ability to leverage state, local, and private philanthropic investment
    and increase public engagement with the humanities. The imprimatur of
    NEH funding, awarded on the basis of merit as determined by rigorous
    peer review, has a multiplier effect, increasing public participation
    in humanistic endeavors and attracting additional funds. At Cornell,
    NEH's ``Leadership Opportunities in Science and Engineering Education
    Program,'' administered jointly with the National Science Foundation,
    has enabled our Department of Science and Technology Studies to develop
    four undergraduate courses that are a key part of what we believe is
    the most innovative, wide-ranging and rigorous curriculum in humanistic
    and social studies of science and technology in the country. Similarly,
    one of Cornell's most successful archaeology projects, the Aegean
    Dendrochronology Project, has used NEH gifts-and-matching support to
    generate 4,721 contributions from 816 private individuals. This
    partnership of public and private funding ensures that limited
    resources support work of the greatest promise and make it available to
    the greatest number of Americans.
        Mr. Chairman, we recognize the extraordinarily tight fiscal
    constraints under which the Interior Appropriations Subcommittee has
    operated in the past few years and will operate this year. In fiscal
    year 1997, the NEH budget was set at $110 million, an amount
    approximately 36 percent below its fiscal year 1995 level and well
    beyond reductions sustained by most federal agencies. NEH already has
    implemented a major restructuring that has resulted in a reduction of
    NEH's divisions from six to three, a reduction in programs from thirty-
    one to nine, as well as the laying off of almost 40 percent of the NEH
    staff.
        The fiscal year 1996 and 1997 budget cuts at NEH have greatly
    constrained the productivity of the NEH/university partnership, and
    they have disproportionately affected the national programs account,
    which has been reduced by 60 percent since fiscal year 1995. The
    programs and research projects within this division of NEH are unlikely
    to be funded by any individual state but will substantially benefit the
    entire nation. They include preservation of brittle books and
    newspapers and those that assist scholars in producing authoritative
    editions of the papers of America's great leaders so that they can be
    accessible to all Americans, from legal scholars, to political
    scientists, to school children. The impact of these cuts, and others,
    is illustrated by the examples below:
        Brittle books and newspapers.--As a result of the fiscal year 1996
    budget cut, NEH was unable to fund projects that would have preserved
    20,000 brittle books. In addition, 230,000 disintegrating pages of
    newspapers will not be saved due to the funding reduction. Without NEH
    assistance, libraries will be forced to revert to a more parochial
    preservation role, caring only for those collections of direct interest
    to the immediate institutional community.
        Papers of leading Americans.--The completion of scholarly editions
    of the writings of U.S. Presidents and other major historical figures
    has been put at risk by the funding levels of the past two years. Among
    the compilations that may not be completed are the papers of George
    Washington, Thomas Jefferson, Dwight Eisenhower, and Thomas Edison. In
    addition, NEH is now funding significantly fewer grants that support
    scholarship, which uncovers new information and expands our knowledge
    base.
        Summer Seminars for Teachers.--Many colleges and universities,
    including my own, host summer seminars for high school and college
    teachers, who are given the opportunity to study with leading scholars
    in their fields. The workshops generate renewed enthusiasm and new
    knowledge among the participants which are then transferred to students
    around the country. In the summer of 1995, this program supported
    seminars and institutes attended by more than 2,600 high school and
    college teachers, who teach approximately 425,000 students a year. The
    fiscal year 1996 budget cuts have meant that 1,400 fewer high school
    and college teachers participated in these workshops.
        Support for Young Scholars.--Among the programs that have been
    eliminated are several devoted to helping young scholars complete the
    Ph.D. and establish their careers. These include the dissertation grant
    program, which provided one year of dissertation support for the most
    promising Ph.D. students in the humanities, enabling them to complete
    their degree during what is the most difficult time for humanities
    Ph.D. candidates to support themselves financially.
        Because of the positive contribution that NEH makes to our society,
    we urge the Subcommittee to support the Administration's fiscal year
    1998 budget request of $136 million, which would allow the agency to
    recover some ground lost over the past two years. We note that this
    would still be a 21-percent reduction from the fiscal year 1995 funding
    level.
        NEH has been the single most important source of support for
    humanistic endeavors in the United States for a generation. It has
    become an important national resource. It has allowed Americans, to
    borrow the words of Pericles, the ancient Athenian leader, to ``value
    culture without extravagance and knowledge without self-indulgence.''
    We believe it is in the national interest to continue funding NEH. We
    very much appreciate the Subcommittee's longstanding, bipartisan,
    support for NEH, and we urge the Subcommittee to support the $136
    million budget request.
                                     ______

        Prepared Statement of Robert H. Knight, on Behalf of the Family
                                Research Council

        In 1995, Congress voted to phase out funding for the National
    Endowment for the Arts. Many congressmen voted for funding in fiscal
    1996 and 1997 with the express stipulation that the subsidies would
    end; no money was to be appropriated for 1998. From 1995 through 1997,
    the agency was supposed to be developing alternative funding sources.
         Now, some in Congress are seeking to break the agreement by
    appropriating more funds for the agency. They appear to be bending to
    pressure from arts groups whose members receive federal subsidies. If
    Congress caves on the agreement, it would constitute a betrayal of
    those congressmen who agreed to the compromise. And worse, it would be
    a betrayal of American taxpayers.
        Begun in 1965 as part of Lyndon Johnson's Great Society government
    expansion, the NEA was supposed to raise the level of artistic
    excellence and promote a wide variety of art. The agency's budget
    reached a high of $176 million in 1992 and was slated for $99 million
    in fiscal 1997. Although the NEA has funded many worthwhile programs
    around the nation, it has also managed to create an unbroken record of
    special favors and embarrassments. Year after year, the NEA has doled
    out money to ``shock artists'' who produce obscene, anti-family and
    anti-religious works.
        At funding time, NEA defenders pledge to reform the agency, but
    this never happens. In 1989, Congress passed a law requiring the NEA to
    withhold funding from pornographic projects, but a federal court later
    struck it down. That opened the way for the NEA to continue disbursing
    questionable grants.
        Some NEA defenders say that the unpalatable grants count for only a
    small share of NEA-funded projects. This may be true, as far as the
    most objectionable, but it is also misleading. Government subsidies,
    even with the best intentions, are dangerous because they skew the
    market toward whatever the government grant-makers prefer. NEA grants
    place the stamp of official U.S. Government approval on funded art.
    This gives the endowment enormous power to dictate what is regarded as
    art--and what is not. This power was never envisioned by the nation's
    founders when they limited the federal government to a few very
    specific duties in the Constitution.
        As has been noted by NEA Chairman Jane Alexander, ``When we give
    the grant, everybody has to fall in line with what our requirements
    are: That's a given.'' If a private donor is going to match NEA funds,
    ``they are going to match what our panel has approved,'' she said.
    ``We're the driving engine.'' \1\ Alexander also has noted, ``for every
    dollar we award we leverage 11 to 20 from other public and private
    sources in a community.'' \2\ Private giving for art has reached more
    than $9 billion annually.\3\ Given the tremendous availability of
    private funding, why should taxpayers be forced to contribute to a
    bureaucracy devoted to its own tastes?
        How has the NEA used this enormous power? It has consistently:
    Paved the way for child pornographers' lawyers to claim in court that
    their works fall under the ``artistic'' merit defense, based on
    comparisons to NEA-funded works; rejected grants from artists working
    in traditional themes or mediums; discriminated against art with
    religious themes--unless the art demeans religion;cultivated a singular
    artistic style--avant-garde--in violation of the NEA charter which
    forbids the NEA to ``impose a single aesthetic standard or attempt to
    direct artistic content;'' \4\ continued to fund pornographic artworks,
    films and venues that stage obscene ``performance art''; discriminated
    against some geographic areas in favor of others such as New York,
    California and Minnesota; and promoted the splintering of America into
    identity groups.
        Los Angeles Times arts critic Jan Breslauer charges the NEA with
    abusing the concept of multiculturalism by funding works based on the
    identity of the artist, not on the merit of the project. In The
    Washington Post, Breslauer writes: ``The problem with the NEA isn't the
    funding of a few controversial artists. It is systemic. For while the
    NEA's right-wing foes have been railing against the chimera of
    obscenity, the endowment (along with, since the late 1980s, many
    private arts funders) has quietly pursued policies rooted in identity
    politics--a kind of separatism that emphasizes racial, sexual and
    cultural differences above all else. The art world's version of
    affirmative action, these policies * * * have had a profoundly
    corrosive effect on the American arts--pigeonholing artists and
    pressuring them to produce work that satisfies a politically correct
    agenda rather than their best creative instincts.'' \5\
        In addition to aiding the pigeonholing of art, the NEA's stamp of
    approval has impeded the prosecution of people whose business is not
    art at all. In testimony before the House Interior Appropriations
    Subcommittee on March 5, Patrick Trueman, former Chief of the Child
    Exploitation and Obscenity Section of the U.S. Justice Department,
    said, ``Much of what we prosecuted * * * involved material of the same
    nature as that funded through the years by the NEA * * * I submit that
    the NEA poses a direct threat to the prosecution, on both the federal
    and state levels, of obscenity and child pornography crimes.'' \6\
        Trueman noted that the NEA's stamp of approval is often enough to
    provide a defense of pornography based on ``artistic merit.'' He said,
    ``It would be difficult if not impossible to keep from a jury a defense
    argument that the material charged is not child pornography at all but
    rather `art' because the NEA has provided funding for its production or
    distribution. The threat that the NEA poses in the prosecution of
    obscenity and child porn cases is not merely hypothetical. The
    difficulties I have outlined in this regard were faced by the U.S.
    Department of Justice during my years in the criminal division with
    respect to the funding by the NEA of an exhibit by the late Robert
    Mapplethorpe.'' \7\
        Over the years, the NEA has funded numerous forms of sexual
    debauchery in sculptures, paintings, films, theater, ``performance
    art,'' and other media. The NEA also helped fund a 1994 film, One
    Nation Under God, that grossly misrepresents Exodus International and
    other ministries that help people overcome homosexuality. Other NEA-
    funded projects have directly attacked Roman Catholicism, evangelical
    Protestants, and depicted Jesus Christ as a drug addict and a sex
    object.\8\
        Here are some recent works funded by the NEA:
        Inside the visible.--A museum collection of feminist visual art and
    sculpture, it includes a video depiction of a naked woman on a mattress
    in various revealing poses and sculptures containing dozens of penises,
    some of them wrapped around a hat. The NEA awarded $20,000 to the
    Institute of Contemporary Art in Boston to support the DocentTeens
    program starting in January 1996, which included giving more than 20
    tours of ``Inside the Visible.''
        It's elementary.--This 78-minute film shows teachers and homosexual
    activists acquainting schoolchildren with homosexuality. It includes a
    scene in which a fifth-grader explains how the Nazis used pink
    triangles to distinguish homosexuals from other prisoners. A classmate
    then explains, ``Some Christians believe that if you're gay, you'll go
    to hell, so they want to torture them and stuff like that.'' The
    remark, which implies that Christians are the same as Nazis, goes
    unchallenged. ``It's Elementary'' was supported partly by the Portland
    Art Museum's Northwest Film Center, which received a $13,000 NEA grant
    in 1996.
        Women Make Movies, Inc.--This group, which has received a total of
    $112,700 in NEA grants from 1994 to 1997,\9\ has produced nearly 100
    videos with graphic sexual content, such as Watermelon Woman, which
    includes an explicit lesbian sex scene,' Unbound, in which ``sixteen
    women * * * free themselves from societal definitions, stereotypes--and
    the prison of the bra * * * breaks through the constraints of
    traditional move making and the censorship of women's bodies.'' \11\
    The group's catalog also features Age 12: Love with a Little L, by
    Jennifer Montgomery, which is described as a ``vivid reconstruction of
    lesbian identity * * * a riveting amalgam of forbidden desire * * * . A
    Village Voice reviewer calls Age 12 ``playful, aggressive and
    unashamedly erotic.'' \12\ The catalog also includes films dealing with
    incest, sado-masochistic sex, oral sex and highly political topics with
    titles such as Keep Your Laws Off My Body and Daughters of Dykes.\13\
        By contrast, the Shakespeare Festival/LA has thrived without ever
    having received any NEA grants. Founded in 1985 by out-of-work actor
    Ben Donenberg, the theater festival staged Twelfth Night in a downtown
    square during its first year. The success of that production, which
    included an audience of homeless men and women, spawned the festival's
    ``Food for Thought'' admission policy, in which canned food for the
    homeless is accepted for payment of tickets. In this way, some $1
    million in food has been donated to the Salvation Army. Donenberg also
    created a youth program to bring Shakespeare into the public schools,
    particularly in minority areas, and widened his following by staging
    productions in different locales. The festival attracts grants from
    major corporations and hundreds of individuals. ``There's always a way
    to raise money,'' he told a reporter. ``If the leadership is there, you
    can get it.'' \14\
                                   conclusion
        In a time of high taxes and swollen government budgets, when many
    families are hard-pressed to live on one (or even two) incomes, it is
    indefensible to use tax dollars to fund government-dictated art. Why
    should a young family struggling to make ends meet be forced to Find
    Watermelon Woman when, for them, going to a decent movie is a rare
    treat? Congress should abide by the agreement reached in 1994 to allow
    the NEA to pass into history and allow the marketplace to continue to
    support the arts, free from government intrusion.
        Robert H. Knight is Director of Cultural Studies at the Family
    Research Council, a Washington-based research and education
    organization. Mr. Knight, a former Los Angeles Times news editor and
    writer, wrote and directed a video documentary on Alfred C. Kinsey
    titled The Children of Table 34.
                                    endnotes
        1. Quoted in Jan Breslauer, ``The NEA's Real Offense: Agency
    Pigeonholes Artists by Ethnicity,'' The Washington Post, March 16,
    1997, p. G-1 at 8.
        2. Letter from Jane Alexander to Rep. Sherwood Boehlert (R-NY),
    June, 1994.
        3. Giving USA 1994: The Annual Report on Philanthropy for 1993,
    AAFrc Trust for Philanthropy.
        4. National Endowment for the Arts, Application Guidelines fiscal
    year 1990, p. 1.
        5. Breslauer, op. cit., p. 1.
        6. Testimony of Patrick A. Trueman, Director of Governmental
    Affairs, American Family Association, before the Interior
    Appropriations Subcommittee on March 5, 1997.
        7. Ibid.
        8. For a list, see Robert H. Knight, ``The National Endowment: It's
    Time to Free the Arts,'' Insight IF95AICU, Family Research Council,
    June, 1995.
        9. NEA grants summarized in letter from Rep. Pete Hoekstra to NEA
    Chairman Jane Alexander on February 13, 1997.
        10. Women Make Movies 1997 25th Anniversary Film & Video Catalogue.
        11. Ibid, p. 22.
        12. Ibid, p. 25.
        13. Ibid, p. 30.
        14. Laurence Jarvik, ``Why Does a Los Angeles Theater Company
    Produce Shakespeare for the Homeless?'' Culture Watch, Capital Research
    Center, Vol. II, No. 3, March 1997.
                                     ______

    Prepared Statement of Dr. Thomas E. Linehan, President, Ringling School
    of Art and Design, on Behalf of the Association of Independent Colleges
                               of Art and Design

        Mr. Chairman and Members of the Subcommittee, I submit this
    testimony on behalf of the Association of Independent Colleges of Art
    and Design (AICAD) and recommend funding the National Endowment for the
    Arts (NEA) at $136 million for fiscal year 1998. AICAD represents the
    free-standing, degree-granting, accredited colleges of art and design
    in this country. Our 32 member schools enroll 50,000 students from all
    50 states, employ 8,000 artists and designers, and have combined
    operating budgets of more than $475 million.
        While most of our members have received grants from the NEA, all of
    our members believe in the importance of the NEA and its significant
    federal role. The endowment performs the important role of convener and
    creates the opportunity for national committees to reach a consensus
    relating to arts initiatives.
        Many of these initiatives address the opportunities and threats of
    our times. For example, American science and technology has captured
    the world market advantage in computer graphics, animation and
    communications. Each of our member schools are providing instruction to
    artists, designers, and filmmakers in computer imaging. A small federal
    initiative through the National Endowment for the Arts can turn
    America's technology advantage into a design and communications
    advantage as well. The technology advantage was created through the
    support of the National Science Foundation.
        The design advantage in the world marketplace can be secured
    through the support of the National Endowment for the Arts. The media
    arts and the design arts have a severe shortage of design talent that
    can work with advanced imaging technology. We have given our engineers
    and scientists the computing power tools of the next century. Let's now
    develop a talented pool of performing artists, media artists and
    designers who can utilize these same tools.
        Formal art teaching in America began out of a commercial need for
    artists to work in the textile mills of New England. The United States
    had a serious balance of payments problem in its trade with England and
    France. To make the local textiles more attractive to the American
    markets, we called upon American artists and designers to develop
    uniquely American designs--ones which would keep the textile dollars at
    home. It worked.
        It is now time to call upon American artists and designers again.
    Through the NEA's various programs in the performing and visual arts, a
    national consensus can be reached that successfully turns the nation's
    technology advantage into an artistic advantage in the world market.
        America's computer animators, worldwide Web designers, special
    effects artists, computer composers and performers can secure first
    place for the nation in the entertainment and communications
    marketplace of the next decade. The National Endowment can convene,
    critique and generate consensus regarding such urgent and pressing
    needs. This is a proper federal role.
        For a second example of a proper federal role, let me suggest the
    following. As the demographics of the United States change and a larger
    percentage of our population ages, their needs will change. It is time
    to call upon America's architects, planners and designers to directly
    respond to this aging population. Both residential and public design
    must be changed to address these demographic changes. Instead of moving
    people from their homes to group residential centers, a new design
    agenda is needed. This national agenda, supported by the NEA, would
    promote a new design that assumed that we all will ``age in place''
    (our homes). This new design accounts for the changes brought on by
    aging and allows for the residential environment to be either changed
    or reprogrammed.
        The talent, the will, the agency support is here to create a
    revolutionary change in how residences are designed. This new design
    should minimize the impact on the citizens and maximize their
    independence. Such an NEA sponsored design initiative could be
    supported by insurance companies and health maintenance organizations,
    as well as by associations for senior citizens. This national
    initiative supported by a premiere National Endowment, can and would be
    an important federal role.
        Finally, the National Endowment provides programs to help us
    understand the arts of our time. We look to the great nations in
    Europe, Asia and Africa that surround our own country. We know,
    understand and value their unique contribution to human culture. The
    National Endowment for the Arts is the vehicle Americans have, as a
    nation, to add our contribution to the global stage.
        I urge you to provide an allocation of $136 million to the
    Endowment for fiscal year 1998. In our colleges of art and design we
    teach our students that their work is important and that it will impact
    society. Through the endowment, the artists and designers of this
    country, like the textile designers of a younger America, stand eager
    and ready to make their contribution once again.
                                     ______

    Prepared Statement of David O. Webb, Senior Vice President, Policy and
       Regulatory Affairs, on Behalf of the Gas Research Institute [GRI]

        Gas Research Institute (GRI) appreciates the opportunity to submit
    testimony to the Seante Interior & Related Agencies Subcommittee to
    present GRI's views and recommendations for fiscal year 1998 funding of
    gas-related research and development (R&D) programs within the
    Department of Energy's (DOE) Fossil and Conservation programs. GRI
    supports the overall budget request of $192 million for gas-related R&D
    submitted by the President for these DOE programs since it continues
    critical funding for on-going programs in natural gas.
        GRI is the RD&D management organization for the natural gas
    industry. GRI has over 320 member companies representing producer,
    pipeline, and local distribution companies. Our mission is to discover,
    develop, and deploy technologies and information that measurably
    benefit gas customers and enhance the value of gas energy service. GRI
    jointly plans and cofunds approximately $20 million annually with DOE
    Fossil Energy and Conservation program offices. Therefore, any change
    in policy or reduced levels of federal funding for these DOE programs
    will have an impact on GRI and the gas industry's cooperative research
    program. Specifically in the fiscal year 1998 budget request for DOE,
    $19.4 million is included for joint DOE/GRI projects. GRI and other
    industry participants are contributing $29.5 million of cofunding for
    these projects.
        Research managed and cofunded by GRI is in the public domain
    because we are a not-for-profit 501(c)(3) research organization and IRS
    regulations require public disclosure of the research results. The
    majority of benefits of such research most often accrue to the
    population in general and do not necessarily result in a marketable
    product by any one company.
        Because many companies, manufacturers, government agencies, and
    marketers come together to contribute to the research under a GRI
    program, benefits are quickly dispersed to each contributor and
    society. Each contributor reduces its financial risk; research is not
    duplicated; the cost is reduced for each company; and the gas customers
    quickly receive the benefits if the research is successful. In this
    regard, GRI does not view federal cofunding of this type of research as
    corporate welfare since the benefits are broadly dispersed to the many
    companies and their customers. We view the private/public involvement
    as an added benefit through the prudent use of scarce research dollars
    by both parties. As research funding becomes more scarce, this type of
    joint R&D is even more critical.
                           federal energy r&d policy
        Federal Energy R&D Policy sets the future direction for development
    and efficient use of our nation's valuable energy resources. The role
    of the federal government in funding energy R&D is critical as a basis
    for decision-making by industry as it competes in an ever increasingly
    competitive world market. Our technical world is becoming increasingly
    complex and as the cost of R&D grows, no single company or group of
    companies can afford the cost and risk associated with the development
    of many of the new energy technologies. Therefore, in times of
    declining budgets, government funds should be used primarily for
    investments that are expected to yield broad public benefits and,
    therefore, not likely to be undertaken by the industry unless
    government provides all or part of the funds.
        The government must continue to have the primary role and
    responsibility for funding and managing fundamental long-term basic
    research in energy because private companies are market driven and
    cannot capture the economic benefits of much of this research. Society
    receives large and continuing benefits from fundamental research, but
    industry alone cannot fund the level of basic research necessary to
    achieve national goals and objectives.
        On the other hand, both government and industry have a joint
    responsibility to plan, conduct, and fund applied R&D to meet the
    nation's energy goals. Industry should be brought in early to assist in
    the planning, financing, and management of the applied research. The
    partnership of private industry in federally sponsored R&D accomplishes
    several goals:
        If the federal research is aimed at top industry priorities,
    industry will provide cofunding. If industry is not willing to support
    applied energy research, government should question its own role in the
    research.
        Industry will bring rigorous cost/benefit analysis to prioritize
    R&D.
        Once industry buys into the research and participates financially
    and managerially, the commercialization path will be shorter because
    industry will be committed to bringing the product or process to the
    marketplace in order to benefit from the research.
        When the project is ready for commercialization, industry is
    already on board and has a vested interest in ensuring the technology
    reaches the marketplace, thus ensuring success from the government/
    industry investment.
        Finally, costly duplication of research is eliminated.
        The DOE fiscal year 1998 gas-related R&D budget request was
    developed with input from the gas industry and with the goal of
    completing important on-going projects in a timely manner. Industry
    support of this budget is evidenced through significant cost-sharing
    from the private sector. The research proposal set out by DOE will
    result in completion and commercialization of technologies which will
    contribute significantly to the nation's goals as we pursue all of our
    energy options. In addition, many of these products which result from
    this R&D are excellent candidates for export to other countries,
    thereby increasing the U.S. position in global competitiveness.
        Congress has recognized and needs to continue to recognize the role
    of government and industry in cofunding applied energy R&D and should
    give priority to those DOE research programs that are jointly funded
    with industry.
                       incentives for industry-funded r&d
        In recognition that industry needs to fund more energy R&D as the
    direct federal funding of this research is reduced, last year Congress
    extended the Research and Experimentation (R&E) Tax Credit for eleven
    months. This tax credit will again be a topic of consideration this
    year since the President's budget proposes to extend the credit for
    another year. However, this tax credit as now structured is a
    disincentive for collaborative research. GRI, along with other not-for-
    profit R&D organizations, has been active in seeking ways to eliminate
    the current disincentive and create incentives for collaborative
    research. Providing incentives for collaborative research is a sound
    policy at a time when shrinking research dollars both in government and
    private industry are a reality. Collaborative research is more
    efficient in terms of both dollars and time spent. The disincentives to
    the R&E tax credit can be corrected by extending and modifying the R&E
    tax credit to:
        Recognize 100 percent of the funding contributions to 501(c)(3)
    collaborative research organizations as qualifying for the tax credit
    (versus the 75 percent in the current law);
        Redefine ``qualified research'' for collaborative R&D to encompass
    the IRS definition of qualified research for a 501(c)(3) organization;
        Provide a non-incremental 20 percent tax credit for companies'
    contributions to collaborative research conducted by 501(c)(3)
    organizations.
                                recommendations
        GRI encourages the Subcommittee to support the Administration's
    request for gas-related R&D of approximately $192 million of which
    $178.78 million is in this Subcommittee's jurisdiction. Critical goals
    can be reached by continuing funding in the proposed DOE budget for
    programs in natural gas supply, gas turbines, fuel cells, natural gas
    cooling, natural gas vehicles, and industrial efficiency. We at GRI are
    committed to continue to work with both Congress and the Department of
    Energy to accomplish the mutual goals of government and industry.

    NATURAL GAS-RELATED RESEARCH WITHIN JURISDICTION OF INTERIOR AND RELATED
                     AGENCIES SUBCOMMITTEE, FISCAL YEAR 1998
                              [Dollars in millions]
    ------------------------------------------------------------------------
                                                       Fiscal year--
                                             -------------------------------
                     Program                       1997
                                               appropriation   1998 request
    ------------------------------------------------------------------------
                  Fossil energy

    Natural gas supply:
        Exploration and production..........          $14.12          $14.90
        Delivery and storage................            1.00            0.99
        Utilization.........................            5.84            4.81
        Environmental research/regulatory
         impact analysis....................            2.65            4.62
        Advanced turbine systems............           46.60           31.38
        Fuel cells..........................           50.12           46.29
                                             -------------------------------
          Total fossil......................          120.33          102.98

                Energy efficiency

        Natural gas cooling \1\.............            7.85            8.75
        Lighting end appliance R&D \1\......            0.46            1.45
        Gas turbines........................           28.85           28.85
        Industries of the future \1\........            5.78            5.66
        Transportation--natural gas vehicles
         \1\................................           20.34           23.48
        Fuel cells (transportation and
         microcogeneration) \1\.............            5.28            7.61
                                             -------------------------------
          Total energy efficiency...........           68.56           75.80
                                             ===============================
          Total gas related.................          188.89          178.78
    ------------------------------------------------------------------------
    \1\ Indicates gas-related portion taken from overall program.

                                     ______

      Prepared Statement of Elias H. Camara, President and CEO, M-C Power
                                     Corp.

        Mr. Chairman, this hearing occurs at a very significant point in M-
    C Power's development of our molten carbonate fuel cell (MCFC)
    powerplant.
        Fuel cells are energy conversion devices that transform the energy
    in a fuel directly into-electricity by means of an electrochemical
    reaction. Because there is no combustion, fuel cells are clean, highly
    efficient, and can be sited close to the electricity demand point,
    significantly reducing the high costs of transmission and distribution.
    Molten carbonate fuel cells operate at 1,200 deg. F., are 55 to 60
    percent efficient, and produce high quality heat for cogeneration. With
    heat recovery, total plant efficiency can approach 85 percent.
        On February 20, 1997, we had the pleasure of hosting the official
    dedication of our current 250 kilowatt (kW) cogeneration powerplant
    demonstration at Naval Air Station (NAS) Miramar in San Diego,
    California. The facility began to produce electricity and steam for NAS
    Miramar several weeks before me dedication and so far has operated for
    over 1,300 hours.
        There are a number of aspects of this demonstration that we think
    are exciting.
        First, a successful demonstration at NAS Miramar will show that we
    are applying the lessons we are learning throughout our development
    process in resolving the basic issues of fuel cell stack design, gas
    flow distribution, component manufacturing processes, and assembly
    techniques. Although most of the balance of plant components are
    commercial technologies that only need to be modified for adaptation to
    our fuel cell application, the fuel cell stack itself is cutting-edge,
    first-of-a-kind technology.
        The 250kW stack at NAS Miramar is 6 feet high, containing 250
    individual fuel cells, each approximately 60 inches long by 41 inches
    wide by 0.3 inches thick. They are layered one on top of the other,
    each with a total of six separate, full-area components. Every
    individual cell must fit, seal and stack within very close tolerances
    in order to maintain proper seals, gas flows and electrical current
    collection during operation. The engineering challenges of design,
    manufacturing techniques, materials handling and assembly procedures
    have been the drivers for M-C Power and the DOE fuel cell program, and
    success at Miramar will go a long way to show that we are meeting those
    challenges.
        The second exciting aspect of our fuel cell development is the team
    we have put together. M-C Power was incorporated in 1987, with the sole
    purpose of developing molten carbonate fuel cells. That is the area of
    our technical expertise, backed by the continuing technical support of
    the Institute of Gas Technology, who performed the original stages of
    the development of our technology.
        To turn fuel cell stacks into powerplants, however, a broader range
    of expertise is needed. In the fuel cell stack are the components that
    produce the electrochemical reaction that generates electricity. The
    powerplant must also include components, known as the balance-of-plant
    (BOP) equipment, mat produce a clean stream of hydrogen-containing fuel
    from natural gas or other fuel, and components that convert the fuel
    cell's direct electrical current into high quality alternating current
    suitable for use in a conventional electricity distribution grid.
        To supplement M-C Power's fuel cell expertise, we have teamed with
    the Bechtel Corporation for their world-wide reputation in engineering
    and powerplant design, and with Stewart & Stevenson Services for their
    world-wide reputation in powerplant fabrication and packaging, service,
    and market knowledge. That combination of skills and assets will
    continue to be of great benefit in moving our technology forward.
        Members of this subcommittee should be proud of your role, as well.
    With increasing pressure to wisely spend fewer tax dollars, your
    consistent support of the DOE fuel cell program that provides our basic
    funding is deeply appreciated. We know there are competing interests
    for prioritization and funding under your jurisdiction.
        We also owe much to the strong financial support to date from the
    Gas Research Institute, the Electric Power Research Institute, the
    Defense Advanced Research Planning Agency and individual utilities who
    have committed scarce R&D funds to supplement the DOE program funded
    through this subcommittee. San Diego Gas & Electric has shown strong
    leadership in their industry as the host utility for our HAS Miramar
    project.
        We benefit, as well, from a number of other sources. During this
    same hearing you will receive testimony from the Alliance to
    Commercialize Carbonate Technology (ACCT), a rapidly growing consortium
    of electric and gas utilities and other private sector entities,
    including international members. ACCT provides us with a constant
    stream of guidance and feedback about technical issues and market
    directions to assure that we will better fit distributed generation
    needs. In turn, we hope that ACCT members learn more about fuel cells
    and how ACCT members might soon use them in their own industries. We
    assume that the knowledge and insight they gain about our fuel cells
    will help give them sufficient confidence in our technology to be among
    our customers.
        We are also pleased to see growing international interest in our
    progress. At the Feb. 20 dedication of our NAS Miramar demonstration,
    we had delegations from both Russia and Poland who recognize our
    leadership and are interested in working with us to develop future
    molten carbonate fuel cell markets and manufacturing in their home
    countries. We also have a series of development discussions underway
    with companies in South America who expect large markets there. The
    demonstration at Miramar is also serving as a good opportunity the
    Navy, Marines and other branches of the military an opportunity to
    begin to familiarize themselves with the attributes and cogeneration
    applications of molten carbonate fuel cells for dependable, efficient
    energy production on military bases.
        Despite all that interest, we need to be clear that this
    demonstration of our first 250kW powerplant at NAS Miramar, while a
    great breakthrough, will still be several significant steps away from a
    powerplant adequately developed for deployment in the power generation
    industry. Our DOE program is directed toward a demonstration that will
    produce 1000kW or 1 megawatt (MVV) of power, effectively four times the
    output of the NAS Miramar unit.
        Although we hope that the powerplant at NAS Miramar will show that
    we have solved the fundamental design, manufacturing and assembly
    techniques necessary for a successful fuel cell stack, we also fully
    expect that it will lead us to improvements that still need to be
    implemented in order to increase performance and reliability up to
    market-acceptable standards while also bringing down size and cost.
    Even when we can call the unit at NAS Miramar a success, it will still
    be only the first time that a fuel cell stack of this size has been
    successfully demonstrated. At the moment, it is a single stack that has
    performed well for several weeks. While we are extremely pleased with
    that, we also know that reproducibility, performance over time, scale-
    up, manufacturing cost and packaging to fit the market are the real
    criteria for success. Those are the challenges that lie ahead, in a
    program that will continue to need your strong support.
        The balance-of-plant design and equipment used at Miramar were
    designed to provide a functioning plant that would allow the
    cogeneration of both electricity and heat for use within NAS Miramar.
    Our future 1 MW product will use multiple units of fuel cell stacks
    based on, but improved from, the one at Miramar, and a package design
    that will be optimized for cost, efficiency and size. That future
    product, producing approximately four times as much power as the
    Miramar unit, must do so in approximately half the ground space.
    Developing a multi-stack unit, with its own carefully designed balance-
    of-plant is the challenge that still confronts us beyond Miramar.
        Mr. Chairman, M-C Power is here once again to ask for your
    continued support, and the support of this subcommittee. The Department
    of Energy's fiscal year 1998 request for molten carbonate fuel cells
    represents a 10 percent cut from the level the Congress appropriated
    for us this year, and the program funding has historically been divided
    approximately equally between M-C Power and the Energy Research
    Corporation, who is developing a different approach to molten carbonate
    fuel cells. Your strong and steady support in the past has been vital
    to bringing us this far.
        The good news, however, is that we are now making significant steps
    forward. The past years of hard work and funding support are now
    showing more dramatic pay off, and the curve of our progress is
    accelerating. Although we know you will hear that same plea from many
    witnesses, we hope our Miramar project will provide the proof of that
    claim for us. If this subcommittee accepts the DOE request for fiscal
    year 1998 funding in this program, M-C Power's portion of that funding
    would likely be approximately $15.5 million. In order to keep our
    fiscal year 1998 growth and progress on track according to our current
    DOE contract, approximately $20 million for M-C Power would be
    necessary.
        Unfortunately, we are not yet at the point where we can make up
    that difference by turning to the private sector. Although we look
    forward to that day even more than you do, because it will indicate our
    developmental success, we are not yet there.
        As noted earlier, even if completely successful by any definition
    of success applied to it, the Miramar project is still only the first
    successful 250kW stack in a configuration that is not yet the final 1
    MW unit.
        We are also at a time when electric and gas utility markets are in
    a state of rapid change. You will hear more about this in the ACCT
    testimony submitted in this same hearing. While there is strong
    consensus that deregulation may lead to even greater markets for small,
    incremental distributed generation technologies such as molten
    carbonate fuel cells, the current market uncertainties of deregulation
    cause caution among possible energy sector partners or purchasers.
    Current electric utilities, now both generating and distributing
    electricity, may, in future deregulated markets, become primarily
    distributors. Current gas utilities face similar uncertainties about
    their future competitive roles. New energy service companies and
    entrepreneurial ventures may arise to capture opportunity markets.
        Until the impacts of those changes become more clear, however,
    sources of private funds for molten carbonate fuel cell development
    have the luxury of waiting both for more dependable proof of our
    success and more clarity about who will use or deploy technologies such
    as ours. Continued support by this subcommittee will stabilize
    assurance among our potential supporters that the Congress and the
    Department of Energy remain committed to our development until we reach
    that point.
        Again, M-C Power thanks you and this subcommittee for your strong
    support in the past, and we ask for your equally strong support for
    fiscal year 1998.
                                     ______

      Prepared Statement of Dr. Frank Derbyshire, Director, University of
                  Kentucky, Center for Applied Energy Research

        My testimony is concerned with a request to the subcommittee to
    support an innovative concept that can lead to the commercialization of
    clean coal technologies for advanced power generation, and provide an
    opportunity for the entrance of commercial coal conversion
    technologies. I am asking for federal funds to cost share a one year
    study that will provide the basis for a decision point to proceed with
    the formation of an industrial consortium to design and construct a
    pioneer commercial powerplant in Kentucky. The plant will employ
    advanced technologies for the production of clean, low-cost electrical
    power, with the optional co-production of liquid fuels, chemicals, and
    materials.
                                  use of coal
        Coal is our most abundant fossil fuel, the source of low cost
    electrical energy, and is vital to national prosperity and energy
    security. Low-cost power is an important locational factor for
    attracting new manufacturing industries, for economic development, and
    for job creation. Neither natural gas nor oil can compete in terms of
    abundance or low cost.
        To address environmental concerns over the use of coal, the federal
    government, through the Department of Energy, has made an enormous
    investment to demonstrate clean coal technologies. The advanced
    technologies that are now available offer increases in efficiency,
    which translates to still lower cost electricity and greatly reduced
    CO2 emissions. At the same time, sophisticated emission
    control systems minimize environmental impacts. The commercialization
    of advanced technologies would help to stabilize coal production,
    particularly in the eastern coal-producing states, and provide a spur
    to the growth of US industry.
                           advanced power generation
        It is anticipated that any new plant for advanced power generation
    will employ one of several schemes tested by the DOE at the pilot plant
    or demonstration-scale and based upon integrated gasification combined-
    cycle (IGCC) technology. IGCC involves coal gasification to generate
    electricity efficiently with effective gas clean up. The system can be
    combined with one of a number of technologies to produce liquid fuels,
    chemicals, or materials. The advantages of IGCC include much greater
    flexibility in fuel selection, improved emissions control and greatly
    improved thermal efficiencies. Extremely low grade coals can be
    utilized with up to 99 percent SO2 capture, and the thermal
    efficiency is up to 35 percent over conventional plants bringing a 25
    percent reduction in CO2 emissions. The ability to convert a
    slip stream of gasified coal to other products affords additional
    flexibility in the product slate and could improve overall process
    economics.
                        impediments to commercialization
        The deregulation of the electric utility industry has brought
    uncertainties, but also new opportunities for the free market
    implementation of new technologies. Numerous reported studies have
    demonstrated that while the utilities recognize the potential
    advantages of advanced power generation technologies, they are
    unwilling to incur costs that adversely affect their competitive
    position. Considerable investment is required to construct a new
    facility and, as with any new technology, there is some technical risk
    associated with a ``first-of-a-kind'' plant. IGCC represents a
    fundamentally new technology, and there is limited experience of
    economics and operation at the commercial scale.
        As a consequence, decisions to build new baseload capacity, and the
    type of technology that will be employed, are being deferred as long as
    possible, and the life of existing plants is being extended. Even then,
    there will still be hesitance to adopt advanced technologies. An
    additional area of uncertainty concerns the price and availability of
    natural gas. Industry is unlikely to act alone to take the next steps,
    and government support is necessary to encourage commercialization and
    to protect the sizeable investments that government and industry have
    already made in the clean coal technology program--estimated to be
    nearly $7.2 billion.
                            pioneer commercial plant
        A proposed solution to this impasse has been developed by members
    of the Kentucky Coal Marketing and Export Council which provides
    oversight of the Commonwealth's coal interests and is a body advisory
    to the Governor of Kentucky, consisting of coal producers, utilities,
    transporters, and the academic and financial communities. The basic
    elements are to bring together an industrial consortium to construct
    and operate a 300-400 MW merchant or pioneer baseload plant for
    advanced power generation, based upon an appropriate gasification
    technology and, optionally, to co-produce liquid fuels, chemicals, and
    materials. The plant would represent the first essential step towards
    the eventual attainment of mature, low-risk commercial processes.
    Through collective investment by private industry, the risks are
    shared, and the proposed plant will deliver baseload power and products
    to the partners in proportion to their ownership interests and needs.
    The co-production of high added-value products could help to offset
    economic uncertainties, attract other industries to join the project,
    and provide a mechanism to commercialize coal conversion technologies.
    A particular example of these products is a recently developed minimum
    emission diesel fuel, or eco-diesel, that can be produced by synthesis
    gas conversion and could be used to meet federal fuel requirements for
    state fleets.
        By siting the plant directly in the coal fields, transportation
    costs and environmental impacts will be reduced. Because advanced clean
    coal technologies can lower the constraints on coal quality, it will
    also allow the utilization of coals that have been ``stranded'' because
    of their sulfur and ash contents. It is also the intention to examine
    the use of coals that have been stranded by outdated mining practices
    (e.g. in waste ponds, abandoned highwalls) and because of limitations
    in mining technology (e.g. in thin seams). Other advantages and
    benefits of the project are that it will: assist economic development
    and the stabilization of coal industry: provide employment; realize
    revenue from taxes; enhance the utilization of indigenous resources and
    reduce dependence on imported energy; and improve US competitiveness in
    technology and engineering. The concept is consistent with the
    Department of Energy's strategy. It provides a model for similar
    ventures that can bring investments in research and development to
    timely industrial implementation, and could eventually lead to the
    widespread construction of new plants for advanced coal-fired power
    generation.
        Private industry will bear the main burden of investment, and will
    look to the state and federal governments for support to help to
    initiate the venture, for use of their expertise and resources to help
    to carry it through, and to provide incentives in the form of
    guarantees or subsidies that will mitigate the risk and encourage
    investors. The period from inception to plant start-up will extend over
    five to eight and will involve several distinct stages, with a decision
    point at the end of each stage.
                                  requirements
        Stage I will be a one year feasibility study to establish a
    detailed definition of the concept, to determine the technological and
    economic uncertainties, and to ascertain whether the generation of co-
    products is worthwhile. This groundwork is essential to affirm a sound
    basis for the concept and to provide the information necessary to
    attract industrial partners. The study will produce: economic and
    technical analyses of prospective technologies; an evaluation of the
    technologies and benefits of the generation of co-products; cost
    estimates for subsequent phases; the projected cost of new power
    production; an analysis of markets for electric power and other
    products; and defined criteria for plant siting and potential
    locations. The end product will be a prospectus for potential
    industrial partners. Other critical issues should be addressed in
    related research and development programs.
        If a decision is made to proceed, subsequent stages will involve: a
    detailed evaluation of the technology, and economics of the selected
    plant, environmental assessments, and a preliminary engineering design;
    a detailed engineering design and costing; and construction and
    operation. The work will be directed by the Kentucky Coal Export &
    Marketing Council and will involve the efforts of the University of
    Kentucky Center for Applied Energy Research and an experienced DoE
    contractor such as MITRETEK Systems.
        It is requested that the committee appropriate the sum of $400,000
    for the next fiscal year to support the first stage. In recognition of
    the significance of the overall concept to the Commonwealth of
    Kentucky, the state is prepared to commit a further $200,000 towards
    the first stage costs, consisting of $150,000 committed in kind by the
    University of Kentucky Center for Applied Energy Research and the
    balance through the office of the Governor.
        Input to the feasibility study will be provided by information from
    current and on-going research and development programs. The
    continuation of these programs, and their focus on selected topics will
    be important to the success of later stages. We request the
    subcommittee to appropriate funding that will allow a continued funding
    and, where appropriate, expansion of the DOE's research and development
    programs in the following areas: the disposal and utilization of the
    solid by-products from advanced gasifiers; the production of liquid
    fuels and chemicals from coal synthesis gas; the production of added-
    value carbon materials from coal; and the development of technologies
    for stranded coal recovery.
                                     ______

     Letter From Tommy Crawford, Chair, Southeastern Manufactured Housing
                                    Alliance
                                          New York, NY, March 13, 1997.
    Hon. Senator Slade Gorton,
    Chairman, Senate Interior Appropriations Committee,
    U.S. Senate, Washington, DC.
        Dear Senator Gorton: I am writing today to urge your support for
    $7.0 million in funding for Energy Star Partnerships, a program that
    works closely with industry to demonstrate energy efficient equipment
    and activities. The program is funded by the Department of Energy's
    Office of Building Equipment.
        The Southeastern Manufactured Housing Alliance is working on a path
    parallel to the DOE Energy Star Partnerships. Our common goal is on
    reducing energy use and energy costs in manufactured housing. The
    Southeast is synonymous with manufactured homes. Over 47 percent of all
    new manufactured homes are in the Southeast and, in composite, this
    industry adds about $14.1 billion to the regional economy (1996). About
    one out of every seven homes sold in the nation are produced by
    manufacturer members of the Alliance. Three of the top ten residential
    power suppliers are Alliance members and for many utility members over
    70 percent of their new connections are manufactured homes.
        However, manufactured housing is by no means only a regional
    concern. The industry is experiencing explosive growth nationwide. By
    sometime in the next decade, industry observers expect manufactured
    homes to account for about 50 percent of all new housing. The problems
    we address have relevance to all manufactured homes.
        The Manufactured Housing Alliance is collaborating with the
    Department of Energy's Energy Star Partnerships program on a number of
    activities related to increasing the energy efficiency of our nation's
    manufactured housing. This is particularly important, since the
    manufactured housing industry provides the lion's share of shelter for
    low income families; households whose financial security often depends
    on the low energy costs associated with energy efficient construction.
    Some of the activities we are undertaking in partnership with DOE
    include the following: development of energy efficiency lending
    practices for manufactured housing, equipment sizing guidelines to
    improve overall performance, consumer home buying educational
    workshops, and improvements in air distribution systems. There are
    myriad other research areas that merit sponsorship. We will continue to
    identify and pursue these opportunities to improve housing efficiency
    and affordability. The Energy Star Partnerships program is an ideal
    vehicle for leveraging these initiatives and bringing the benefits to
    American home buyers and owners.
        To that end, it is important that the Energy Star Partnerships
    program at DOE be funded at the fiscal year 1998 requested level of
    $7.0 million. As Chairman of the Appropriations Subcommittee, we would
    very much appreciate your support for full program funding. The members
    of the Manufactured Housing Alliance feel very strongly that this
    program be fully funded--and activities relating to manufactured
    housing should increase--improving housing affordability, energy
    efficiency, and quality.
        Thank you for your consideration of this request.
                Sincerely,
                                                 Tommy Crawford, Chair.
                                     ______

        Prepared Statement of the Petroleum Technology Transfer Council

        The Petroleum Technology Transfer Council (PTTC) is pleased to
    comment in support of the Department of Energy fiscal year 1998 funding
    request for oil and natural gas programs in the Office of Fossil
    Energy. The Fossil Energy programs are responsible for many important
    projects that benefit US independent oil and gas producers.
        This testimony is mainly about the PTTC, a unique organization
    formed by industry in 1994. In partnership with state governments,
    industry, and the US Department of Energy, PTTC has created a multi-
    disciplinary network for effectively communicating exploration and
    production (E&P) technologies. Our main mission has been to transfer
    practical, cost-efficient technology to producers in the field to
    improve production efficiency and help prevent the premature
    abandonment of the thousands of marginal wells in the 33 producing
    states. In a very short time, PTTC has proven to be a true success
    story for DOE. It has achieved its original goals--and the program is
    able to document its results.
        The nation's small independent operating companies--which are
    responsible for the majority of the production in the lower 48 states--
    increasingly are using PTTC to gain access to the research and
    development programs from the Department of Energy, the national labs,
    universities, state geological surveys, petroleum service companies,
    and other sources. Independent producers are participating in PTTC's
    network of resource centers, workshops and Internet websites. As a
    result, accessing and applying E&P technologies is helping increase the
    recovery of US resources--and addressing the problem of the 17,000
    marginal wells abandoned every year in this country.
        PTTC has served as one of the main mechanisms for disseminating
    DOE-sponsored upstream technology and information to the industry. The
    Department of Energy has supported the effort and provided start-up
    funding under a five-year cost-share program. fiscal year 1998
    represents the fourth year of the contract, and PTTC has more than
    exceeded its cost-share requirements.
        The original agreement with DOE called for $3.56 million in federal
    funding for the PTTC for fiscal year 1998. These funds currently come
    from both the oil and natural gas programs of DOE's Office of Fossil
    Energy. Our total cost estimates for the current year, fiscal year
    1997, shown in Table I, have been scaled back by 27 percent from the
    contract amount, respecting the need to reduce federal spending. At the
    same time, PTTC has dramatically increased its non-federal cost-share.
        Continued federal support of PTTC is needed to continue the program
    until it is completely established and can survive on funding from
    industry and state governments. Beyond fiscal year 1999, the PTTC
    expects that it will no longer need federal funds, as efforts are
    continued through self-generated revenues. We believe that this initial
    seed money investment by the DOE will be returned in multiples through
    incremental federal revenues from new projects and additional energy
    production that will be stimulated by effective technology transfer.

                                                 TABLE I.--PTTC FUNDING
                                                 [Dollars in thousands]
    ----------------------------------------------------------------------------------------------------------------
                                                                        Fiscal years--
                  Source of funds/yr.              -------------------------------------------------------   Total
                                                       1995       1996       1997     1998 \1\   1999 \1\
    ----------------------------------------------------------------------------------------------------------------
    DOE FE Oi/Gas programs........................     $2,200     $2,200     $2,400     $3,560     $3,460    $15,720
    Non-Federal cost-share........................      1,500      2,100      1,800      3,200      3,500     11,700
                                                   -----------------------------------------------------------------
          Total...................................      3,700      4,300      4,200      6,760      6,960     25,500
    DOE share (percent)...........................         60         50         57         53         50         54
    Non-DOE share (percent).......................         40         50         43         47         50        46
    ----------------------------------------------------------------------------------------------------------------
    \1\ Represents amount in 5-year contract.

            industry and government should share in r&d investments
        Public and private research continue to achieve advances in
    petroleum E&P technology that could yield significant national benefits
    in the form of increased domestic production, reduced oil imports, and
    increased public sector revenues. Technology advances resulting from
    ongoing R&D projects promise to amplify these potential benefits. Both
    industry and the public sector stand to gain from the development and
    application of advanced E&P technologies; thus both should share in the
    investments.
        Government also has an essential stewardship role--to ensure that
    our domestic resources are produced efficiently and with respect for
    the environment. To achieve these goals, industry and government must
    recognize the challenge and work together.
        Industry investment in petroleum-related technology and R&D is
    significantly reduced. Thus, DOE needs to continue to invest wisely in
    ``technology transfer'' that is focused toward the industry's most
    important needs. This means identifying where advances in geosciences
    and petroleum engineering can achieve the greatest return in deferring
    premature well abandonments and maximizing incremental oil and gas
    production.
       effective technology transfer is essential to realize r&d benefits
        The full economic potential of new and existing technologies will
    not be achieved if producers are not aware of the technology, do not
    understand its economic potential, or do not feel comfortable with
    applying it. Nor will it be achieved if known resources are abandoned
    in the reservoir before the technology can be applied. Effective
    technology transfer is essential to achieve the full benefits of this
    potential and to sustain a viable domestic petroleum industry.
        The government has already invested billions of dollars through the
    years in federally-funded research at national labs, universities, and
    other R&D providers. To truly obtain value from this past investment,
    it is critical to continue technology transfer programs. It is
    important for PTTC to be funded for a few more years until it is fully
    established in all regions, and can become financially self-sufficient.
    By doing so, the government will have an effective mechanism for
    getting federally-funded R&D into the hands of industry.
         pttc effectively transfers products of public and private r&d
        Current technology transfer approaches are not efficient--
    particularly as they serve independent producers. Rates of technology
    penetration in the independent producing community are far slower than
    among the majors. This is the primary reason why PTTC was formed by the
    Independent Petroleum Association of America, in conjunction with the
    state and regional producing associations, the Gas Research Institute
    (GRI), the Interstate Oil and Gas Compact Commission (IOGCC) and other
    groups.
        Studies performed by the National Petroleum Council, IOGCC, and DOE
    have identified significant gaps and recommended improvements that must
    be made by government, industry, and the organizations that support the
    industry. PTTC's role is to help bridge these gaps in technology
    transfer to petroleum producers, accelerate and improve the flow of
    technology information to domestic E&P companies, and provide essential
    industry input to the research community to help ensure that DOE and
    other research focuses on the highest priorities of the E&P industry.
                pttc is achieving its technology transfer goals
        The PTTC has helped DOE in targeting upstream R&D efforts on
    practical, short-term projects with immediate applications in the
    field. As a result, the public and private R&D process is accelerated
    by informing users of new and on-going research projects. PTTC
    technology workshops serve as catalysts for bringing new partners into
    R&D consortia and other industry groups. An important benefit is that
    small independent operating companies (those without the staff or
    budget for R&D) have new access to cost-efficient technologies to
    maximize the recovery of oil and natural gas reserves. The future of
    the domestic petroleum industry's R&D efforts must be collaborative--a
    federal, state, industry partnership. PTTC epitomizes this new paradigm
    by serving as a technology clearinghouse.
        Some of the PTTC's most important accomplishments include:
        PTTC has completed 32 problem identification workshops in all ten
    regions. The technical report from the workshops provide valuable input
    to DOE.
        PTTC has conducted more than 30 technology workshops around the
    country, focusing on a variety of topics from 3-D seismic applications
    to produced water disposal.
        PTTC conducted a series of traveling workshops for DOE to
    disseminate results of its Class 1 Reservoir Demonstration Project.
    These workshops were held in six cities, and more are planned.
        PTTC is working jointly with many other organizations to co-sponsor
    relevant training sessions--including the Society of Petroleum
    Engineers, the American Association of Petroleum Geologists, IOGCC, GRI
    and others.
        All 10 PTTC regional resource centers are open, and three satellite
    centers are expected to open in fiscal year 1998, depending on the
    availability of funds. These centers have been established at existing
    technical institutions in petroleum producing regions throughout the
    country. They provide technical assistance, computerized workstations
    with access to information and analytical tools, and other technical
    outreach services for local operators.
        Commercial vendors of technology, software, and other information
    have been enthusiastic about donating their products and services to
    the PTTC resource centers, and helping to train producers in state-of-
    the-art technologies to solve their most important technical problems.
    PTTC has currently received approximately $1.8 million worth of
    software donations.
        PTTC has created an electronic information system on the Internet
    allowing petroleum producers and other users to share information. The
    system links the 10 regional home pages with the national Headquarters
    web site. The most popular feature is an interactive Technical Forum
    that is divided into topics for users to post questions, comments or
    notices. Hundreds of producers have attended PTTC workshops on
    accessing oil and gas information on Internet.
        pttc helps doe's oil and gas programs serve a diverse clientele
        PTTC is one key element of the oil and natural gas programs in the
    DOE Of rice of Fossil Energy that makes good sense. It delivers
    demonstrable and measurable benefits to the producing industry and to
    the nation. PTTC provides a new and effective means for disseminating
    the results and products of federally-funded oil and natural gas
    research and analyses. Last year, DOE designed its new outreach program
    based on the PTTC structure and the regional DOE-PTTC teams are working
    closely together to meet industry's technical needs. With other
    important DOE initiatives such as the Natural Gas and Oil Technology
    Partnership, the reservoir class programs, and other actions, the
    audience for the products of DOE programs has expanded.
               doe's oil and gas programs provide vital services
        We want to close on behalf of America's independent petroleum
    producers by asserting that Congress should continue to support an
    active DOE role in petroleum-related R&D and technology transfer. Oil
    and natural gas are strategically and economically critical national
    resources, and the value of DOE programs in these areas extend far
    beyond geoscience and engineering research.
        Through technology transfer efforts such as the PTTC, the results
    of federally-funded research will reach operators in the field, where
    it can be used to preserve our national energy security. We encourage
    Congress to provide the funding that DOE has requested to continue its
    vital oil and natural gas programs. Thank you.
                                     ______

       Prepared Statement of the Coal Utilization Research Council [CURC]

        This written testimony is submitted by the Coal Utilization
    Research Council (CURC or the Council), a recently-formed organization
    currently consisting of utilities, coal producers, mayor equipment
    suppliers, architect, engineering and construction firms and other
    service providers interested in the cost-effective and environmentally
    superior use of coal. Having only been launched within the past month,
    the membership of CURC is not yet able to comment, in detail, upon the
    proposed Department of Energy (DOE) budget for fiscal year 1998. During
    this Subcommittee's deliberations in the coming months, the Council
    hopes to provide Members with detailed comments about the scope and
    direction of the DOE's proposed fiscal year 1998 fossil energy budget,
    particularly those items related to the coal research and development
    program.
        Many members of the CURC are also members of the Clean Coal
    Technology Coalition. The clean coal program is a model for successful
    government/industry partnering. Industry's successful involvement in
    clean coal has led many companies interested in the continued use of
    coal to now join together in the creation of this new organization so
    that we might collectively focus on the longer term research and
    development needed to insure the continued use of coal.
              the mission of the coal utilization research council
        The members of CURC intend to examine in-depth those coal-related
    research and development programs being conducted at the federal and
    state government levels, as well as within industry. CURC will
    collaborate with government agencies and other industry organizations
    throughout this process. The Council intends to achieve a consensus
    among our members about the direction and level of effort required by
    government and industry to achieve coal-related technology development
    results that will then be applied commercially. The Council will be a
    vocal advocate and a provider of useful information that addresses the
    importance of, as well as the benefits to, our Nation with respect to
    coal-related R&D and technology development. To the extent possible,
    CURC will also encourage the establishment of international cooperation
    and information dissemination that addresses coal-based R&D and the
    promotion of international coal technology exchanges. Importantly, such
    exchanges must be reciprocal: information and ``know how'' cannot, and
    should not, flow in one direction only. We have information to provide
    and share; other nations do, as well. As a consequence of these
    efforts, we will seek, perhaps not in this budget cycle but in
    subsequent examinations of future budget requests, to provide this
    Subcommittee with an industry view of a coherent coal-related R&D
    agenda (a long-term coal R&D ``roadmap'') that will be designed to best
    insure the continued use of coal.
                  general comments about doe's coal r&d budget
        Our membership is aware of the very difficult choices confronting
    this Congress as you must choose among programs and priorities. While
    we are in no position yet to recommend significant changes or
    reallocations or any overall increases to the coal R&D program, we do
    wish to take this opportunity to emphasize the importance of continuing
    an aggressive R&D program for coal utilization. And, importantly, the
    members of CURC urge the Subcommittee to resist any attempts to further
    reduce appropriations for coal R&D.
                               specific comments
        First, we would caution against reducing budgets or eliminating
    research and development programs related to fossil energy as some in
    Congress are advocating. Those Members have attacked federal energy
    research and development programs claiming that the programs represent
    corporate welfare and special interest Subsidies.'' That label needs to
    be challenged. Where industry is willing to cost-share with government
    in pursuing coal-based R&D, that partnership is not corporate welfare.
    That label also is not appropriate where the government, on behalf of
    taxpayers, is partnering with industry and has an interest, on behalf
    of the public, in ensuring that our natural resources are used
    efficiently and that the use of those resources results in the least
    negative impact to the environment while also insuring a great benefit
    to the general public through secure, reliable and low-cost energy and
    other coal-based products.
        Second, many in industry, like government, have been required to
    downsize significantly. While industry recognizes the importance of
    research and development, it is nonetheless true that long-term R&D is
    among the first budget categories to feel the knife because limited
    dollars are increasingly directed at technology innovation designed to
    support shorter and shorter product life cycles. In other words,
    research and development dollars are only justified and approved if
    near-term results are shown. Yet, in the face of these budget cuts in
    R&D, we also know, as a nation, that federal support for longer-term
    R&D has been a critical element to our industrial competitiveness. The
    President's Committee of Advisors on Science and Technology recently
    reported to the President (see: letter from John A Young, Co-chair of
    the President's Committee of Advisors on Science and Technology, dated
    December 6, 1996): ``The United States has allowed Federal spending on
    energy R&D to fall more than three-fold in real terms in the last 15
    years, a period in which private funding for energy R&D also was
    falling. Government spending on energy R&D is more than twice as high
    in Japan as in the United States, and about four times as high as a
    fraction of GNP.''
        That same communication to the President recommended: ``* * * an
    expanded effort on clean and more efficient fossil-fuel technologies.''
        For purposes of comparison, in fiscal year 1994, the DOE provided
    over $167 million for coal R&D programs; however, in fiscal year 1997,
    this amount was reduced to $103 million--nearly a 40-percent reduction
    in only 4 years.
        While the reduction to the requested funding level for coal R&D is
    less dramatic this year, it is a continued reduction nonetheless. And,
    in light of the goals and objectives that the DOE has set forth as
    justification for the budget requested for fiscal year 1998, it does
    not appear that this decreased level of funding can achieve the goals
    sought. During the coming months, the CURC intends to examine the
    levels of funding for the various categories of programs included in
    the DOE's coal R&D program against the goals which those funding levels
    are supposed to support. In addition, the Council will seek an industry
    perspective regarding research and development and then will urge upon
    the Congress and the Administration our agreed-upon R&D ``roadmaps''
    which we believe should be pursued in the support of an overall goal to
    insure the continued utilization of coal.
        Third, in this time of constrained budgets, it may also be
    necessary to prioritize among programs. Our intent is to undertake such
    a task and to provide that information to the Congress, as well. As a
    result, while the CURC is not now suggesting that funding for coal-
    related R&D should be raised to the level of several years ago, we may
    call to the attention of the Congress a need to insure that a balance
    in federal expenditures is achieved among the various sources of energy
    and energy conservation/efficiency.\1\
    ---------------------------------------------------------------------------
        \1\ Despite an overall reduction in funding for DOE R&D programs,
    not all program budgets are being cut. In the fiscal year 1997 budget
    request, the budget for fossil energy programs was scaled back 10
    percent, while the budget for renewable energy and energy efficiency
    was increased by 35 percent (from the fiscal year 1996 level of
    appropriations).
    ---------------------------------------------------------------------------
                                  conclusions
        U.S. coal reserves represent 90 percent of our Nation's combined
    energy reserves; and, coal-fired generation provides 55 percent of U.S.
    electricity. Worldwide, coal accounts for 25 percent of total energy
    consumption and is projected to increase to more than 50 percent over
    the next 20 years. In addition, coal provides significant amounts of
    energy for industrial processes and is an emerging feedstock for
    transportation fuels and chemicals. Coal and coal-related technologies
    add billions of dollars each year to our economy. In addition, coal-
    based technologies that permit the use of coal are part of a growing
    U.S. export market. Those growing exports contribute to our country's
    international competitiveness.
        To assure the continued utilization of our abundant reserves, coal
    must be used effectively, economically, and in a manner that is
    environmentally acceptable. Coal will remain a basic energy feedstock
    to power and fuel the U.S. economy and will be used increasingly
    throughout the world as an energy and industrial feedstock,
    particularly as developing countries gain economic strength. New
    technologies derived from research and development are key to the
    continued effective use of coal.
        In an era of increasing competition to provide low cost
    electricity, it is important for coal to remain a significant fuel
    resource of the future. In addition, mounting pressure to produce
    economical energy from coal will be coupled with pressure to minimize
    the environmental impacts resulting from coal use. These demands can be
    met through advancements in existing technologies and the development
    of new technologies.
        Continuing government support is required to ensure that a balance
    of short-and longer-term, high-risk research and development is
    pursued. Certain clean coal technologies for power production also are
    amenable to the production of clean fuels and chemicals. Research and
    development in these technologies should continue to be an important
    part of federal government's coal R&D program.
        The members of the Council appreciate the opportunity to present
    these views and look forward to working with the members of the
    Subcommittee.
                                     ______

       Prepared Statement of the National Association of Energy Service
                                   Companies

        The National Association of Energy Service Companies (NAESCO) is a
    trade association of energy service companies (ESCOs) and their trade
    allies, including utility and manufacturing companies. NAESCO's current
    membership of over 100 organizations includes firms involved in the
    design, manufacture, financing and installation of energy efficiency
    equipment and services in the private and public sectors, including
    Federal buildings.
        The thousands of energy efficiency retrofits installed by NAESCO
    member companies to date enable energy consumers to save an average of
    25 percent off of their previous building energy costs. NAESCO's energy
    service company (ESCO) members offer capital constrained customers the
    opportunity to upgrade their facilities without any up-front capital
    expenditures. In addition, ESCOs assume the performance and technical
    risk so that repayment for project costs comes only from measured and
    verified energy savings generated by a successful, ongoing project.
    NAESCO appreciates the opportunity to present the following testimony.
        In its fiscal year 1998 budget request, DOE states that ``the major
    fiscal year 1998 emphasis'' for the Federal Energy Management Program
    (FEMP) ``will be on using private sector investments to retrofit
    federal facilities using energy savings performance contracting [ESPC],
    thus stretching federal leveraging to the maximum.'' For the reasons
    stated below, NAESCO fully supports DOE's budget requests for FEMP and
    other programs that are designed: (1) to support the objective of using
    ESPCs for the energy efficient retrofit of federal facilities, and (2)
    to provide equal access by all qualified energy service providers to
    the Federal market for energy efficiency services.
                          the energy services industry
        The U.S. electricity market is moving away from its traditional
    monopoly structure and cost of service regulation and into a market
    characterized by open retail competition. At the same time, energy
    efficiency retrofits, funded and carried out by private sector energy
    service companies (ESCOs) offer the opportunity to upgrade existing
    facilities and manufacturing processes to create a more energy
    efficient and productive U.S. economy.
        ESCOs are entrepreneurial companies, who finance and install energy
    efficiency measures for energy users. The ESCOs' services often include
    the installation of energy efficient lighting, motors, HVAC and other
    energy conservation measures at no up-front cost to a customer such as
    the Federal Government. The owners or occupants of such buildings
    benefit from reduced energy costs, while enjoying an upgraded facility.
    As an added benefit, existing utility generation capacity is freed up
    so that it can be sold to new customers, thus avoiding investments in
    new generating capacity.
        ESCOs produce numerous new jobs, not only within their companies,
    but through the use of contractors and through the countless other
    firms involved, directly and indirectly, in supporting energy
    conservation projects. For example, the ESCO industry has spawned a new
    group of firms that specialize in providing the hardware and software
    used in measuring energy savings.
        Approximately one-third of the money invested in ESCO projects is
    applied to labor costs. Thus, out of the estimated $2 billion of
    installed projects to date, ESCOs have generated approximately $700
    million in direct labor employment. In addition, the energy efficiency
    installed by ESCOs are primarily U.S.-produced, providing an added
    stimulus to the U.S. economy. Energy service companies thus support
    American manufacturing and stimulate job growth while enhancing the
    competitiveness of U.S. industry by reducing the operating costs of the
    nation's buildings, and manufacturing facilities and processes. In
    addition, the more efficient application of energy produces
    environmental benefits through reductions in air emissions from burning
    fossil fuels.
     reducing the costs of operating the federal government through energy
                        savings performance contracting
        The Federal government is the single largest energy consumer in the
    world. In 1994, the Federal government spent about $3.8 billion for the
    energy it used in the buildings that it owns and leases. These annual
    energy costs can be reduced by as much as $1 billion through
    performance based energy efficiency improvements financed by the
    private sector, for example, through the use of energy savings
    performance contracts (ESPCs). Moreover, these savings and the related
    facility improvements can be achieved at no added cost to the Federal
    budget, or to American taxpayers. In addition to these energy savings,
    the U.S. economy benefits through the creation of new jobs and through
    the increased competitiveness in global markets that results from the
    reduced costs of maintaining public and private sector infrastructures.
        Congress recognized and endorsed these potential budget and energy
    savings in the 1985 Omnibus Budget Reconciliation Act and in the
    bipartisan 1992 Energy Policy Act (EPAct). In recent years, initiatives
    undertaken by the Department of Energy's (DOE) Federal Energy
    Management Program (FEMP), including Energy Savings Performance
    Contracting (ESPC), are leading to the development of procurement
    structures designed to enable Federal agencies to enter partnerships
    with the private sector for the installation of commercially available
    energy efficiency technologies.
        Where these efficiency investments are undertaken by ESCOs through
    energy savings performance contracts (ESPCs), energy consumption and
    cost reductions are measured continuously and reported monthly, thus
    ensuring real and verifiable savings. Under an ESPC, all project costs
    can be financed by the private ESCO who is repaid out of verified
    energy cost savings over the life of a contract, up to 25 years. Also,
    ESPC contracts usually provide for the maintenance of the conservation
    measures by the ESCO at no additional cost to the customer.
        Unfortunately, the Federal government is realizing only a small
    fraction of the energy cost savings available through such private
    energy conservation investments in Federal facilities. DOE initiatives
    like Energy Savings Performance Contracting, the Regional Energy Action
    Teams and the Energy Efficiency Partnership Initiatives offer an
    important first step on the road to capturing the energy cost savings
    readily achievable in a broad range of Federal facilities. DOE and its
    sister Federal agencies must be aggressive in their pursuit of a full
    realization of the dollar savings and energy consumption reduction
    available through the wide-spread use of ESPCs.
        the department of energy budget request for energy conservation
        As Secretary Pena observed during his Senate confimnation hearings,
    the DOE should be the leader in reducing energy consumption throughout
    the Federal sector. Over the past three years, the DOE Office of Energy
    Efficiency Conservation and Renewable Energy has demonstrated
    leadership and initiative in four critical areas: (1) in technical
    guidance and training of Federal energy managers; (2) in the
    formulation of standardized guidelines and procedures for quantifying
    the energy savings resulting from the installation of energy efficiency
    measures; (3) in the finalization of the energy savings performance
    contracting regulations necessary to undertake private investments in
    Federal facilities; and (4) in the development and dissemination of
    materials designed to educate both public and private concerns
    regarding the availability and benefit of energy efficiency measures.
        There now is experience among some Federal energy managers with
    private-sector financing of energy efficiency upgrades of Federal
    facilities through the use of energy savings performance contracting
    (ESPC) procedures. At this time, additional Federal support is required
    in two principal areas: (1) Federal contracting officers must be better
    educated on the opportunities for greater energy productivity within
    available appropriations, through such alternative financing and
    contracting mechanisms as energy service performance contracting; and
    (2) Technical and contracting support is necessary to enable Federal
    agencies to implement energy savings performance contracts (ESPCs).
    Through these efforts, it is hoped that energy savings performance
    contracting (ESPC) will come to be viewed as a standard mechanism for
    the procurement of energy services.
        Through DOE's Federal Energy Management Program (FEMP), training is
    being provided for the over 3,000 Federal energy managers and
    contracting officers. FEMP also is addressing the need for technical
    and contracting support through its regional energy action plan (REAP)
    teams and other related initiatives. In addition, FEMP makes a
    substantial contribution to education and information dissemination
    about the benefits of ESPCs through the creation of educational
    materials and TeleFEMP broadcasts.
        Finally, both FEMP and the Energy Efficiency Partnership
    Initiative, within DOE's office of Building Technology, State and
    Community Programs, are supporting the development of educational
    materials for federal, state and local facility managers. These
    materials offer a highly effective means of: (1) creating awareness of
    the increased productivity available through energy efficiency; and (2)
    enhancing contract officers and facility managers' understanding of how
    public sector energy efficiency projects undertaken in partnership with
    private sector energy service companies (ESCOs) work.
        NAESCO believes that these efforts facilitate DOE's stated goal of
    emphasizing the use of energy savings performance contracts (ESPCs) and
    thus supports the budgetary levels being sought by the DOE for these
    initiatives. Furthermore, these programs are more than self-funding
    since, according to the DOE, the energy costs savings are about $3 for
    every $1 invested. Since 1985, the U.S. Government has saved over $11
    billion as a result of energy efficiency investments in federal
    facilities to date. The DOE has set a target of $15 billion in net
    cumulative energy savings by the year 2015 as a result of these
    investments. By comparison this year, DOE has requested $31 million to
    support its ongoing efforts to facilitate the development of a greater
    number of energy efficiency investments through its technical
    assistance and educational initiatives. NAESCO believes that the budget
    request for DOE's energy efficiency initiatives is relatively deminimus
    when compared to the dollars saved as a result of the widespread
    implementation of ESPCs. NAESCO looks to both DOE and Congress in its
    oversight capacity as helping stimulate Federal compliance with the
    existing laws and regulations mandating energy consumption reduction
    and utilizing third party entities like ESCOs to provide the financing
    and assume the performance risk.
     the need to ensure all qualified energy providers equal access to the
                                 federal market
        During his Senate confirmation hearings, Secretary Designate Pena
    supported the development of a fully competitive marketplace for energy
    efficiency and other energy related services. In its fiscal year 1998
    budget request for FEMP, the DOE has stated its intent to emphasize the
    use of energy savings performance contracts (ESPCs), which require an
    open competitive process, for the procurement of energy efficiency
    services in Federal facilities.
        NAESCO believes that the current reliance on the use of utility
    sole source contracts by Federal agencies for energy efficiency
    services violates Federal requirements for full and open competition
    and is contrary to the national trend toward competition in the utility
    industry. Moreover, it denies the Federal government and U.S. taxpayers
    the benefits of competition in the market for energy services.
    through the competitive procurement of energy efficiency services, the
       federal government can reduce the energy costs borne by american
                                   taxpayers
        Within the United States' economy, residential and commercial
    buildings, including those dedicated to the Federal sector, consume
    one-third of all primary energy and 65 percent of all the electricity
    we produce. By investing in energy efficiency, we can capture more than
    25 percent of this energy for use elsewhere within our economy. If the
    same amount of capacity for energy production were to be provided from
    the construction of new electric powerplants, it would require 80 1,000
    mega-watt plants with their attendant environmental impacts and siting
    concerns. Through energy efficient improvements in existing buildings
    we can free up financial resources for other, more productive purposes
    while at the same time creating new jobs and reducing air emissions.
        As NAESCO pointed out last year, a 1994 macroeconomic study
    demonstrates that by meeting a 2010 energy use reduction target of 30
    percent, the U.S. will reduce annual electricity generation by 27
    percent and decrease the need for the construction of new generating
    facilities by over 50 percent. U.S. electricity customers will enjoy an
    18 percent overall reduction in their electricity bill (a savings of
    $50 billion), while electric sector emissions of carbon dioxide and
    oxides of nitrogen will be reduced by 33 percent and 12 percent,
    respectively. These lower costs for energy, available through private
    energy efficiency investments, will enable U.S. consumers to increase
    their annual consumption of non-electricity goods and service by $45
    billion. (``DSM and the Broader Economy,'' Edward Moscovitch, The
    Electricity Journal, May 1994.)
                                   conclusion
        The competitive procurement of energy efficiency investments in
    Federal facilities, which are financed with private sector funds,
    offers a win-win budget initiative for the Congress and the U.S.
    taxpayer. These initiatives will increase energy productivity by
    reducing the energy consumption and therefore the dollar cost of
    operating and maintaining Federal facilities.
        Last year in the conference report on the fiscal year 1997 Interior
    Appropriations Act, the Congress recognized the potential Federal
    budget savings that are achievable through energy efficiency
    improvements in Federal buildings. In addition, it supported the
    greater use of partnerships with private sector energy service
    companies (ESCOs) to capture those savings through the use of energy
    savings performance contracts (ESPCs). NAESCO thanks you, and urges you
    to do so again.
                                     ______

     Prepared Statements of Joseph N. Darguzas and Ilene Wilder, Sargent &
                                 Lundy, L.L.C.

        Mr. Chairman and Honorable Committee Members: Thank you very much
    for this opportunity to provide testimony concerning an extremely
    critical issue facing the United States and our energy independence. As
    a Registered Professional Engineer in many states and as a citizen of
    the United States, my professional opinion is that continued Federal
    and State participation in fossil energy development and demonstration
    projects is essential.
        Our home State, Illinois, has committed to spend over $2 million in
    support of the LEBS work this year. Our company, Sargent & Lundy, has
    invested millions of dollars in research, development and demonstration
    programs. However, we cannot afford to continue without the backing of
    our Federal government.
        We support the continuation of the fiscal year 1997 line item for
    Advanced Pulverized Coal-Fired Power Plant development of the Low
    Emission Boiler Systems (LEBS) for fiscal year 1998. After due
    consideration last year, you and your colleagues in the House
    determined that this was an appropriate funding amount. Continuing at
    this level will allow the benefits of previous years' funding to be
    realized and allow us to begin the final phase of the LEBS project
    work.
        This project, if your funding allows us to continue, will provide
    benefits to citizens across the United States. For example: Important
    research will continue at the University of Utah. States providing
    solid fuels will benefit by having a cleaner use for their product. In
    the East, people living in States such as New Hampshire, Rhode Island,
    Pennsylvania, West Virginia, etc. benefit from their employment on this
    project.
        Please consider why we believe continued Federal participation in
    our Low Emission Boiler Systems (LEBS) Prairie Energy Project is so
    essential:
      --We have been making steady progress since 1993 to take our LEBS
            design from concept through bench scale testing, through pilot
            scale testing. We are now at the point where we are ready to
            make the next order of magnitude size increase to an 80MW Proof
            of Concept facility.
      --Consistent with the overall LEBS Combustion 2000 goals of having a
            nominal 400MW, pulverized coal design ready for commercial
            deployment in the year 2000, we believe the 80MW size is the
            next appropriate technological step. (We plan to build this
            Proof of Concept facility at a mine owned by Ziegler Coal
            Holding Companies.)
      --Given the current status of the electric industry re-regulations, a
            project such as this must be economically viable without
            recourse to utility-rate-based support.
      --While the 80MW size is technically appropriate, economies of scale
            dictate that this size is not economically viable. Even though
            our current and potential Prairie Energy Project team members
            including, DB Riley Research' Sargent & Lundy, AEP Resources,
            and Ziegler Coal are willing to commit to approximately one-
            half of the project cost, and the State of Illinois
            approximately one-fourth of the cost; we will simply not be
            economically viable without the 25 percent support needed from
            the Federal Government.
      --Perhaps most importantly, Federal help will enable continued
            development of the technology that will provide economical
            electric energy in an environmentally acceptable manner. Given
            the current concerns with respect to global warming and other
            environmental issues facing the 105th Congress, we believe that
            having these technologies developed domestically is extremely
            important to our future economy. Funding significantly lower
            than the current levels will cause project delays that will
            result in this window of opportunity being lost to foreign
            competition. It would also leave U.S. companies at a
            disadvantage in competing in emerging foreign markets.
        Going forward with this project will offer major benefits to the
    People of the United States, including:
        Environmentally Sound: 70 percent lower NoX emissions
    than conventional systems; over 98 percent SO2 removal;
    reduces carbon emissions by 15 percent; and generates useful byproducts
    to several industries.
        Technology Leadership: Continued use of U.S. technology and
    ingenuity; maintain world leadership role by developing ``state-of-the-
    art'' equipment and services; and create strategic competitive
    advantage for U.S. technology.
        Improve Employment Picture: Create near term jobs; and promote
    industrial growth and long term employment.
        Economical Power: Provides low cost electricity to consumers,
    approximately $.03kWh; and economic benefit of spin-off jobs will be
    far reaching.
        Your continued support for the LEBS/Prairie Energy Project and the
    entire fossil energy budget will be greatly appreciated.
                                     ______

      Prepared Statement of the National Association for State Community
                           Services Programs [NASCSP]

        NASCSP represents state administrators of the Department of
    Energy's Weatherization Assistance Program (DOE/WAP) and the Community
    Services Block Grant (CSBG).
        This testimony is provided in support of the funding request
    contained in the President's budget, $154 million, for the
    Weatherization Assistance Program. This is a program that from its
    infancy has conserved energy, created jobs, reduced dependency on oil
    imports and improved the health, safety and comfort of low-income
    citizens.
        This committee has acknowledged that Weatherization is a worthwhile
    program that saves energy and improves the health and well-being of
    low-income citizens, and has demonstrated that support by increasing
    the funding levels provided by the House in fiscal years 1996 and 1997.
    We thank the committee for its constant support of this vital program.
        We believe Weatherization has a national impact and senses the
    national interest by creating the technological and programmatic
    foundation for the individual state programs. Weatherization
    contributes to the achievement of national energy and social goals
    through: Cleaner air through reduced CO2 emissions--
    Weatherization reduced CO2 emissions by 63,215 metric tons
    in 1996 that would otherwise have been released into the atmosphere;
    reduced consumption of imported fuels through reducing consumption at
    the residential level; reduced demand on other social programs such as
    the Low Income Home Energy Assistance Program (fuel assistance),
    housing and health care; and implementation of innovative energy
    conservation technologies and transfer of this technology into the
    private market.
        The Department of Energy invests significant amounts of money in
    energy conservation research through its laboratories. The
    Weatherization Program has been a testing ground and provided a fertile
    field for the real life demonstration of this research. The National
    Renewable Energy Laboratory (NREL) is developing an audit that will be
    used to determine the best way to conserve energy in mobile homes. Oak
    Ridge National Laboratory (ORNL) Building Technology Center is testing
    the use of storm windows as replacement windows for use in warm climate
    states. The Florida Solar Energy Center and the state of Hawaii are
    working on the development of cost effective solar hot water heaters.
    The front line in the deployment of these technologies will be the
    Weatherization Assistance Program, while the beneficiaries will be
    citizens across the nation. The technology developed as a result of
    field experience and demands from agencies using these retrofit
    measures have national benefits for the entire home-building industry,
    the prefabricated housing industry and the existing housing stock.
        Numerous service providers in the Weatherization Program are
    private contractors. For many of them, the Weatherization Program
    provided their first experience with serious residential energy
    conservation. The advanced audits developed by ORNL, sophisticated
    diagnostics and the other technologies practiced by Weatherization
    providers are also now being used in the utility industry. The unique
    public-private partnership within the Weatherization Program means that
    the deployment of technological advances, proven within the
    Weatherization Program, are expeditiously adopted in the rest of the
    residential building industry.
        Weatherization continues to be a wise investment of taxpayer
    dollars: The Weatherization Program provides a return on investment of
    $2.40 for every dollar appropriated; the Weatherization Program
    produces an average of 33.5 percent energy savings for space heating
    per household; the Weatherization Program identifies and corrects for
    the presence of carbon monoxide and thereby increases health and safety
    in weatherized households; the Weatherization Program reduces
    CO2 released into the atmosphere by 1.12 metric tons per
    household per year; the Weatherization Program leverages an additional
    $3.39 from other federal, state, local and private sources for each
    dollar appropriated; and the Weatherization Program creates or sustains
    75 jobs per million dollars appropriated; 11,550 at a funding level of
    $154 million.
        ORNL recently concluded a report: ``State Level Evaluations of the
    Weatherization Program in 1990-96: A Metaevaluation That Estimates
    National Savings.'' The report finds that the Weatherization Program
    has improved its energy savings over the past seven years, by 83
    percent. The program produced an average of 18.3 percent in savings in
    1989-90, while by 1996 the program was achieving savings of 33.5
    percent. With this greater increase in energy savings there is a
    concomitant reduction in carbon emissions. This report shows that the
    program reduced CO2 emissions by 1.12 metric tons per
    household per year, or 63,215 metric tons in 1996 alone. The greater
    energy savings also increased the benefit/cost ratio of the program by
    49 percent, from 1.61 in 1989-90 to 2.40 in 1996.
        The greater savings are based in large part on the introduction and
    use of more advanced conservation diagnostic tools and audits. Over 26
    States moved to more complex audits since the introduction of the
    National Energy Audit by DOE in the intervening years. The rigorous
    conservation standards developed by the Weatherization Program are also
    being adopted by the private sector.
        The Government Performance and Results Act (GPRA) requires that all
    federal programs have measured outcomes. Weatherization has been
    performance based for years and uses feedback analysis of outcome
    measures to constantly evaluate effectiveness and as a basis for
    change. Weatherization is more successful in maximizing lessons learned
    from outcome measurement than other programs under the purview of this
    subcommittee or those operated by the few other Departments that have
    attempted such program measurements.
        Largely because of skepticism from past administrations, the
    Weatherization Program was subjected to a more rigorous evaluation than
    most government energy or low-income programs. Its performance in 1989-
    90 passed all cost benefit tests with flying colors and funding was
    increased. Using the lessons from that evaluation, the Department of
    Energy insisted on common use of the most successful program elements,
    that is, advanced computerized energy audits and addressing air
    distribution systems. The program's performance nearly doubled.
        What makes this program different from other DOE programs that are
    also working on improving measured outcomes is that many of the
    benefits go not only to business, but to private families who are low-
    income. More than a third of these households include an elderly
    person. It has been suggested that because of this, the program does
    not belong under the purview of this subcommittee. We think this is an
    erroneous assumption. The program has demonstrated its capacity for
    implementing sophisticated energy conservation technologies, and has
    continued to increase energy savings. Weatherization increases the
    health and safety of its clients; but, first and foremost it is the
    most successful residential energy conservation program in the country.
        Weatherization is a proven federal, state, local and private
    partnership that develops and transfers technology, saves energy,
    creates jobs, puts dollars into local economies, and helps a needy
    segment of our society. For these reasons, NASCSP on behalf of the
    State Weatherization Programs urges you to support the continuation of
    the Weatherization Assistance Program for low-income people by
    approving the Administration's request for $154 million in fiscal year
    1998.
                                     ______

    Prepared Statement of U.S. Senator Jeff Bingaman, New Mexico, on Behalf
                 of the Interstate Oil & Gas Compact Commission

        Mr. Chairman and other subcommittee members: The Interstate Oil &
    Gas Compact Commission (OGCC) submits the following comments in support
    of full funding of the Department of Energy (DOE) budget request for
    oil and gas research within the Office of Fossil Energy.
        The IOGCC is a 36-state organization of governors founded on the
    principles of conservation of petroleum. The Compact was created by the
    governors of oil and gas producing states in 1935, at a time when the
    U.S. petroleum supplies were at a surplus level and production was out
    of control. The waste of this precious resource was rampant and the
    states decided to join together to address the desperately needed
    conservation issues. The Compact grew out of a recognition by a group
    of producing state governors that voluntary agreements among producers
    were not working, and the clear recognition that federal control of the
    industry was looming on the horizon. These governors believed states
    had an obligation to prevent avoidable waste of oil and gas, and
    believed this was a fundamental right of the states to preserve self-
    government. The states' initiative has certainly been successful
    regarding conservation. Now we face a different threat as most oil
    fields are abandoned after only 20 to 30 percent of the reservoir is
    recovered, America has turned to the easy access of oil and gas that
    imported sources offer. That has a compound effect in that domestic
    production could be enhanced with little or no environmental impact and
    our independence could be reaffirmed if we reduced our reliance on
    imports
                                summary of issue
        Research has pushed domestic production to vastly increased
    efficiency and recovery levels.
        In 1995 oil imports accounted for $52 billion dollars of the U.S.
    trade deficit.
        Petroleum imports could increase to 65 percent of total consumption
    within the next five years.
        Potential government revenue is being lost every day as production
    declines.
        The U.S. may have to abandon 60-80 percent of discovered oil
    resources by 2015.
        Federal support for applied energy research has fallen 81 percent
    since 1978.
        Oil and gas are America's primary choice for fuel, accounting for
    about two-thirds of our total energy consumption. Unfortunately, to
    satisfy demand we rely on petroleum imports for about 50 percent of
    that two-thirds. It is projected by the DOE that in the next five years
    oil imports will increase to around 65 percent, while oil and gas use
    grows in supplying the United States' energy needs. The domestic
    petroleum industry is a key source of jobs and revenue for IOGCC member
    states
        An even more striking number is that transportation fuel requires
    97 percent of the oil produced. The IOGCC states believe we should not
    want to become more dependent upon foreign oil to ensure food is
    delivered, hospitals get their medicine, people get to work, and the
    military is able to move troops. Clearly the situation as it now stands
    is intolerable.
        The United States cannot afford to increase its dependence on
    foreign supplies of oil and gas. The security of our Nation and the
    health of our economy depend upon a stable supply which can be met by
    increased domestic petroleum production. The federal government must
    begin to pursue a rational energy policy based upon three principles:
    increased domestic production, increased efficiency in the use of
    petroleum, and a common sense approach to regulation that encourages
    conservation without hamstringing production.
        There are several steps the federal government can take to achieve
    these goals. One of the more important steps is a renewed emphasis on
    oil and gas research and development (R&D).
        There are those who would argue that the United States is a mature
    producing region for oil and gas, but we are far from recovering all of
    our available resources. The IOGCC estimates that there are at least
    351 billion barrels of oil left in known reservoirs, 106 billion of
    which are recoverable with current technology. With advances in
    research the U.S. could add another 25 to 50 billion barrels by the
    year 2015. Proved natural gas reserves are 164 trillion cubic feet
    (Tcf). According to the DOE, with current technology, economically
    recoverable natural gas in the lower 48 states is estimated at 1,040
    Tcf. With advanced technology recoverable reserves rise to 1,696 Tcf by
    the year 2015.
        Those numbers do not tell the entire story. In addition to proved
    reserves, there is the possibility that several undiscovered reservoirs
    still exist. The National Oil Program of the DOE estimates there are at
    least 25-60 billion barrels of undiscovered oil. Current technology
    allows recovery of only a limited amount of the oil in a reservoir.
    According to the DOE, unless new technologies are developed and made
    available by the year 2010, the United States would have to abandon 60-
    80 percent of known oil resources. The thought of having to abandon
    producible domestic oil is a chilling one. The federal government's
    role in oil and gas research is an important one. The DOE has provided
    the seed money for dozens of projects that bear economic and social
    benefits while strengthening our national security. This is not
    ``corporate welfare'', for two reasons: (1) the vast majority of DOE
    oil and gas research is funded through a cost sharing arrangement with
    independent and major producers, and (2) the benefits to the public
    greatly outweigh any benefits to the industry.
        The vast majority of the oil and gas research done by DOE provides
    technology and knowledge that small independent producers would not be
    able to conduct for themselves. These independent producers, the
    equivalent of family farms, are the backbone of the oil and gas
    industry. These projects produce benefits for the economy by increasing
    jobs and wages, providing more efficient consumption of oil and gas,
    enhancing revenue for government, and increasing environmental
    protection.
                                recent successes
        DOE's oil and gas program helps increase production on existing
    wells by funding research into new recovery technologies. Only one-
    third of all oil can be produced through conventional vertical
    drilling. Secondary and enhanced recovery methods are absolutely
    necessary if oil production is to be increased. Past R&D by both the
    DOE and industry produced revolutionary technologies. The development
    of 3-D seismic imaging, horizontal drilling, waterflooding, in-situ
    combustion, inert gas flooding and other enhanced recovery operations
    have revolutionized oil production. These developments did not happen
    by accident; they required a tremendous commitment of capital, time and
    knowledge that the DOE helped industry find.
        Advances made in secondary and enhanced recovery operations have
    not only been effective in increasing production but also in increasing
    revenue for producers, the economy, and government. Three-dimensional
    seismic imaging, in conjunction with other information technology and
    enhanced recovery operations, is being used to better characterize
    existing wells. This leads to identification of oil bearing formations
    that producers may have missed. After the formations are located,
    producers are better able to produce the existing well.
        According to Alfred C. Decrane, Chairman and Chief Executive
    Officer of Texaco, horizontal drilling can double, triple, or even
    quadruple the amount of oil recoverable from a vertical well.
    Horizontal drilling allows operators to access reserves trapped in
    naturally fractured reservoirs. It also allows access to reserves in
    thin geographic formations where trapped hydrocarbons are not
    targetable with injection substances. Horizontal recovery has brought
    new life to fields in Utah and North Dakota. In the Pearsall field in
    Texas, horizontal recovery brought post primary recovery in excess of
    the vertically recovered reserves.
        In Wyoming, Dakota Oil Producers, an independent producer, in
    partnership with the DOE's National Oil program, conducted tests with a
    new technology called Huff 'n' Puff. This enhanced recovery technique
    involves injecting surfactant and inert gas into a low pressure
    reservoir to produce a foam that helps prevent the premature channeling
    of injected gas. This technology helps increase the pressure of the
    reservoir which allows more oil to be recovered. Tests are still
    continuing in the area, but early results are encouraging. Wells that
    had ceased production are now producing again.
        In the Unita Basin in Utah, DOE National Oil Program research into
    reactivating mature Class I fields is finding considerable success. In
    the fall 1996 newsletter of the DOE's Reservoir Class Program, Irene
    Chang (BDM-Oklahoma) writes ``The result of the first two completed
    field tests? A win-win-win for taxpayers, producers, and DOE. The
    projected yield from federal taxes and royalties alone from just the
    first project to reach production, Inland Resources/Lomax Exploration
    Company's Waterflood in the Unita Basin, will pay for the entire 29-
    project, $120 million Class program.''
        Another DOE program, the Rocky Mountain Oil Field Testing Center in
    Casper, Wyoming, uses a marginal oil well field to conduct tests of new
    technology. They provide a site for technology and environmental
    research, demonstrate new technology to cash strapped independent
    producers and a offer a hands on classroom for a new generation of oil
    and gas students.
        R&D for natural gas provides the similar benefits to the industry
    and the nation that oil research provides. A Gas Research Institute
    (GRI) program was initiated in the early 1980s to develop technology to
    leverage the innate capability of natural gas to approaching the
    problem of lowering nitrogen oxide emissions. The total investment in
    this area has been $35 million; projected savings to customers and
    industry is projected to exceed $40 million by 1999.
        Another GRI R&D program, conducted and cost shared with the New
    York gas company Brooklyn Union, completed 13 separate R&D programs
    that allowed them to safely and economically produce methane from land
    fills. A $500,000 investment yielded nearly $15 million in benefits.
        There are not many things, besides raising taxes, the federal
    government undertakes that might be said to increase revenue. On top of
    that, there are not many programs the federal government administers
    that pay for themselves. Oil and gas R&D is the exception to the
    perception that most government programs are wasteful and eventually
    failures.
        These are only a few examples of the kinds of petroleum R&D
    projects that the federal government helps fund. Most of the projects
    are successful in that they help increase domestic oil and gas
    production. Every new barrel of oil or cubic foot of gas produced in
    the United States replaces foreign imports on a one-to-one ratio, thus
    reducing our trade deficit and enhancing our national security. Every
    new barrel also produces U.S. jobs and revenue for IOGCC member states.
        In 1994 the DOE took steps to ensure that research breakthroughs
    are made available to those who need it most: independent producers. In
    a three-way partnership with the DOE, state governments and industry,
    the Petroleum Technology Transfer Council (PTTC) was established.
        The purpose of this non-profit group is to provide independent
    producers access to information from federally funded R&D projects.
    PTTC acts as a clearinghouse of information for independent producers
    who cannot afford to do such an accelerated level of research
    themselves and may have been unaware of new knowledge and technology.
        Time after time oil and gas R&D performed with the help of the
    federal government proves to be economically and socially successful.
    The contributions to the health of the economy and the wealth of the
    nation are enormous. Petroleum R&D is licensed to other sectors of the
    economy who adapt it for their own uses. Petroleum R&D is a win-win-win
    situation for industry, the public, and federal, state and local
    governments.
                        future needs for oil and gas r&d
        Two recent discoveries in the offshore oil and gas area provide an
    exciting picture of what the domestic oil and gas industry, in
    partnership with the DOE, could achieve through increased funding of
    R&D.
        In the Eugene Island oil field off the coast of Louisiana, drillers
    made a startling discovery: the field seemed to be replenishing itself.
    Preliminary research suggests as oil is recovered more oil migrates up
    from a greater depth to replace it. Research undertaken to understand
    the ``architecture'' of this reservoir could help producers find the
    same type of formations in other places, thereby increasing production
    dramatically. Producers might also be able to create an artificial
    migratory formation in other reservoirs to determine if more oil lies
    under proven reserves. The knowledge and technology that might emerge
    from this research is unfathomable. The threat is that as research
    budgets are slashed, the type of research needed in this situation will
    wither.
        In North Carolina, geologists discovered a new gas reservoir 200
    miles off the coast in the Blake Ridge. This formation, according to
    the U.S. Geological Survey, is made up of enough natural gas to supply
    the world for the next 107 years. There is only one problem: nobody
    knows yet how to produce the gas. It is frozen in crystals along the
    Blake Ridge and presents, right now, severe structural, economic and
    environmental barriers. Long-term research could provide the tools
    necessary to overcome current barriers. As Dr. Charles Paull, a
    University of North Carolina geologist, said, ``It's a pretty
    unanswered question [how to bring the gas out]. On the other hand,
    engineers are pretty good at figuring out ways to do things if you
    define the problem for them.'' The biggest unanswered question: Will
    the funds needed to support the engineers be available?
                                current problems
        Despite the recognized value of long-term petroleum R&D, according
    to a report by the DOE, there is an R&D ``crisis.'' Long term R&D
    expenditures, by both the petroleum industry and the federal
    government, are declining.
        The dollars, in private industry, are being shifted toward mid-term
    and short-term projects. While these projects keep industry competitive
    in today's marketplace, they do little to prepare for competition in
    the future. Stable oil and gas prices, restrictive regulation, and
    increased global competitiveness are several of the factors
    contributing to the decline of long term R&D expenditures in the
    private industry.
        Funding by the federal government of applied energy research, which
    includes fossil energy research, has fallen a staggering 81 percent
    since 1978. In the private sector, energy R&D expenditures since 1982
    have fallen nearly 30 percent from $3.8 billion to $2.9 billion.
        As noted earlier, oil and gas R&D done by the DOE primarily
    benefits the independent producer. Independent producers provide up to
    50 percent of our oil production. These producers are the petroleum
    industries' small businesses and are the backbone of the oil and gas
    industry. With the drop in research dollars allocated for DOE's oil and
    gas R&D program these independent producers face abandoning wells, a
    loss of income and jobs, forcing the nation to lose valuable petroleum
    resources.
                                   conclusion
        A renewed emphasis on long term R&D is not a cure-all for all the
    problems faced by the domestic petroleum industry. There are other
    barriers that stand in the way including public indifference, economic,
    environmental, and political barriers. Long term R&D, while not the
    answer, could and would help the United States face these barriers
    armed with new knowledge and new technology.
        C.H. Lyons, an independent operator, said in 1957, ``So long as
    favorable political and economic conditions prevail, the minds of men
    will be directed toward improving methods and techniques for finding
    and producing ever-greater quantities of oil. We can be sure that our
    concept of finding and producing oil in the future will differ
    radically from those of today.''
        Federal government oil and gas R&D, when performed correctly and in
    partnership with industry, will foster the radical concepts needed to
    keep the domestic oil and gas industry alive and producing valuable
    energy resources to fuel America well into the 21st century.
                                     ______

     Prepared Statement of Dr. Bernard S. Lee, President, Institute of Gas
                                   Technology

        This testimony supports fiscal year 1998 Department of Energy
    expenditures in: The overall natural gas related programs in Fossil
    Energy; the molten carbonate fuel cell program in Fossil Energy; the
    cross-cutting component development portion of the fuel cell programs
    in the Transportation and Buildings sections of the Conservation
    program; the Industries of the Future programs funded through the
    Office of Industrial Technologies in Conservation; and the natural gas
    related research on natural gas vehicles supported through the
    Transportation programs in Conservation.
        Although it may not be the specific jurisdiction of this
    subcommittee, the current issue of utility deregulation should be
    interlaced throughout your consideration of fiscal year 1998 funding
    for Department of Energy programs. Because competitive market pressures
    may cause further near-term cuts in many areas of private sector,
    utility-based R&D, the need for continued--and strengthened--federal
    support is extremely important.
        Utility efforts to lower costs to their customers must, by nature,
    focus on expenditures or savings with near-term impacts. They must also
    have predictable, almost guaranteed results. Those results must also
    deliver benefits directly and dependably to the investor. Those
    requirements are seldom predictable from many areas of R&D.
        Deregulated utility markets, at least initially, will likely be
    driven solely by the price of the electricity or natural gas to be
    delivered, and, to remain competitive, that price will be stripped to
    its barest essentials. The natural gas utility industry is currently in
    the midst of a nation-wide debate over how--if at all--to create an on-
    going funding mechanism to support the work of the Gas Research
    Institute, and much of the controversy stems from business units that
    are willing to forego the GRI R&D surcharge in order to gain a
    competitive edge in current pricing. That short-term market focus is
    having similar effect throughout utility industry R&D.
        In deregulated markets, new competitors, seeking to capture the
    most attractive segments of service territories, will do so solely on
    the basis of the cost of current services, without investing in R&D for
    the future. That may then force current utilities to similarly abandon
    long-term R&D.
        We are particularly concerned about the impact of the potential
    near-term reduction of private sector support for the kind of long-term
    R&D programs that are typical of the Department of Energy programs
    funded through this subcommittee. While utilities may still have
    competitive incentives to conduct R&D in areas of maintenance,
    distribution, or automated metering and business systems in order to
    maintain a competitive advantage in the provision of service, they may
    have less near-term incentive to invest in end-use technologies where
    there will be no guarantee that, when successful, the energy used in
    those technologies will be acquired through that utility. Broader
    issues of R&D investment--energy efficiency, environmental performance,
    domestic industry competitiveness in world markets--risk being pushed
    aside by day-to-day competition. Equipment manufacturers may similarly
    be under increased pressure to keep costs--and, therefore, prices--as
    low as possible in order to stay competitive, marketing the best
    products already in hand rather than investing in long-term R&D.
        While those competitive trends may bring attractive near-term
    savings to utility customers, and promises of significant near-term
    profits to the most agile and aggressive marketers, they also bring
    responsibility to this subcommittee and your jurisdiction over the
    important long-term R&D supported through the Department of Energy,
    which is in our national interest. In an ever-tightening budget, you
    obviously face difficult decisions. The constant pressure to be good
    stewards of taxpayers dollars must be balanced against continuing to
    develop energy and environmental technologies that will help our nation
    continue to address the valuable ``public good'' benefits of a stronger
    domestic economy, improved energy efficiency, lower emissions and lower
    reliance on imported fuels that will arise from DOE's on-going research
    programs.
        In recent years, despite steadily tighter budgets, this
    subcommittee has done an admirable job of not only preserving, but
    expanding natural gas related R&D in the DOE budget. IGT appreciates
    that support.
        There are several specific areas to which we hope to draw the
    subcommittee's attention as you consider the distribution of fiscal
    year 1998 DOE funds:
                                   fuel cells
        The M-C Power Corporation is one of two contractors developing
    molten carbonate fuel cells through DOE funding and private sector
    cost-sharing. The approach to molten carbonate fuel cells currently
    being advanced by M-C Power was originally developed by IGT, and IGT
    still maintains a role in R&D support. During this hearing you will
    learn directly from M-C Power about the success of their current
    demonstration and the scope of both their technology and market
    development efforts. IGT strongly endorses M-C Power's request for
    funding to continue their work in fiscal year 1998.
        As M-C Power moves toward success, IGT has the opportunity to turn
    our R&D capabilities toward other fuel cell R&D, as well. Through
    funding in both the Transportation and Buildings portions of the DOE
    Conservation budget, DOE will soon be receiving proposals for the
    development of cost-effective components for PEM fuel cells. This DOE
    program is designed eliminate redundant R&D and lower overall PEM
    development costs by establishing technology breakthroughs for specific
    PEM fuel cell components or systems that will then be available and of
    benefit to all developers of PEM powerplants. That is an effective
    method for simultaneously boosting the success and hastening the
    development of all competitive PEM developers, while taking advantage
    of the experience and unique skills that IGT and others may bring to
    this field.
        IGT has recently developed a novel process for manufacturing the
    bipolar separator plates for PEM fuel cells that should significantly
    lower the future market cost of these fuel cells. Last year, DOE
    estimated the cost of mass-produced PEM fuel cell stacks to be $234/
    kilowatt. The bipolar plate portion of that cost was $149, with
    humidification and cooling costing $45. IGT is developing a molded
    composite plate which incorporates the bipolar plate, cooling and
    humidification functions, and will cost less that $10/kilowatt. That
    would be a 95 percent reduction in the total current cost of these
    stack components. IGT's bipolar plate technology is simple and
    economical, and can be adapted to any geometric configuration used by
    PEM developers.
        IGT intends to apply for fiscal year 1997 support through this DOE
    competitive program, in the hope of securing $575K for one year of
    funding, supported by private sector cost-sharing, to further develop
    and demonstrate our innovative approach.
        DOE has asked for an increase to $10 million in Transportation and
    $1.7 million in Buildings for PEM component development for fiscal year
    1998, and IGT supports that DOE request.
         industries of the future programs in the office of industrial
                               technologies (oit)
        The OIT programs in the Industry portion of DOE's Conservation
    budget offer a similar approach of funding technology development
    intended to benefit a broad industry rather than a specific company.
    OIT, in its Industries of the Future program, has chosen seven energy-
    intensive industries--steel, aluminum, metal casting, chemicals,
    refining, forest products and glass--for concentrated development.
    Collectively, these industries represent the bulk of our nation's
    industrial energy consumption, and the goal of the OIT program is to
    increase these industries' energy efficiency and productivity and lower
    their emissions, while increasing their competitiveness in world
    markets. While the individual industries may be large in size, scope
    and importance to our domestic economy, they are characterized by a
    broadly diversified base rather than a few industry-dominant companies.
    Benefits derived from the OIT projects will be applicable to a broad
    range of domestic market competitors. The problems to be addressed in
    the OIT programs are identified and prioritized by the affected
    industries, strengthening the probability that the innovations
    developed by the OIT projects will be broadly implemented. All projects
    are competitively chosen, and all come with significant private sector
    cost-sharing, making this program an effective mechanism for leveraging
    both federal and private sector funding.
        IGT is already a participant in several of the OIT programs,
    particularly through technologies affecting our nation's glass
    industry.
        Last year, IGT received a prestigious R&D 100 award for our work,
    co-funded through OIT's Glass Vision Area, on our oxygen-enriched air
    staging (OEAS) technology that uses natural gas for energy efficient
    NOX control in endport and sideport glass melting furnaces.
    Our technology will achieve NOX reductions of 50 percent
    from these furnaces while improving their energy efficiency.
        In another Glass Vision Area project, IGT leads an industry team
    that is currently developing a high luminosity natural gas burner, a
    novel combustion system in which soot is generated and then combusted
    in the burner flame zone, resulting in a highly luminous flame that
    greatly improves heat transfer and thermal efficiency, and lowers
    NOX emissions.
        With support through OIT's Steel Vision Area, we are working with
    industry partners to develop a natural gas fueled oscillating
    combustion technology that can be applied to a number of high-
    temperature material processing industries. Bench-through pilot-scale
    testing has already shown 50-90 percent NOX reductions
    through this flame control, coupled with increases by as much as 10
    percent in heat transfer, furnace efficiency and productivity. Further
    gains may occur by combining this technology with our OEAS and high
    luminosity burner breakthroughs.
        We also have an on-going project with funding support from OIT's
    Refining Vision Area, through which we are working to develop an ultra-
    low-emission natural gas-fired Forced Internal Recirculation (FIR)
    burner that can be used in both new and retrofit applications in
    process fluid heaters used in the refinery industry and elsewhere, and
    watertubeboilers in a broad range of applications.
        IGT hopes to continue to be involved in the competitive
    solicitations issued through OIT's Industries of the Future programs so
    that we can continue to work together with DOE and industry partners in
    improving our nation's industrial energy efficiency, environmental
    performance and competitiveness in world markets.
        For fiscal year 1998, DOE has asked for an increase of
    approximately $9.4 million for the industry-specific OIT programs,
    moving from an fiscal year 1997 appropriated level of $46.3 million to
    $55.7 million in the fiscal year 1998 request. IGT encourages this
    subcommittee's support for at least the full level of the DOE fiscal
    year 1998 request, and would encourage additional funds above the DOE
    request, particularly in the glass and steel industries and other
    technical areas where natural gas applications can produce significant
    benefits.
                              natural gas vehicles
        Finally, IGT would call the subcommittee's attention to the DOE
    fiscal year 1998 request for R&D related to the more economic and
    expanded use of natural gas fueled vehicles.
        Natural gas fueled engines are now being successfully demonstrated
    in fleets of cars, vans, trucks and buses throughout our nation,
    bringing significantly lowered emissions and a shift from imported
    crude oil to important transportation sectors. That visible success
    consequently may give the impression that we have now achieved maturity
    in our development of natural gas vehicle technology, and that future
    success now should rely strictly on competitive market forces. It
    should be noted, however, that most of the success achieved to date has
    been in limited fleet applications, where fueling station
    infrastructure support exists or when fuel cost savings are substantial
    enough to offset the cost of a customer-owned central refueling
    station. If we are to extend the energy and environmental benefits of
    natural gas vehicles to more fleets, as well as to the general public,
    significant R&D must still be done on compressed and liquefied natural
    gas engine development, on-board storage, fueling stations and fuel
    quality issues. Today's engines do not take full advantage of natural
    gas' beneficial fuel properties. Higher efficiency engines and lower-
    cost vehicles can be achieved by supporting DOE's programs in these
    areas. IGT also supports DOE's deployment efforts, which have
    encouraged vehicle and engine manufacturers to stay in the market.
        Significant new benefits can be gained by expanding DOE's program
    to include large inland waterway and marine engines operating on
    liquefied natural gas (LNG). One engine on a tow boat moving barges on
    our inland waterways currently consumes as much diesel fuel annually as
    100 heavy-duty trucks. Many tow boats have up to three engines.
    Conversion of these vessels to LNG could provide dramatic improvements
    in environmental benefits, lower shipping costs and reduced national
    reliance on imported oil.
        IGT has begun to work with a consortium of equipment manufacturers,
    LNG suppliers and tow boat operators to develop the technology,
    adapting current DOE advances for rail applications, for converting tow
    boats and other marine vessels to LNG. IGT urges this subcommittee's
    support for expanded fiscal year 1998 funding in this area.
                                     ______

          Prepared Statement of the Electric Transportation Coalition

                                  introduction
         This testimony is presented on behalf of the Electric
    Transportation Coalition (``the Coalition''), a national, non-profit
    organization of electric utilities, automobile manufacturers, state and
    local governments and other entities that have joined together to
    advocate greater use of electricity as a transportation fuel. (A
    membership list is attached.) A principal activity of the Coalition is
    to encourage the adoption of incentive-based policies and programs to
    support the development of a widespread and sustainable market for
    electric modes of transportation.
        The members of the Coalition recognize the significant budgetary
    constraints faced by the federal government. We also recognize that the
    Subcommittee must ensure limited dollars are prudently allocated. The
    Coalition believes that electric vehicle-related programs of the
    Department of Energy (``DOE'' or ``the Department'') represent such
    wise expenditures in that such electric vehicle (``EV'') programs
    provide valuable support for the introduction of this new
    transportation technology, thereby furthering the national policy
    objective of increasing the use of alternative fuels in the
    transportation sector.
        The role of the federal government has been, first, to provide
    research and development support to address technological issues,
    through programs including the United States Advanced Battery
    Consortium and the hybrid propulsion systems program; and second, to
    assist industry in the testing and evaluation of the latest electric
    vehicle technologies through the Vehicle Field Test and Evaluation
    Program (previously called the Site Operators Program). A third major
    emphasis of the federal government should be to acquire electric
    vehicles for federal fleets.
        The on-going DOE EV-related programs are providing critical support
    in a number of areas that are key to the success of this new, efficient
    and clean transportation technology. These DOE programs complement, and
    augment, other work that is being undertaken by industry separately or
    in partnership with other federal agencies. If fiscal year 1998
    appropriations for these DOE programs are significantly reduced or
    eliminated, the requirements for funding would fall to other parties
    who may not be able to increase their investments even further in order
    to move this technology toward the marketplace.
             the united states advanced battery consortium (usabc)
         The Coalition urges support for the funding level of $15.8 million
    requested by the Administration for the USABC program. (In fiscal year
    1997, the Administration requested $15.32 million and the USABC was
    ultimately funded at that amount.)
        The USABC is a battery research and development program, critical
    to the advancement of EVs. Full-size battery packs and their
    components, such as cells and modules, are being developed through
    research contracts and then tested by the developers, U.S. automobile
    companies, and national laboratories. The battery packs also have been
    installed in prototype EVs being operated at electric utilities and
    testing facilities of U.S. automobile companies. In April 1996, USABC
    participants (comprised of U.S. automobile manufacturers, battery
    developers, the U.S. Department of Energy and several national
    laboratories) completed Phase I of their efforts. The auto makers that
    participate in USABC include Chrysler, Ford and General Motors (GM).
    The national laboratories participating include Lawrence Berkeley,
    Argonne, Sandia, and Idaho National Engineering Laboratory. Phase I
    comprised four elements: begin research efforts (i.e., establish
    research goals and criteria as well as award contracts); establish a
    U.S. advanced battery industry; develop an advanced battery to meet
    mid-term criteria (potential to double the range and performance of EVs
    compared to battery technologies available today) with pilot plant
    production capability; and, demonstrate design feasibility of advanced
    batteries meeting long-term goals (i.e., make EV range and performance
    comparable to that of today's gasoline-powered vehicles).
        These activities were not only successful, but cost effective. All
    the Phase I accomplishments were reached at less than projected cost.
    Phase I activities were budgeted to total $262 million (from industry
    and government); only $200 million was spent.
        Phase II will build upon the successes of Phase I and move forward
    toward the next levels of battery development. Phase II consists of
    three elements which the industry participants expect to complete by
    the end of 1999: conduct more extensive safety, durability, and life
    testing of mid-term batteries to obtain automotive validation (i.e.,
    ensure the batteries meet requirements determined by industry as
    necessary for normal automotive applications); continue research
    efforts to reduce costs associated with mid-term batteries; and,
    develop long-term battery technologies through the pilot-line
    production stages.
        It is important to note that without the limited federal assistance
    already invested, the advancements in battery technology accomplished
    to date through the USABC probably would not have been achieved.
    Individually, companies cannot, or are unwilling to, make the
    significant investment required to conduct advanced battery research.
        The majority of fiscal year 1998 funding will be directed toward
    long-term, lithium-based battery research. In later years, the USABC
    anticipates reduced expenditures as the program and projects near
    completion in 1999.
         funding for the hybrid propulsion systems development program
         The Coalition requests support for the Administration's funding
    request of $67.7 million for the Hybrid Propulsion Systems Development
    Program. This program allows industry and government to work together
    to develop a consumer attractive, ultra-low emission vehicle with high
    fuel economy. As of February 1996, three major contracts had been
    awarded to teams of developers, featuring large and small businesses
    and domestic automobile manufacturers, for the development and
    demonstration of hybrid electric vehicles (HEVs). GM and Ford have been
    working under contract on HEVs since 1993. Chrysler's efforts began in
    1996. The Phase I goal of this five-year program is a 50 miles per
    gallon (mpg) propulsion system. The Phase II goal, scheduled to be
    reached by 2004, is an 80 mpg system.
     funding for the vehicle field test and evaluation program and federal
                          fleet conversion activities
        The Coalition urges the Subcommittee to fund the Vehicle Field
    Test/Evaluation program at the level recommended by the President, $3.7
    million. The program, which was initiated in fiscal year 1997 as a
    follow-on to the Department's Site Operator Users Task Force electric
    vehicle test and evaluation program, provides critical federal support
    to industry efforts to test, evaluate and undertake fleet case studies
    of electric vehicles manufactured by original equipment manufacturers.
    Two test teams, known as ``Quality Vehicle Test Sites (QVTS)'' have
    been selected under the program to establish a uniform set of
    procedures to be used in undertaking baseline performance, reliability
    and fleet testing of EVs and for the conduct of such testing on EVs as
    they become available.
        This year, in addition to the important effort underway with
    industry, the Department plans to acquire, test and evaluate new
    electric vehicles within the U.S. federal fleet. DOE intends to focus
    federal acquisitions of electric vehicles on those equipped with
    advanced batteries that have been developed through the United States
    Advanced Battery Consortium. This important effort can help to assure
    that the federal government meets its obligations, under the Energy
    Policy Act of 1992 (Public Law 102-486), to transition to the use of
    alternative fuel vehicles.
        Finally, the Energy Policy Act of 1992 (``EPAct'') requires the
    federal government, beginning in fiscal year 1996, to convert the
    federal fleet to alternative fuel vehicles. Fifty percent of new
    vehicle acquisitions for the federal fleet (except for limited uses
    like military applications or emergency uses) must be AFVs in fiscal
    year 1998; next year (fiscal year 1999) that percentage rises to 75
    percent. On December 13, 1996, President Clinton issued an Executive
    Order (E.O. 13031) directing federal agencies, in compliance with
    federal law, to convert agency fleets to AFVs and to provide reports to
    the Department of Energy, General Services Administration and the OMB
    certifying that such acquisitions have been made by purchase, lease or
    otherwise. Federal agencies are required to use their own funds to
    acquire such vehicles.
        Importantly, the President's executive order also recognized the
    state of technology development of EVs and determined, and directed,
    that if funding is available, the Department of Energy shall provide
    financial assistance of a limited amount (no more than $10,000 per
    vehicle) to agencies that choose to acquire EVs to fulfill some or all
    of their vehicle acquisition requirements. A portion of the funds
    requested would be used to assist federal agencies desiring to test and
    evaluate EVs in their fleets.
        This requested funding for federal agency participation in
    converting portions of the federal fleet to EVs will complement the
    efforts of the Electric Transportation Coalition in its efforts to
    target major metropolitan areas for the early introduction of electric
    vehicles.
        The President's executive order is directed toward metropolitan
    areas with populations of 250,000 or more. Last year, the Coalition, in
    cooperation with other national organizations and the Departments of
    Energy and Transportation, conducted a series of workshops in ten major
    metropolitan areas across the United States. The program, known as the
    ``EV Market Launch Framework,'' was supported by the U.S. electric
    utility and automotive industries and is designed to ``ready'' the
    market for the introduction of EVs. Workshops were conducted in
    southern California; Sacramento; Phoenix/Tucson; Atlanta; Broward
    County, Florida; Detroit; Richmond; Washington, D.C./northern Virginia;
    New York City and Boston. These areas are believed to be the initial
    sites for EV introduction. Importantly, many federal agencies (and
    their fleets) are also located in these areas. The private sector,
    through the leadership of the electric utility industry, is making
    preparations to acquire EVs when they are made available; it is hoped
    that the federal government--in these same or similar areas--will do
    likewise. The funds requested by DOE will greatly assist federal agency
    decisions to include EVs in their plans to convert fleets.
        The modest amount of funding that is being requested will enable
    DOE and industry participants to continue an important cost-share
    program through which electric vehicles and associated infrastructure
    and services to support such vehicles will be evaluated and tested.
    This focused test and evaluation of new technology is a foundation upon
    which a widespread, sustainable market for electric vehicles can be
    built in the United States
        other department of energy programs of interest to the electric
                            transportation coalition
        In addition to the programs outlined above, the Coalition also
    supports funding to a number of other alternative fuel-related programs
    administered by the Department of Energy.
        The Coalition membership recognizes that electrically-propelled
    vehicles can be ``fueled'' through a variety of different sources.
    Continuing research and development efforts that will lead to a family
    of electric vehicles comprising those powered by batteries exclusively,
    those powered by batteries and an auxiliary power unit, and those
    powered by fuel cells, are critical to assuring that the U.S. leads the
    world in offering the highest-performing, cleanest and most consumer-
    attractive transportation options for the 21st century.
        Further, to assure that the marketplace is prepared and receptive
    to new forms of transportation like EVs, the Coalition strongly
    encourages full funding, at the levels requested by the Administration,
    of DOE's programs designed to create an infrastructure for alternative
    fuel vehicles, including electric vehicles, and to build public
    awareness and confidence in these new modes of transportation. These
    funds include $3.8 million for the Clean Cities initiative; $4.75
    million for infrastructure, systems and safety activities and $1.6
    million for EPAct replacement fuels programs. These outreach,
    education, organization and infrastructure deployment activities by DOE
    encourage investment by industry and help to build market acceptance
    for alternative fuel vehicles.
                                   conclusion
        The Electric Transportation Coalition requests that the
    Appropriations Subcommittee on Interior and Related Agencies fully
    support the Department of Energy's advanced automotive and alternative
    fuels programs to further the development of electric and other
    innovative modes of transportation. Successful development and
    introduction of EVs into the market will produce new, high-skill jobs
    in the United States; reduce our growing dependence upon foreign oil by
    substituting plentiful, domestically-controlled, supplies of
    electricity as an alternative transportation ``fuel"; and, most
    importantly, assist in our continuing efforts to reduce the
    environmental impacts associated with the transportation sector.
                                     ______

          Prepared Statement of the American Public Power Association

        The American Public Power Association (APPA) is the service
    organization representing the interests of over 2,000 municipal and
    other state and locally owned utilities throughout the U.S.
    Collectively, public power utilities deliver electric energy to one of
    seven electric consumers (about 35 million people) serving some of our
    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 appreciate the opportunity to submit this statement
    concerning fiscal year 1998 appropriations. We welcome Senators Gregg,
    Campbell, Dorgan and Boxer to this Subcommittee and look forward to
    working with all of you during the 105th Congress. The focus of our
    testimony will be on U.S. Department of Energy (DOE) programs within
    this Subcommittee's jurisdiction.
                       i. doe energy efficiency programs
        APPA supports the Administration's emphasis on DOE energy
    efficiency programs in its funding request for fiscal year 1998. We ask
    that this Subcommittee ensure these important programs continue to be
    among the options available to our nation's electric utilities as they
    strive to meet the increased competitive and environmental demands
    placed on them by the marketplace and society. While we realize the
    budget constraints you face, we ask for favorable action on the
    Administration's request in this area. DOE's energy efficiency programs
    received funding of $717 million in fiscal year 1995. Appropriations
    were cut 25 percent in fiscal year 1996 and were increased by 3 percent
    in fiscal year 1997. The Administration is proposing funding in fiscal
    year 1998 to approximately $688 million, restoring most of the
    reduction from the fiscal year 1995 level. Energy efficiency is
    becoming even more important in the context of debate about electric
    utility restructuring. Due to the uncertain future this has wrought,
    many utilities already have downsized or terminated some energy
    efficiency programs in order to reduce costs. Yet these programs can be
    very helpful in maximizing the overall progress made toward achieving a
    competitive, high-growth economy for our nation while maintaining the
    kind of environmental quality we all desire for the future.
        A. Electric Vehicles (EVs).--EVs provide multiple environmental
    benefits, with special emphasis on reduced tailpipe emissions and ozone
    formation in urban areas. Congress has recognized these potential
    advantages as well as the possibility for EVs to diversify the sources
    of energy used in the transportation sector, decreasing our nation's
    dependence on foreign oil imports and improving our trade balance. APPA
    urges the Subcommittee to maintain support for battery research and
    development through the U.S. Advanced Battery Consortium (USABC). This
    research has produced battery packs that have been installed into EVs
    at utilities and testing facilities of U.S. automobile companies. For
    fiscal year 1998, USABC will require approximately $15.8 million in
    federal funds. In fiscal year 1997, the Site Operator Program (SOP)
    received only $1.6 million. For fiscal year 1998, we encourage the
    Subcommittee to return funding to the fiscal year 1996 level of $2.5
    million. The SOP is a joint effort by government, utilities and
    educational institutions featuring cost-sharing by non-federal
    participants. It tests and evaluates near term electric vehicles and
    associated infrastructure in realistic operating environments and
    demonstrates market opportunities for EVs.
        B. Fuel Cells for Transportation.--We urge the Subcommittee to fund
    DOE's transportation fuel cell program at the $29.6 million requested
    by the President. It is important that these advanced technologies be
    available for application to both mobile and stationary sources. The
    availability of this technology for transportation is critical for
    cities and states that must achieve mandated federal air quality
    standards. The fuel cell vehicle is virtually pollution free and highly
    efficient. Even a 10 percent market penetration could reduce regulated
    air pollutants by more than one million tons a year and emissions of
    carbon dioxide by 60 million tons a year. (This would fulfill the U.S.
    commitment to bring its CO2 emissions back to 1990 levels.)
    It also would save 800,000 barrels of oil a day. One of APPA's members,
    the Sacramento Municipal Utilities District (SMUD), has done extensive
    research in this field because of the outstanding environmental and
    energy efficiency attributes of the technology. We also support DOE's
    $2 million program to develop fuel cells for buildings based on the
    technology developed in the vehicle program.
        C. Community and Building Technologies.--APPA supports the
    Administration's request of $303.4 million to restore previous
    reductions to these energy partnership programs. Among them are Rebuild
    America, designed to accelerate energy efficiency improvements in
    existing commercial and multi-family buildings, and DOE's Energy
    Partnerships for Affordable Homes Program, a collaboration of public
    and non-public groups working to make public and private housing more
    energy efficient and affordable. DOE can play a facilitating role in
    helping bring new technologies and standards to market. Examples of
    valuable DOE efforts in this regard include the Technology Introduction
    Partnerships (TIPS) program and Motor Challenge. TIPS, in particular,
    has been an important one for APPA member systems. Motor Challenge is a
    voluntary partnership between DOE and industry designed to promote
    adoption of motors and motor-driven equipment that increase energy
    efficiency, enhance productivity and improve environmental quality. By
    the year 2000 it is estimated Motor Challenge will generate energy cost
    savings of $1.2 billion and electricity savings of 25 billion kWh.
        Building Codes and Standards.--EPAct also requires each state to
    certify that it has reviewed its residential and commercial building
    codes to determine whether they meet energy efficiency targets. DOE is
    providing important technical assistance to encourage states to adopt
    such codes. We support the Administration's request that $20.5 million
    be provided to continue this program. Of this amount, $11.9 million
    would be used for the building standards and guidelines program and
    $8.6 million for evaluating lighting and appliance standards.
        Community Energy Systems.--District heating and cooling systems act
    as community energy systems by transporting waste energy (from local
    powerplants, industrial processes and natural resources) to buildings
    to provide heating and/or cooling. In addition to reducing emissions of
    carbon dioxide and other pollutants, these systems enhance energy
    security and cost stability, stimulate community development and
    facilitate phase-out of ozone-destroying refrigerants. APPA member
    systems that receive information and technical assistance from this
    program include those located in Burlington, VT; Fairbanks, AK; San
    Antonio, TX; Holyoke, MA, and Lansing, MI. APPA recommends $5 million
    to provide: (1) an integrated information campaign to local and state
    governments and the private sector on the benefits of district energy,
    and technical assistance and cost-shared funding for community energy
    resource assessments and feasibility studies, and (2) research,
    development and demonstration in partnership with ongoing cooperative
    international efforts to reduce costs and improve efficiencies of
    district energy technologies.
        Municipal and Community Energy Management.--This program, within
    the Office of Building Technology, provides funding to municipalities
    for conducting a variety of projects that address energy-related areas
    of greatest concern to local governments. APPA recommends this program,
    operated by the Urban Consortium Energy Task Force (UCETF), receive
    $1.6 million, funding level to that provided in fiscal year 1997. UCETF
    is a program of Public Technology, Inc. (PTI), the non-profit
    technology organization of the National League of Cities, the National
    Association of Counties and the International City/County Management
    Association. Currently 22 jurisdictions, including many public power
    communities, are represented on UCETF: Albuquerque, NM.; Austin, TX;
    Chicago, IL; Columbus, OH; Dade County, FL; Denver, CO; Greensboro, NC;
    Hennepin County, MN; Kansas City, MO; Long Beach, CA; Memphis, TN;
    Monroe County, NY; Montgomery County, MD; Orange County, FL;
    Philadelphia, PA; Phoenix, AZ; Portland, OR; San Diego, CA; San
    Francisco, CA; San Jose, CA; Seattle, WA, and Washington, D.C.
        Weatherization Assistance Program.--APPA wholeheartedly supports
    the Administration's budget request of $154.1 million for
    weatherization assistance, especially important to the working poor,
    elderly and disabled. The program helps more than 100,000 residents
    annually. Weatherization programs have the additional benefit of
    stimulating economic growth by increasing disposable income and
    creating jobs in the service sector. The DOE Weatherization Assistance
    Program has been especially effective at helping low income citizens
    afford their energy bills and at the same time reduce their energy
    usage. The funding increases requested for fiscal year 1998 should be
    provided to this valuable program to help alleviate the multi-year
    backlog of weatherization work requested locally.
        State Energy Conservation Program.--State energy offices work on
    nearly every energy efficiency issue. They encourage technology
    development, renewable energy, alternative fuels, energy emergency
    preparedness, energy facility siting, recycling, transportation
    efficiency programs, energy conservation and economic development,
    among other activities. State energy offices have been extremely
    successful in identifying the needs of local communities, businesses
    and consumers, and funding appropriate efforts to effectively transfer
    technology to constituents. With increased devolution of
    responsibilities to the states, this program offers the ideal
    combination of state-level implementation on a flexible basis with
    federal support. We ask that this Subcommittee favorably consider the
    Administration's request of $45.1 million for the State Energy
    Conservation Program. The program suffered a 50 percent cut in fiscal
    year 1996. The spending level requested for fiscal year 1998 would
    bring the program's funding level up to 85 percent of its fiscal year
    1995 level.
            ii. doe fossil energy research and development programs
        A. Fuel Cells.--Fuel cells have captured the interest of government
    and industry alike. Their modularity, high efficiency and negligible
    emissions of smog and acid rain precursors make fuel cells an important
    growth area deserving national priority. A consortium, including APPA
    member systems, along with the National Rural Electric Cooperative
    Association (NRECA), the Electric Power Research Institute (EPRI) and
    DOE, is co-sponsoring carbonate fuel cell research, testing and the
    first utility-scale demonstration of a carbonate fuel cell powerplant.
    The direct fuel cell program consists of two major efforts--the Santa
    Clara Demonstration Project and the ongoing Product Design Improvement
    (PDI) cost-shared initiative.
        The first demonstration of a U.S.-developed fuel cell powerplant
    has now begun operation in Santa Clara, CA. This 2-MW fuel cell unit
    has been grid-connected for almost 4,000 hours. It has achieved a 44
    percent efficiency level, a record for a fossil fueled powerplant of
    this size, has recorded emissions below conventional detection limits
    and is providing valuable information on fuel cell powerplant
    operations. APPA member systems participating in the consortium include
    the City of Santa Clara, Los Angeles Department of Water & Power,
    Sacramento Municipal Utility District, the City of Vernon, CA, the Salt
    River Project and Northern California Power Agency. The final phase of
    the development effort, the design and fielding of a pre-commercial
    unit, has now begun. Performance and cost targets for this final phase
    are supported by the 21 members of the Fuel Cell Commercialization
    Group (FCCG). In addition to those named as supporters of the Santa
    Clara project, APPA member systems comprising FCCG include Alabama
    Municipal Electric Authority, City of Anaheim (CA) Public Utilities
    Department, Florida Municipal Power Agency, City of Manassas (VA)
    Electric Department, City of Tallahassee (FL) Electric Department and
    Wisconsin Public Service Corporation. In fiscal year 1998, the cost-
    shared contract calls for DOE support in the amount of $20 million. We
    urge Congress to fully fund this project so that progress can continue
    toward full commercialization.
        B. Advanced Gas Turbine Program.--APPA strongly supports DOE's
    Advanced Turbine Systems (ATS), Ceramic Stationary Gas Turbine and
    Catalytic Combustion programs. These are model public/non-public
    partnerships to develop more efficient, low-emission turbines for power
    generation in utility and industrial applications. They have been
    strongly endorsed by electric utilities, the natural gas industry, the
    oil industry, electric service industries and industrial users. To keep
    these programs on track toward their long-range goals, which include a
    reduction of liquid and gaseous fossil fuel consumption, $22.2 million
    is needed for fiscal year 1998. Of this amount, $17.1 million would be
    used by the ATS Program; $4.1 million is needed by the Ceramic
    Stationary Gas Program, and $1 million would go to the Catalytic
    Combustion Program. The benefits of this investment can be enhanced and
    made even more effective if DOE accelerates the programs with near-term
    funding increments, rather than decreasing dollars and stretching out
    the program years, as proposed in the Administration's budget.
                  iii. energy information administration (eia)
        APPA asks this Subcommittee to carefully review the
    Administration's request, which would result in a 5 percent reduction
    in spending at EIA during fiscal year 1998. We are concerned that this
    level of funding is inadequate to enable EIA to continue its important
    role in data collection and dissemination. With increasing
    competitiveness in the electric utility industry, it is critical that
    utilities, government, regulators and the public all have access to
    reliable data from EIA in order to monitor pricing and structural
    changes in the electric utility industry and their effects on
    competition.
                                     ______

       Prepared Statement of the Business Council For Sustainable Energy

                                  introduction
        The Council is pleased to offer testimony to the Energy and Water
    Subcommittee of the Senate Appropriations Committee on the proper role
    for government in promoting energy research and development, as it
    relates to renewable energy programs at the Department of Energy (DOE).
        The Council is comprised of business leaders who share a commitment
    to pursue a new energy strategy designed to realize our nation's
    economic and national security goals through the rapid deployment of
    efficient, non- and low-polluting energy technologies. Council members
    include a diverse range of manufacturers, energy producers, suppliers
    of energy resources, and energy service companies.
        The diversity of our membership is further reflected in the fact
    that our member companies range in size from Fortune 500 enterprises to
    small entrepreneurial businesses. A list of Council members is
    included.
             federal programs to promote renewable energy resources
        The Council recognizes that it is the suppliers and users of
    energy--not the federal government--that ultimately will decide which
    energy sources will meet our future energy needs. However, the federal
    government does play an important role in helping the private sector
    share the risk of investing in deployment of clean technologies that,
    while at or near economical viability, face financial, informational,
    or institutional obstacles to their wide market availability.
        Today, many efforts using the ``cost-shared'' approach advocated
    during the Bush Administration are mid-course in their program cycles.
    Industry agrees that the cost-shared approach offers the best way for
    the federal government to meet its policy goals in supporting renewable
    energy resources while at the same time ensuring that federal renewable
    energy research efforts are cost-effective. As Congress seeks new ways
    to further lower those costs, the Council strongly encourages Congress
    to preserve the integrity of existing multi-year contracts with the
    renewable energy industry. The Council also urges Congress, when making
    budget cuts, to resist the urge to make broad, indiscriminate cuts that
    may cripple cost-effective and productive renewable energy programs.
    Such cuts have the unintended consequence of freezing industry R&D
    efforts and make the financial community even more reluctant to invest
    in emerging technologies. Further, such cuts run the risk of ultimately
    undermining U.S. competitiveness as our technological superiority in
    renewable technologies is equaled and perhaps surpassed by the
    aggressive research and deployment programs currently being conducted
    by our trading partners in Europe and Japan.
        Notwithstanding the significant progress renewable industries have
    made in reducing costs and increasing technology reliability, barriers
    still remain that slow their commercialization. DOE is engaged in a
    number of programs to help eliminate or mitigate the impacts of these
    barriers. I would like to briefly review a few of these programs that
    the Council believes are particularly effective.
                                      wind
        World markets for wind energy are growing at an unprecedented rate.
    Figures for 1996 indicate that total worldwide installed wind capacity
    stands at 6,190 MW, up 24 percent from a year earlier. This figure
    includes approximately 1,200 MW installed in 1996. The Council expects
    1997 additions to reach nearly 1300 MW. After 2000, The Energy
    Information Administration expects U.S. wind capacity to grow rapidly,
    reaching 12,000 MW by 2015, when wind is expected to generate enough
    power to serve more than three million homes.
        The Council respectfully requests an appropriation of $42.9 million
    for wind energy research and development in the fiscal year 1998 to
    fund projects in next generation wind turbine development ($19.7
    million recommended), cooperative research ($9.1 million recommended),
    and applied research ($14.1 million recommended). This level of funding
    is particularly important to continue development of next generation
    wind turbine technologies needed to keep the U.S. industry competitive
    in restructured domestic markets and in the fast growing, highly
    competitive international markets.
        Wind programs have been a success story for DOE's overall R&D
    program. Although wind is making headway in the electric power
    generation market, present installed wind capacity represents only 0.1
    percent of total U.S. generating capacity. Clearly there are
    opportunities for growth as wind power costs continue to fall. The goal
    of cost-shared DOE/Wind Industry efforts is to develop the next
    generation aimed at delivering electricity in the range of 2.5 cents/
    kWh.
        A relatively small increase for Cooperative Research and Testing
    will provide additional support for industry testing at the National
    Wind Technology Center (NWTC) in Rocky Flats, CO. This will allow for a
    completion of efforts to develop U.S. certification and standardized
    criteria for wind energy technologies. Ultimately, streamlined
    certification criteria will make it easier for U.S. businesses to
    market and sell American-made wind turbine technologies in
    international markets.
        The main focus of the applied research program is development of
    models to better understand aerodynamics (through wind tunnel tests),
    fatigue damage prediction and structural reliability capabilities.
    Modeling and code design work is underway at both the national
    Renewable Energy Laboratory (located in Golden, CO) and the Sandia
    National Laboratory (New Mexico).
        More and more electric utilities are becoming interested in
    generating power from large-scale wind powerplants. The world markets
    for wind turbines were valued at $1.3 billion in 1996 and turbines were
    Denmark's second leading export. This market is expected to further
    grow over the next few years. These new markets are driven by the fact
    that at least one-third of the world's population--over 2 billion
    people--do not have access to reliable energy. Maintaining a U.S.
    presence in this growing industry is a valuable investment of federal
    resources--one that will pay off many times in the next several
    decades.
                                  solar energy
        The United States currently leads the world in the diverse
    portfolio of solar technologies: photovoltaic, solar water heating, and
    solar thermal electric technologies (solar power tower, parabolic
    Troughs, and dish-engines). However, our international competitors are
    positioning themselves to take market share from the United States in
    vast, multibillion dollar world markets, as a result of strong support
    provided by their respective governments--especially in Japan and
    Germany--through a variety of aggressive development,
    commercialization, and deployment programs. Maintaining our lead will
    require strong and focused U.S. government action, not only to support
    international activities but also to securing a secure position in
    growing and domestic markets.
        Solar technologies available today include photovoltaics (PV),
    solar water and pool heating, solar process heat, and solar thermal
    power technologies. Faster integration of solar energy systems in both
    supply- and demand-side applications in our domestic economy--combined
    with support for increased exports of U.S. solar technologies to take
    advantage of emerging multi-billion dollar markets--will have the
    parallel benefits of creating thousands of new high-technology
    manufacturing jobs and improving our environment. The Council supports
    the trend toward market-driven, industry cost-shared programs designed
    to leverage federal dollars with private-sector participation to
    enhance private-sector understanding and use of these technologies.
        Improving conversion efficiency of solar panels and reducing
    manufacturing costs will play a key role in sustaining U.S. dominance
    in the area of PV. We are recommending $85 million for the Photovoltaic
    Systems Program, one of the best leveraged of any program in the
    Department of Energy. Our two most formidable competitors, Japan and
    Germany, are spending $182 million and $95 million, respectively, to
    jettison their in-country industries into increasingly lucrative world
    markets. One critical factor in the U.S. PV industry's future success
    will be its ability to leverage its financial and intellectual
    resources with those of its strategic partners in the Department of
    Energy to commercialize breakthroughs made in the areas of basic
    materials science, applied research, and systems engineering.
        The Council supports DOE cost-shared initiatives in R&D (thin-films
    and other advanced materials, $20 million recommended) and
    manufacturing (PV-MaT, $18 million recommended) which address these
    issues. Equally important is the concept of building integrated PV
    programs (PV:BONUS, $4 million recommended) where PV manufacturers,
    system integrators, and utilities are working together to reduce the
    cost of PV-generated electricity. Another good model for public-private
    efforts is the ``PV-COMPACT'' program ($14 million recommended), a
    collaborative effort involving more than 80 electric utilities
    (representing over half the electricity production in the U.S.) and
    other interested organizations to garner the economic, commercial and
    environmental benefits of PV technologies.
        PVs and other solar technologies offer the U.S. environmentally
    benign and cost-effective energy supply options in a variety of market
    applications. The market viability of these technologies is
    demonstrated in growing private sector interest in developing new
    manufacturing facilities related to solar industries. In the area of PV
    production alone, the last two years have witnessed six U.S.
    companies--including Council members United Solar Systems Corporation
    and Amoco/Enron Solar--announce plans to construct new photovoltaic
    plants. This activity is a unique example of DOE funding encouraging
    significant private-sector investment that creates new jobs. The
    Council strongly urges Congress to continue its support of public/
    private partnerships that help ensure that U.S. companies can compete
    effectively in rapidly emerging world renewable energy markets.
        The Council recommends $5.7 million in funding for the Solar
    Thermal Buildings program, a research and development program focusing
    on materials and components for solar water and space heating
    technologies for building applications. Based at the National Renewable
    Energy Laboratory and the Florida Solar Energy Center, the program also
    has a strong technology standard and certification component.
    Activities in fiscal year 1998 should include ongoing cost-shared
    technology validation projects, laboratory R&D, and customer-oriented
    applied R&D of solar building technologies with universities and
    industries.
        The Council recommends a total of $27 million for the Solar Thermal
    Electric and Process Heat programs, an R&D program on materials and
    components with a heavily cost-shared technology validation component.
    Over the past five years, the primary program focus has been
    collaboration with industry to develop advanced solar thermal electric
    technologies to the point of commercial readiness.
                            international activities
        Finally, the Council would like to offer its support of federal
    programs designed to help open important international markets for
    renewable technologies, including DOE programs such as the Committee on
    Renewable Energy, Commerce and Trade (CORECT) and GT-World.
        The developing world--Eastern and Central Europe, the former Soviet
    Union, Asia, Africa, and Latin America--presents tremendous
    opportunities for the deployment of renewable energy technologies.
    Renewables offer great flexibility to developing countries looking for
    economically viable, reliable, and clean energy supply options that can
    be used to serve growing metropolitan areas and remote rural regions
    where power is otherwise unavailable. Renewables can also help support
    the development of commercial activities such as agriculture and
    telecommunications through remote power source applications.
    Competition in rapidly growing developing country markets is intense;
    U.S. renewables manufacturers face the dual obstacles of competition
    from conventional energy sources and foreign renewables manufacturers
    buoyed by government assistance.
        In this regard, it is important to note that major U.S. competitors
    are now making aggressive moves into the renewables market. When
    measured against the relative size of their economies, Japan, Germany,
    and Sweden are each now making larger government R&D investments in
    renewables that the U.S. In fact, the U.S. taxpayer spends a lower
    portion of its R&D budget on energy than any other taxpayer in an
    industrialized, market-based economy.
        U.S. Government assistance in identifying market opportunities,
    providing education and training for energy decisionmakers in the
    developing world, and supporting demonstrations of renewable
    technologies in overseas applications promises to help ensure that U.S.
    renewables manufacturers will be successful in capturing market-share
    throughout the expanding global market for clean energy technologies
    and services.
                                   conclusion
        Promoting research, development and validation of emerging
    renewable energy technologies will result in the near-term creation of
    thousands of new jobs, a stronger economy, enhanced export
    opportunities for domestic manufacturers, and a cleaner environment.
    DOE's budget request continues federal emphasis on developing low-and
    non-polluting energy technologies and services as a means of achieving
    these goals. It utilizes cost-shared collaboratives with industry to
    leverage limited federal funds in recognition that cooperation with
    industry is vital for addressing market imperfections impeding the
    widespread use of renewables. The Council strongly supports this
    approach, and urges Congress to continue its support of federal
    research, development and validation programs for renewable energy
    technologies.
                                     ______

      Prepared Statement of Father William L. George, S.J., Assistant for
                    Federal Relations, Georgetown University

        Mr. Chairman and members of the Committee, I am Father William L.
    George, S.J., assistant to the President of Georgetown University, the
    Reverend Leo J. O'Donovan, S.J. Thank you for the opportunity to
    testify on the Fuel Cell Transit Bus Research and Development Program.
    In the past, this Committee has strongly supported the introduction of
    this key transportation technology. Your vision has successfully
    developed three, 30-foot Fuel Cell powered transit buses. These buses
    are the only Fuel Cell powered vehicles in the world capable of
    operation on liquid fuel, and currently undergo testing in various
    locations around the country.
        In fiscal year 1998, we request this committee augment the National
    Park Service (NPS) Grand Canyon Project by $1.2 million to develop the
    introduction of a Fuel Cell powered transit bus fleet amenable to the
    park operation. A specification should be included to properly identify
    Fuel Cell technology as most beneficial to the needs of the Grand
    Canyon. The suggested Fuel Cell technologies are those being developed
    under a ETA Grant to Georgetown. This activity will be the harbinger of
    the first pilot production Fuel Cell bus fleet in the country. This
    opportunity leverages all the R&D efforts of the past to solve a
    critical need of the NPS and provides a clear path for the introduction
    of the Fuel Cell technology into the transit industry.
        Two years ago, I testified that the commercialization of Fuel Cell
    technology would pass to the Federal Transit Administration (ETA).
    Funds have been provided to develop a commercially viable 40-foot Fuel
    Cell bus using a domestic Fuel Cell manufacturer. Two such vehicles are
    being fabricated, each with a different type of Fuel Cell. The first,
    which we consider a commercial prototype based upon the initial program
    authorized by this subcommittee, should be delivered in the fall of
    1997. The second is more developmental in nature and is due sometime
    later. Both are 40-foot transit buses that are designed to achieve
    commercial production.
        The next step to commercialization is to build a small, pilot-
    production fleet of buses, and apply it to a real-world situation. To
    gain wide user acceptance, it is important to choose an operation which
    provides a showcase to a broad segment of potential bus riders and
    where the attributes of the Fuel Cell power system are absolutely
    essential. The problems of the Grand Canyon National Park provide an
    ideal opportunity.
        Traffic congestion at the Grand Canyon National Park exceeds
    available road and parking capacity. The noise and pollution greatly
    detract from the serene beauty of one of our greatest National
    landmarks. The Park must convert to a pedestrian and transit-oriented
    facility. The conversion will initially require a fleet of at least 25
    transit vehicles. The NPS has made a commitment to use a transit fleet
    that is environmentally sensitive to noise and exhaust emissions. The
    NPS is currently working through the preliminary concept phase of the
    transit planning for this system.
        We strongly endorse the efforts of the Park Service to preserve the
    pristine natural setting of the Grand Canyon and believe that Fuel Cell
    powered transit buses offer the most promise. The Fuel Cell bus will
    introduce citizens from all over the country to the next generation of
    power systems. This highly visible program will serve as an exemplar of
    shared technology satisfying both Interior and commercial transit
    applications. The needs of the Grand Canyon and the commercialization
    of Fuel Cell technology for transportation will be advanced by this
    activity.
                                     ______

           Prepared Statement of the Clean Coal Technology Coalition

                                i. introduction
        This testimony concerns fiscal year 1998 funding for the Department
    of Energy's (DOE) Clean Coal Technology Program. This written statement
    is submitted on behalf of the Clean Coal Technology Coalition (CCTC or
    Coalition), a public/private organization of electric utilities, coal
    companies, technology developers, state governments' universities and
    others organized to encourage the development and deployment of clean
    coal technologies.
        The members of the Coalition understand the budgetary pressures
    resulting from fiscal constraints facing the federal government.
    However, we also understand the value of the federal government role in
    supporting prudent long-term investments in quality programs. The CCTC
    strongly urges the Congress not to sacrifice such important investments
    in our Nation's future for immediate and limited budgetary savings. We
    encourage the Members of the Subcommittee to maintain a course toward
    completion of the highly successful Clean Coal Technology Program (CCT
    Program).
        The CCT Program is a jointly funded partnership between government
    and industry to demonstrate a new generation of innovative coal
    processes in a series of showcase, cost-shared demonstration projects.
    The CCT Program has been, and continues to be, an extremely successful
    public/private partnership in which government and industry have formed
    effective partnerships in making sustained progress toward long-term
    goals.
        Last year, $124 million was rescinded by Congress from the CCT
    Program. This was in addition to $200 million that had previously been
    rescinded from the CCT Program by the Congress. These reductions have
    significantly affected the implementation and administration of the CCT
    Program and any additional reduction in funds could seriously impact
    the integrity of the program. The members of the Coalition urge
    Congress to defer any additional funding cuts and support the
    successful completion of this important, and successful program.
        The members of the Coalition support full funding for the DOE cost
    share of the remaining CCT Program projects. We believe that government
    should fulfill its commitments accepted in good faith by the private
    sector. We encourage the Congress to ensure sufficient funds are
    available for all projects which the DOE and the industry partner have
    determined should be continued and completed.
        For fiscal year 1998, the Administration proposes to rescind an
    additional $153 million and defer the release (or payment) of $133
    million in unobligated CCT Program funds until fiscal year 1999. The
    Coalition understands that the Administration's request is predicated
    upon the cancellation of previously selected projects and the combining
    of other selected projects and the funds, therefore, are no longer
    needed.
        In addition to its proposal to rescind an additional $153 million,
    the Administration is seeking an advance appropriation of $50 million
    to be made available in fiscal year 1999 to initiate the development of
    an international clean coal technology program. If approved, these
    funds are intended to ``offset'' part of the proposed $153 million CCT
    Program funding cut. The Coalition has taken a position in support of
    international cooperation and demonstration of clean coal technologies.
    We strongly believe in the importance of successfully demonstrating
    clean coal technologies, either domestically or in the international
    arena. However, DOE participation in international clean coal
    technology projects has been evaluated by the Congress in the past and
    was rejected. Therefore, unless there is a change in the will of the
    Congress, we are not able to view this proposed funding as an offset to
    the funding cut in the CCT Program. Indeed, the outcome of the
    Administration's request may simply be a rescission of the $150 million
    and no addition of $50 million for an international project in fiscal
    year 1999. Further, the outcome might simply be an additional $50
    million reduction in the program. This decision would be made in
    conjunction with the fiscal year 1998 budget to be effective in fiscal
    year 1999. We urge the Congress not to make such a conclusion.
        Given the fact that the Clean Coal Technology Program is a
    technology development program, it is possible that projects might
    experience cost overruns or expected reductions in technology costs may
    not be realized as rapidly as expected. In such cases, more funding to
    achieve technology/program related goals would be required. To that
    end, sufficient funding must be available to provide the DOE adequate
    flexibility to ensure the goals of the Program can be achieved and the
    accomplishments to date are not lost. The Coalition recommends that if
    a rescission is to be made, the Congress rescind not $153 million, but
    rather $100 million, leaving the requested advance appropriations for
    an international program in the clean coal domestic budget as a
    ``safety net'' for ongoing projects or clean coal-related initiatives
    that will have the support of Congress and the Administration.
        As the Subcommittee considers fiscal year 1998 appropriations
    allocations, we urge your continued support for this quality program
    that has assisted, and will continue to assist, efforts to obtain
    benefits derived from clean, efficient, and economic, coal-based power
    generation.
        ii. the clean coal technology program--a successful cooperative
                                  undertaking
        In 1986, the DOE established the CCT Program as an industry/
    government partnership for sharing the costs of projects that
    demonstrate innovative technologies for using coal in a more
    environmentally sound, efficient and economical manner. The CCT Program
    was borne out of recommendations by the U.S./Canadian Special Envoys on
    Acid Rain and approved, and finally recommended, by former Canadian
    Prime Minister Brian Mulroney and President Ronald Reagan. The
    establishment of the CCT Program responded to the need to insure that
    the Nation's energy demands are met, in part, by our most abundant
    energy resource--coal--in an environmentally responsible manner that
    does not jeopardize the attainment of air quality standards. Clean coal
    technologies meet these needs.
        Much of the CCT Program's success is based upon its unique
    structure. First, unlike many other federal programs, the CCT Program
    was designed to serve a specific mission: to demonstrate a variety of
    clean coal technologies. Once the selected projects are completed, the
    CCT Program will end. Second, industry is assigned a critical role in
    the project selection process. Rather than select technologies, the
    government assists in the development of technologies chosen as most
    promising by industry. Third, the CCT Program contains a repayment
    provision. Not only do U.S. taxpayers gain the environmental, energy
    efficiency, national security and job creation benefits associated with
    the development of clean coal technologies, but when the technologies
    are successfully marketed, project participants are required to repay
    the government for federal financial support received. Finally, and
    most important, the CCT Program is a cost-shared venture. Nearly two-
    thirds of all CCT Program funds have been supplied by the private
    sector (industry has invested approximately $4 billion and the Federal
    government $2 billion in the Program, even though the program only
    requires 50/50 cost-sharing.)
        The CCT Program has been implemented by the DOE through five
    solicitations and currently consists of 40 showcase demonstrations that
    are either completed, or underway, in locations across the country.
    Success of this public/private partnership may be measured by several
    factors: first, the majority of the 40 projects are completed, in
    operation, or under construction; second, for every $1 invested by the
    Federal government, private companies and states have contributed
    approximately $2, making the CCT Program one of the most successfully
    leveraged technology-development ventures managed by the U.S.
    Government; third, millions of dollars worth of commercial sales of
    clean coal technologies have been realized, thousands of new U.S. jobs
    are being supported by clean coal technology projects and the U.S.
    balance of trade has benefited (and will continue to benefit) from
    export sales of clean coal technologies.
              iii. the importance of completion of the cct program
        The federal government plays a critical role in the CCT Program by
    providing ``seed'' funding and support for these new technologies.
    Government support of clean coal technologies has mitigated the high
    risks and costs associated with technology development and the lack of
    economies of scale that attends the initial demonstration of a
    technology. In turn, this support has increased the rate of development
    and deployment of clean coal technologies. Government participation has
    been, and continues to be, vital to the successful and timely
    introduction of clean coal technologies into the marketplace.
        At the inception of the Program, Congressional appropriators had
    the foresight to provide advance appropriated funds for the clean coal
    program. This innovative funding process assured the private sector
    that the government was a committed and reliable partner and provided
    the security required by industry to invest large sums of capital into
    the CCT Program. To slash funding at this point would: (1) forfeit a
    relationship that the federal government and industry have worked hard
    to nurture and develop; (2) break government's commitment to partner
    with industry in the 40 clean coal technology demonstration projects;
    and, (3) destroy an important bond of trust. It is vitally important
    that sufficient funding be provided to the CCT Program, not only for
    the purpose of honoring government commitments, but also to provide the
    U.S. market with advanced technologies for future power generation
    needs. Adequate funding will allow the program to continue, projects to
    be completed, technologies to mature, and enable U.S. companies to
    access the potentially enormous clean coal technologies export market.
          iv. clean coal technologies yield multiple national benefits
        Currently, coal is used to generate 56 percent of U.S. electricity
    and is emerging as a feedstock for the production of alternative
    transportation fuels and chemicals. According to the Energy Information
    Administration, coal is expected to fuel about 50 percent of U.S.
    electricity production through the year 2015 and coal will continue to
    be the primary source of electric power well into the next century, not
    only in this country, but for much of the world. Given these facts and
    projections, the United States is presented with an extraordinary
    opportunity to market its new, cleaner, coal-based power systems
    overseas which will create new U.S. jobs and help reduce the U.S. trade
    deficit.
        Clean coal technologies allow the Nation not only to meet current
    and future power generation needs while utilizing our most abundant
    energy resource--coal--but also to provide that power in an
    environmentally sound manner. This is an important point. Without new
    technology, it may be difficult for generating companies to respond to
    increased electricity demand, comply with environmental regulations
    and, at the same time, refrain from increasing the cost of electricity
    production and electricity prices to consumers. Given that $200 billion
    from our economy goes for the purchase of electricity yearly, any
    economic penalty could erode U.S. competitiveness and limit economic
    growth.
        The clean coal technologies under development have proven
    successful in removing and preventing emissions. The various clean coal
    technologies can remove 30 to 90 percent of nitrogen oxides and 50 to
    99 percent of sulfur dioxides from the combustion of coal. Also,
    because some of these technologies are more efficient converting coal
    to useful energy, significantly less CO2 is emitted.
        In addition to significant environmental benefits, CCTs already
    have benefitted our domestic economy through revenue from sales and
    jobs creation. Further, a significant potential exists to export clean
    coal technologies which, in turn, will create additional U.S. jobs.
    Global electricity demand, particularly in developing countries, is
    rapidly increasing. To meet that demand, many nations will rely upon
    indigenous coal resources and foreign capital to finance utility
    projects. In fact, the U.S. Department of Energy estimates that the
    total world market for CCTs is between $250-750 billion through the
    year 2010. If the U.S. were to capture only 20 percent of that export
    market, DOE estimates as many as 29,000 to 43,000 U.S. jobs would be
    created.
                                 v. conclusion
        The Clean Coal Technology Coalition understands the budgetary
    constraints faced by the federal government and respects congressional
    action to consider plans to reduce federal spending. We ask that the
    Clean Coal Technology Program, an effective program which promotes and
    achieves multiple national goals and benefits, not be sacrificed for
    immediate savings. In the long-term, such actions only would result in
    a net loss for U.S. taxpayers from lost jobs, exports, cleaner
    technologies and domestic fuel security.
                                     ______

     Prepared Statement of Gary A. Styles, Manager, Planning and Analysis,
      Power Systems Development Facility, Southern Company Services, Inc.

                                  introduction
        Mr. Chairman and members of the committee. This statement of
    Southern Company Services, Inc., (``SCS'') is in support of $20 million
    for the Wilsonville Power Systems Development Facility in the Advanced
    Clean and Efficient Power Systems Program requested in the U.S.
    Department of Energy (``DOE'') Fossil Energy R&D budget for fiscal year
    1998. Specifically, the budget request is for $10 million in the high
    efficiency--integrated gasification combined cycle activities and $10
    million in the high efficiency--pressurized fluidized bed combustion
    activities. SCS would also like to request that the budget for the
    pressurized fluidized bed combustion activities be increased by an
    additional $2 million ($12 million total) to fund startup and
    commissioning of the advanced pressurized fluidized bed combustion
    (``APFBC'') train and support projects. Construction of the APFBC is
    currently scheduled for accelerated completion in fiscal year 1998.
    Acceleration of APFBC construction will result in lower overall cost to
    project but will increase project cash flow for fiscal year 1998.
    Without this additional $2 million, completion of startup and
    commissioning of the APFBC train at the PSDF may be delayed.
        Southern Company is actively involved in many areas of research
    including technologies that can be used by the affiliated operating
    companies to produce power more efficiently. In particular, Southern
    Company, through SCS and its operating companies, supports and conducts
    research that will help the nation utilize its coal resources while
    minimizing the environmental effects of using one of our nation's most
    plentiful and valuable resources. As a result, SCS has participated in
    projects in both DOE Clean Coal Technology program and the DOE Fossil
    Energy Research and Development program.
        The purpose of this testimony is to request this Subcommittee's
    continued support for the Power Systems Development Facility (``PSDF'')
    for advanced coal gasification and pressurized combustion research. SCS
    would also like to express appreciation to this Subcommittee for
    previous support for advanced fossil energy research. SCS specifically
    requests a minimum of $22 million for the PSDF project in fiscal year
    1998. This request assumes that the full $22 million for fiscal year
    1998 and the full $22 million that was approved by this committee for
    fiscal year 1997 are available to the project.
                    objectives of the psdf research program
        The objectives of the PSDF research program, in conjunction with
    other DOE research projects and programs, are to reduce technical risk,
    improve environmental performance, and reduce the cost of producing
    electricity from coal, our nation's most abundant fossil fuel resource.
    For many reasons, natural gas fired combustion turbines and combined
    cycle power plants are currently the most cost-effective electric power
    generating technologies in many areas of the United States. Natural gas
    fired power plants are projected to capture over 50 percent of new
    electric generation capacity over the next 10 to 15 years. However,
    many may remember that less than 15 years ago, electric utilities were
    prohibited by federal law from burning natural gas to produce
    electricity due to shortages of natural gas and its importance to
    domestic heating. During this period of energy stability, we must not,
    as a nation, become complacent or we may face another energy crisis in
    the future. Our nation needs competitive, cost effective, clean, and
    efficient coal-based technologies to meet our future electric energy
    needs.
        The fundamental purpose of the PSDF is to support the national
    program to assure competition between energy resources and, thereby,
    keep electricity prices low. Coal reserves currently accounts for over
    90 percent of the U.S. combined energy reserves supplies over 56
    percent of the energy for electric power generation. Coal is still our
    nation's lowest cost fossil fuel. However, for coal to continue to be a
    cornerstone of our national energy policy, we must reduce the capital
    cost of new coal fired power plants by at least 20 percent while
    simultaneously increasing efficiency and improving environmental
    performance. To accomplish these objectives, we must improve the
    reliability of individual plant components and optimize system
    integration and performance. This type of research can be accomplished
    most cost effectively at a dedicated pilot-scale development facility
    such as the PSDF. The PSDF is designed to be the U.S. test facility to
    support the Clean Coal Technology program and advanced coal-based power
    generation development for the next five to 15 years.
               description of power systems development facility
        The Wilsonville PSDF is a joint industry/DOE facility for
    engineering-scale testing and development of devices to remove
    particulates and other contaminants from hot gas in high-efficiency
    coal gasification and pressurized fluidized-bed combustion power
    plants. SCS and our industrial partners are supplying over $40 million
    in cost sharing to the PSDF project. The industrial partners, which
    represent a major portion of the domestic electric power generation,
    power generation design and manufacturing, construction, and coal
    mining include: M.W. Kellogg, Inc., Peabody Coal, Foster Wheeler
    Corporation, Southern Research Institute, Westinghouse Electric
    Corporation, Combustion Power Corporation, Industrial Filter & Pump,
    Inc., and the Electric Power Research Institute. Three of the
    industrial partners, Foster Wheeler, M.W. Kellogg, and Westinghouse are
    also actively involved in Clean Coal Technology demonstration projects
    that will enhance commercialization opportunities for technologies
    being developed at the PSDF. Southern Company, and its industrial
    partners in the PSDF, have financial incentives to see that
    technologies successfully developed at Wilsonville and other sites are
    effectively implemented in the market place.
        In addition to the Wilsonville, Alabama plant site, components for
    the facility are being developed at the following locations: Grand
    Forks, North Dakota (gasifier development), Houston, Texas (gasifier
    development); Livingston, New Jersey (combustor development); Menlo
    Park, California (filter fabrication); Cicero, Illinois (filter
    fabrication); Orlando, Florida (gas turbine burner), and Pittsburgh,
    Pennsylvania (filter fabrication).
        High-temperature, high-pressure gas cleanup must be perfected in
    order to use new high-performance gas turbines in coal-based power
    plants. When fully developed, these technologies will: (1) improve the
    efficiency of power generation from coal by over 25 percent compared to
    pulverized coal power plants with a corresponding reduction in
    CO2 emissions; (2) lower the cost of electricity by over 20
    percent; (3) be more acceptable to coal-based utilities than today's
    coal-gasification combined-cycle designs; and (4) reduce pollutants by
    over 95 percent.
        The PSDF will be the focal point for much of America's advanced
    electric power generation technology development in the 1990s and into
    the twenty-first century. Current plans call for the facility to
    contain five modules: (1) an advanced pressurized fluidized-bed
    combustor (``PFBC''), an extremely clean method for burning coal; (2) a
    transport reactor gas source, an advanced type of coal gasifier and
    pressurized combustor; (3) a hot gas cleanup module to test filters for
    removing fine particles and other contaminates from coal gases; (4) an
    advanced burner-gas turbine module; and (5) an advanced fuel cell. At
    the PSDF, private developers will be able to test innovative electric
    power system components--new combustors, improved cleanup systems, and
    advanced turbines and fuel cells--at a central location, saving the
    time and expense of building separate test facilities.
        The Wilsonville PSDF offers a number of advantages to the utility
    industry and to the nation by being able to address issues for the
    near, middle, and long-term management of technology risk:
      --The testing of hot gas cleanup systems addresses near-term
            developmental needs, and the schedule of the PSDF is geared
            towards providing support to Clean Coal Technology (``CCT'')
            projects for advanced power generation as these projects enter
            the design and operational phases.
      --The advanced pressurized combustion process offers the potential of
            a high efficiency system for the mid-term that may be widely
            used in repowering applications or in greenfield plants.
      --The transport gasifier/combustor has significant commercial
            potential due to its compact size and resulting lower capital
            cost.
      --The integrated gasification/fuel cell concept is a system that has
            the potential to become the most efficient and environmentally
            superior coal-based system available over the long-term.
        Another important aspect of the technologies being developed at the
    PSDF is the interaction with technologies being developed in other DOE
    programs such as advanced turbine, filter development, and the fuel
    cell programs. The Wilsonville PSDF will be the only facility in the
    world where all the components of an advanced coal-fired power plant
    can be tested in an integrated system at a practical engineering scale
    prior to assuming the risk and cost of commercial applications. This
    facility and other DOE fossil energy programs will allow U.S. electric
    utilities to maintain reasonable domestic energy prices and for U.S.
    equipment suppliers to gain a technological advantage in electric power
    production that can help increase competitiveness in foreign
    electricity markets.
                           status of the psdf project
        Construction of the M.W. Kellogg transport reactor train was
    completed in May 1996 and startup in the combustion mode began in
    August. By the end of 1996, over 800 hours of fluid mechanical testing
    were successfully completed including over 230 hours of operation on
    coal. In 1997, the transport reactor will be operated in both the
    combustion and gasification modes and tests on different particulate
    control devices will begin. Construction and startup of portions of the
    Foster Wheeler advanced PFBC (APFBC) system are scheduled to be
    completed in 1997. Tests of the fully integrated Foster Wheeler APFBC
    are scheduled to being in early 1998.
                                   conclusion
        The United States has always been a leader in energy research.
    Current DOE fossil energy research and development programs for coal
    will assure that a wide range of technology options continue to be
    available for future needs. We recognize the difficult choices that
    confront Congress when it examines the near-term effects of research
    programs on the Federal budget. We believe, however, that supporting
    advanced coal-based energy research today, in programs like the PSDF,
    will be a net plus for the economy, the federal government, and the
    American people over the long run. For the foregoing reasons, SCS
    requests your continued support for the Power Systems Development
    Facility by including $22 million in funding in the Department of
    Energy's Fossil Energy Budget. We thank you for the opportunity to
    appear before you today.
                                     ______

       Prepared Statement of the Business Council for Sustainable Energy

                                i. introduction
        The Business Council for Sustainable Energy (BCSE) is pleased to
    offer its views on the role of government in support of energy research
    and development--as it relates to energy efficiency programs at the
    Department of Energy (DOE).
        The BCSE is comprised of a diverse group of companies. Our members
    represent manufacturers, investor-and municipally-owned electric and
    natural gas utilities, energy marketers, laboratories, associations,
    and energy service companies. Our diversity is also reflected in the
    size of our member companies. We have Fortune 500 enterprises and small
    entrepreneurial businesses as members. The BCSE supports energy-related
    policies and programs that enhance the nation's economic and national
    security goals through the rapid deployment of efficient, non- and low-
    polluting technologies.
        The BCSE's membership adds value to government policies and
    programs by forming consortia and engaging in cost-shared partnerships,
    leveraging limited federal resources, and advancing U.S. industrial
    competitiveness. The international marketplace is more heavily
    subsidized by foreign governments than ever before. In fact, as a
    percentage of gross national product, U.S. government investment in
    non-defense research and development (R&D) remains well below that of
    our fiercest competitors, Japan and Germany.
        We believe that energy efficiency can become an even greater force
    in our economy and offset reliance on foreign oil, while reducing our
    production of greenhouse gases, and providing new high-technology,
    high-paying American jobs. Increased federal emphasis on energy
    efficiency is arguably the least costly and intrusive means to
    accomplish the goal of an economically viable sustainable energy
    future. The BCSE will not attempt to address all of DOE's energy
    efficiency programs given their breadth and diversity. Rather, we will
    focus on a few programs that illustrate the value of federal support.
                         ii. the transportation sector
        Perhaps the best indicator of our Nation's need to advance
    alternative-fuel vehicle (including natural gas and electric vehicles)
    research, is the current record high level of U.S. oil imports, (52
    percent) which is projected by the Energy Information Agency (EIA) to
    reach 63 percent by the year 2005. These imports contribute
    significantly to our trade deficit and threaten our economic security,
    as the Persian Gulf countries are expected to control over 70 percent
    of the global oil market by the year 2010.
    Alternative fuel vehicles
        As surface transportation in the U.S. is virtually 100 percent
    dependent on petroleum, alternative fuel vehicles (AFV), by definition,
    are the only solution to the transportation sector's vulnerability.
    Although AFVs are available today, much more research must be done and
    technical advances realized before either natural gas (NGV) or electric
    vehicles (EV) will be universally accepted, reliable, and cost-
    competitive.
        The BCSE is supportive of DOE's system optimization and tank
    storage research for NGVs, particularly in the industry's priority area
    of high fuel-use NGVs. By utilizing advanced composite materials,
    compressed natural gas (CNG) storage systems can be manufactured to
    require less weight for equal or greater amounts of fuel storage.
        The BCSE is also supportive of DOE's Clean Cities Program, which in
    fiscal year 1998 will expand its partnerships to 65 cities across the
    nation, assisting state and local governments with AFV refueling
    infrastructure development, education, and technical assistance. The
    nation-wide infrastructure corridor will be extended and a long
    anticipated expansion of the Clean Cities electric vehicle deployment
    program will be undertaken. Our members are putting their money behind
    these endorsements. While we invest in infrastructure advancements, our
    members are simultaneously building their fleets. By the end of 1997
    BCSE members, Brooklyn Union, headquartered in New York, will have 916
    NGVs in its fleet (over 85 percent of its total fleet) and Pacific
    Enterprises, headquartered in California, will have 765 NGVs.
    Battery technology
        The battery provides an example of a promising technology for
    electric vehicles. BCSE member Energy Conversion Devices, headquartered
    in Michigan, which produces the Ovonic Nickel-Metal Hydride battery, is
    a member of the U.S. Advanced Battery Consortium. Fifty-five percent of
    funding for this important partnership is provided by the private
    sector. Advanced mid-term batteries will double the approximately 70-
    mile vehicle range compared with conventional lead-acid batteries, and
    the Ovonic Nickel-Metal Hydride battery has met or exceeded the mid-
    term performance goals set by the Consortium. The electric battery and
    other promising energy storage technologies could redefine
    transportation, ending the transportation sector's reliance on foreign
    oil.
                      iii. utility/power generation sector
        EIA projects that cogeneration and non-utility applications in the
    U.S. will account for nearly 58 percent of all new electric generating
    capacity built over the next 20 years. Natural gas powered industrial
    turbines and fuel cells are the prime cogeneration candidates to meet
    the projected capacity demand.
    Fuel cell technology
        The BCSE is very supportive of DOE's fuel cell programs in the
    power generation, building, and transportation sectors. One of the
    BCSE's members, International Fuel Cell, headquartered in Connecticut,
    is engaged in cost-shared partnerships with the federal government.
    Fuel cell power systems are poised to enter the market for distributed
    power generation and, in the future, will be available in the future in
    a variety of sizes and types to fill the diverse power generating needs
    of the commercial, industrial and utility sectors. Fuel cells are very
    efficient energy converters. Compared to the average 35 percent
    efficiency of the present electrical grid, the projected fuel-to-
    electric conversion efficiency for fuel cell power plants range from 45
    percent, for the units about to enter the market, to 70 percent for
    units that could become available by 2010. The ultra-low emissions and
    ``good-neighbor'' features of fuel cells enable them to be sited close
    to the end users, eliminating losses associated with long-distance
    transport over high-voltage lines. The ultra-low emissions include
    virtually zero NOX and SO2 levels, and the lowest
    CO2 emissions of any fossil fuel power plant.
        In the transportation sector, the DOE anticipates that light-duty
    fuel cells will begin to enter the market by 2008. By 2020, it is
    projected that 75,000 barrels per day of oil could be displaced,
    amounting to $1.2 billion in energy cost savings and 2.9 million metric
    tons of carbon equivalent emission reductions. The worldwide market for
    fuel cells across the power generation, building, and transportation
    sectors is projected to be $3 billion per year in the post-2000 era
    with an exponential growth in the market after 2010.
    Gas turbines
        The BCSE strongly supports DOE's Industrial Advanced Turbine
    Systems Program. EIA's 1996 Energy Outlook and the Gas Research
    Institute Baseline Projection of U.S. Energy Supply and Demand (1996
    Edition), both project that total gas demand for electricity generation
    is projected to grow from 4.3 quads in 1994 to over eight quads in
    2015. The portion of this gas demand in industrial and commercial
    cogeneration is projected to more than double, from 1.1. quads in 1994
    to 2.7 quads in 2015. Solar Turbines, a BCSE Member, is a solely-owned
    American corporation headquartered in California. Solar Turbines is the
    leading manufacturer of industrial-scale turbines. Solar Turbines is
    expected to be the first in the marketplace with the efficiency and
    environmental improvements emanating from the successful cost-shared
    partnership with DOE. fiscal year 1998 research will be geared toward
    reducing NOX emissions at the higher temperatures (required
    to increase system efficiency) without increasing emissions of CO or
    unburned hydrocarbons.
    Utility programs
        DOE also has worked effectively with utilities and power
    authorities to promote energy efficiency. Through voluntary programs
    such as Climate Wise, DOE has obtained the commitment of industry to
    reduce its emission of greenhouse gases. Generally, activities that
    reduce emissions also reduce energy use. Climate program participants--
    such as BCSE member Sacramento Municipal Utility District (SMUD)--have
    premised their programs on sound economic principals. In fact, SMUD
    attributes its aggressive support for energy efficiency as a primary
    reason it has been able to stabilize its electricity rates.
                             iv. the building sector
        The building sector (residential and commercial buildings)
    currently uses 32 quadrillion Btu (quads) of primary energy annually.
    This is about 36 percent of total U.S. energy consumption, and includes
    66 percent of all electricity and 25 percent of all natural gas used in
    the nation. This energy costs consumers about $220 billion annually.
    The average household spends about $1,300 per year on domestic energy
    (excluding associated externalities). Energy consumption in buildings
    also has serious environmental implications. Carbon dioxide emissions
    attributable to primary energy use in U.S. buildings alone are roughly
    equivalent to the total emissions of Japan and the United Kingdom
    combined.
    Natural gas cooling technology
        Natural gas cooling is very energy efficient, especially when
    measured on a life-cycle basis (measuring energy from its source
    through transmission and distribution to the site), and its low-
    emission properties make it environmentally friendly. Additionally,
    natural gas cooling is used during the periods of the day and days of
    the year that correspond to the peak demand for electricity generating
    capacity, thereby benefiting gas customers and gas and electricity
    providers. BCSE member York International, headquartered in
    Pennsylvania, is engaged in a cost-shared partnership with DOE toward
    the development of a large natural gas commercial chiller. The cost-
    effective and efficient York chiller will allow end-users to provide
    for both the cooling needs and thermal requirements of their building.
    The planned market introduction is scheduled for 1998.
        DOE and BCSE member American Standard Companies, headquartered in
    New Jersey, and its subsidiary Trane, headquartered in Wisconsin, are
    developing a highly efficient air pre-conditioner system to be
    incorporated into Trane's ``Climate Changer'' commercial product line.
    Desiccant dehumidification-based cooling systems are beginning to show
    real promise, and DOE technical and marketing studies are an essential
    component for assured broad commercialization. Similarly, with support
    from DOE, Engelhard/ICC is developing unique desiccant systems with
    heat exchange technology to independently reduce both humidity and
    temperature while drawing 100 percent fresh air from the outside.
    Indoor air quality is a serious public health issue today and the
    American Society of Heating, Refrigeration and Air-Conditioning
    Engineers has recently promulgated ventilation requirements for
    building systems (ASHRAE-62).
    Standards and insulation
        DOE has played a constructive role in providing educational and
    technical support of building codes and standards such as the Model
    Energy Code and ASHRAE 90.1. These codes and standards--promulgated by
    private-sector organizations--help ensure that our nation's housing
    stock reflects good building construction practices and is reasonably
    energy efficient. In addition, DOE has published industrial insulation
    guidelines that will significantly improve energy efficiency in this
    sector of the economy. DOE is currently providing educational and
    technical support to help industry implement the guidelines. DOE also
    has provided valuable technical assistance to the polyurethane foam
    insulation industry, helping the industry find a substitute for CFCs as
    a blowing agent used in insulation installation. The CFC-free polyiso
    insulation performs as efficiently as the prior product.
    Federal energy management
        The federal government spends over $3.0 billion annually to light,
    heat, and cool the interior of buildings it owns and operates. These
    facilities, like those occupied by private industry, often can be
    economically upgraded and retrofitted to reduce the energy required to
    provide essential building energy services. The Federal Energy
    Management Program (FEMP) utilizes energy saver performance contracts
    for all federal agencies to maximize cost savings and federal
    purchasing power. These contracts enable facilities to take advantage
    of all life-cycle, cost effective energy efficiency and alternative
    fuel technologies. Consequently, DOE works cooperatively with several
    BCSE members, including: the American Gas Association (head-quartered
    in Virginia), the Solar Energy Industries Association (headquartered in
    Washington, DC), the Alliance to Save Energy (headquartered in
    Washington, DC) and the Gas Research Institute (headquartered in
    Illinois).
                                  v. conclusion
        DOE's energy efficiency activities reflect the broad diversity of
    the technologies and services that characterize the energy efficiency
    industry. The federal government has a long history of supporting
    energy efficiency programs based on the many societal benefits offered
    by these programs. DOE's programs are directed at mitigating market
    distortions and are consistent with sound market theory. For these
    reasons the BCSE urges Congress to continue its support for these
    efforts.
                                     ______

       Prepared Statement of the American Association of Retired Persons

        AARP appreciates this opportunity to comment on appropriations for
    the Weatherization Assistance Program. This program helps low income
    households reduce energy costs by funding such activities as installing
    weather-stripping, storm windows and insulation. Energy costs are a
    burden on low income families, often forcing such households to make
    difficult choices among basic necessities. This is especially true
    regarding the elderly, given their increased risk of fatality from
    freezing or heat stroke. Older persons also tend to live in older, less
    well-insulated homes. The bitter winter that swept across so much of
    the nation this year brought suffering to many elderly and working-poor
    families who had no choice but to remain in their drafty, dilapidated
    housing.
        AARP supports the Administration's proposed increase (from $120.8
    million to $154. 1 million). These Department of Energy grants serve as
    the core program to leverage utility and housing resources for
    weatherization activities. Currently, the program is weatherizing
    approximately 61,000 homes; the budget request would increase this to
    77,000 next year. More than 27 million homes remain eligible for such
    assistance. The Department of Energy reports that, to date, its
    weatherization program working in cooperation with Federal and State
    partners has increased the energy efficiency of over 4.6 million homes.
        Data from the Department of Energy's 1993 Residential Energy
    Consumption Survey indicate that low income households spend
    approximately 14 percent of their income on home energy, about three-
    and-a-half times the percentage paid by the typical American household.
    The survey further indicates that energy expenditures as a percent of
    income for older households are about 50 percent higher than for the
    general population.
        The Residential Energy Consumption Survey also indicates that 35
    percent of the homes occupied by older households were built prior to
    1950, compared to only 26 percent of those occupied by younger
    families. These homes are typically less well insulated, more expensive
    to heat and in need of repair. Research by AARP's Public Policy
    Institute using data from the 1993 American Housing Survey shows that
    older households, especially minority older households, are more likely
    to occupy substandard housing. For example, among owner-occupied units,
    homes of older African-American households were almost four times more
    likely to exhibit severe or moderate quality defects. The 1993 American
    Housing Survey indicates that 64 percent of low income older owners did
    not devote any funds to routine maintenance or improvements such as
    weatherization.
        Weatherization Assistance has made a crucial difference for many of
    these older households. Just over one-third of the dwellings
    weatherized under the program are occupied by older persons. The most
    recent full-scale evaluation of the Weatherization Assistance Program,
    a study by the Oak Ridge National Laboratory released in January, 1997
    indicates that Weatherization efforts through the Weatherization
    Assistance Program have reduced home energy heating expenditures by an
    average of 18 to 24 percent for households utilizing natural gas as
    their primary heating source. When combined with Low Income Home Energy
    Assistance benefits, the home energy cost burden is reduced further.
        Emphasis in the Weatherization Assistance Program with respect to
    methods used has evolved from emergency and temporary measures (such as
    caulking and weather-stripping) to inclusion of those conservation
    remedies that on average produce the highest savings (e.g., combined
    attic and sidewall insulation). Personnel in the field are now much
    more experienced in determining which conservation techniques, under
    what circumstances, are most cost effective and save the most energy.
        A particularly promising area for improvement in energy efficiency
    is in manufactured housing. Manufactured homes, more commonly referred
    to as mobile homes, are a major source of housing for low-income and
    elderly households. Although the Department of Housing and Urban
    Development adopted improved energy efficiency standards for new
    manufactured homes in 1994, the large stock of existing manufactured
    homes is not energy efficient. Households living in manufactured homes
    spend on average twice as much for energy per square foot of living
    space as do households living in single-family homes. Homes
    manufactured before 1975, representing 44 percent of the existing
    stock, are even less energy efficient.
        Currently, approximately 20 percent of all Weatherization work
    focuses on manufactured housing. Recent reports by the National Center
    for Appropriate Technology (NCAT) indicate that new Weatherization
    techniques for pre-1976 manufactured housing can reduce energy bills by
    30 to 50 percent. These techniques are now being made available by NCAT
    to Weatherization agencies across the nation. The combination of
    improved weatherization techniques and tougher energy efficiency
    standards for new manufactured homes promises major improvements in
    energy efficiency for this form of housing and substantial benefits for
    low income residents.
        DOE's supporting analysis for the 1990 National Energy Strategy
    indicated that long-term residential energy consumption could be
    reduced by 23 percent through a gradual introduction of the best
    available conservation technology. The analysis also noted that to make
    a major contribution in the short-term, conservation measures must
    focus on retrofitting existing buildings. In addition, the National
    Energy Policy Act of 1992 gives great emphasis to improving building
    efficiency. With a capability to weatherize approximately 250,000
    dwellings a year, continuation of the Weatherization Assistance Program
    is essential to meeting national energy goals.
        Thank you for this opportunity to comment on funding next year for
    this critical program.
                                     ______

     Letter from D. James G. Speight, chief executive officer, the Western
                               Research Institute
                                            Laramie, WY, April 8, 1997.
    Hon. Slade Gorton,
    Chairman, Subcommittee on Interior, Committee on Appropriations,
    U.S. Senate, Washington, DC.
        Dear Mr. Chairman: On behalf of the Western Research Institute
    (WRI), I request that the following statement be submitted as part of
    the record of proceedings for the Subcommittee on Interior's
    consideration of the Department of Energy's Office of Fossil Energy
    research and development fiscal year 1998 budget request. Specifically,
    WRI requests the Subcommittee's support of the Cooperative Research
    Program and to provide at least $6,000,000 of which we request $3
    million to support ongoing or planned cooperative research projects at
    WRI. These projects require at least fifty percent industrial cost-
    sharing. WRI has sought to implement a cooperative research program
    that is consistent with congressional intent to maximize industry
    involvement in research, development and demonstration projects. The
    following discussion reviews the accomplishments of the Cooperative
    Research Program at WRI and our expectations for fiscal year 1998.
        WRI wishes to take the opportunity to support the Of flee of Fossil
    Energy's budget request in general. We do, however, have a concern over
    the new and unprecedented orientation in the budget request allocation
    of budget resources for the Cooperative Research Program. Specifically,
    WRI believes that in the past the even handed approach to funding
    allocations within this program has benefited the Department of Energy,
    provided necessary assurances to industry partners on the program's
    viability and met congressional intent to ensure that cost-shared
    research and technology development projects within this program can
    continue unencumbered by unrelated priorities. Therefore, WRI strongly
    encourages the Subcommittee to ensure consistency and equal treatment
    in funding allocation decisions and to ensure that WRI is able to
    participate at such levels consistent with Department of Energy and
    industry priorities.
       successful leveraging of federal funding with private cost-sharing
        The Jointly Sponsored Research (JSR) Program emphasizes technology
    commercialization and continues to be highly successful and supported
    strongly and enthusiastically by WRI's industrial clientele. All of the
    available Department of Energy (USDOE) funding for each of the first
    seven years has been committed to projects.
        Since entering into a new JSRP cooperative agreement with the
    Department of Energy on March 26, 1993, WRI has put in place projects
    utilizing a total of $10,986,264 in USDOE funds. These funds have been
    combined with $14,586,209 in industrial funds to produce a $25,572,473
    program. The use of fiscal year 1997 funds will produce a program
    valued at or above $30 million while using less then $13 million in
    USDOE funds.
        While it is always desirable to acquire an asset worth more than
    $30 million for a price less than $13 million, these numbers
    substantially understate the true value of the program. What price does
    one put on the value of new technology which improves regional
    economies and enhances our quality of life? As this report illustrates,
    the technology developed during the past four years not only results in
    billions of dollars of increased or enhanced energy reserves, but a
    cleaner, healthier and safer environment as well. This means a safer
    and more secure energy and environmental future for us, our families
    and for future generations.
                       technology meeting national needs
        The Cooperative Agreement Program emphasizes technology
    commercialization consistent with the USDOE's mission to enhance the
    nation's energy security through increased efficiencies in exploration,
    production and utilization with minimal or no adverse environmental
    consequences. Technologies emerging from the program are consistent
    with this goal and include:
                             clean fuels from coal
        Thermo Ecotek announced in August 1995 the signing of an agreement
    to construct a 500,000 tons per year coal upgrading plant in the Powder
    River Basin of Wyoming. The plant cost $42 million and uses the
    Koppelman Series C Process. This process was successfully demonstrated
    by WRI and KFx Inc. in early 1994 using a pilot plant funded by
    matching funds from the USDOE JSR Program. WRI is presently working
    with KFx Inc. on projects to increase the throughput and reduce the
    cost of second generation plants which will use the improved version of
    the Koppelman Series C Process and to test foreign coals as feedstocks
    for the process.
                      increased production of domestic oil
        Present above ground steaming technology is limited to depths of
    1,800 to 2,500 feet due to large heat losses as depth is increased.
    Heat loss does not exist with the Meshekow electric downhole steam
    generator (EDSG) since steam is being produced directly at the
    formation zones. It is estimated that the U.S. has 42 billion barrels
    of heavy crude at depths between 3,000 and 5,000 feet. The high
    operating efficiencies of the EDSG will allow these formerly
    unexploitable reserves to be recovered.
        The EDSG has significant applications for deep reservoirs under
    layers of permafrost as are found in regions like Alaska's West Sak and
    Kuparuk oil fields. Alaska's fields are estimated to contain 25 billion
    barrels of proven heavy oil reserves, the majority of which are deeper
    than 3,000 feet and lie under thick layers of permafrost. Because of
    the depth and permafrost conditions, conventional above ground steam
    generation is impractical if not impossible and the EDSG may represent
    the only technology capable of recovering this oil.
          reduced environmental impact associated with oil production
        Tank bottom wastes from petroleum production are estimated to
    exceed 27,000,000 barrels in the U.S. alone with an accumulation rate
    of 2,800,000 barrels per year. RCRA regulations currently allow storage
    in permitted pits or tanks but fewer and fewer permits are being
    approved. WRI developed and patented the Tank Bottom Recovery and
    Remediation (TaBoRR) process to address this problem. The method
    results in separation of water, a light hydrocarbon stream, a heavy
    hydrocarbon stream, and an inert, non-leaching, liquid-free solid. The
    process is currently undergoing testing in a 300 barrel per day process
    development unit and negotiations are underway with a number of
    domestic and international companies for extended testing and
    deployment within operating fields.
                 remediation of hydrocarbon-contaminated sites
        Thousands of sites in the US have subsurface hydrocarbon
    contamination and many are contaminated with heavy oils. WRI developed
    the CROW process to mitigate such sites. JSR funding has enabled field
    demonstrations of the technology at the Bell Lumber site in New
    Brighton, Minnesota and the Pennsylvania Power and Light site in
    Stroudsburg, Pennsylvania. Installation and shakedown of all field
    equipment at both sites are complete. The PPL system has been fully
    operational for more than six months and has produced more than 1500
    gallons of DNAPL. The owner estimates that the CROW process has reduced
    the cost of remediation by more than $1.3 million.
                        improved environmental monitors
        The determination or screening of environmental contaminants in the
    field using portable analytical methodologies or down-hole real time
    in-situ measurements is an area of great interest in the environmental
    industry. The TROLL (SP4000) which became commercially available in
    fiscal year 1996 is a fully submersible intelligent probe designed for
    monitoring water level and temperature. Using Windows-based software,
    the TROLL can be easily programmed in the office, car or field and
    connected either to a PC, which is used for programming and receiving
    stored data, or to other units via separately-supplied wiring or
    telemetry.
                          increased health and safety
        PEAC is a hand-held computer system that provides first responders
    with fast, easy-to-use information for chemical spills and emergencies.
    The size of an emergency response area often dictates how limited
    resources are allocated. Evacuation distances vary greatly with spill
    and weather conditions. The ability to determine protective action
    distances using actual conditions is crucial to resource allocation.
    Commercial PEAC units are being produced and sales began in January
    1997.
     solving energy and environmental problems to improve our economy and
                          enhance our quality of life
        Each of the six technologies being brought to commercialization
    with the funds provided by the current Cooperative Agreement Program
    contributes to the overall goals of the U.S. Department of Energy and
    the Nation. Each has broad applicability both within the United States
    and abroad thereby helping to enhance the competitiveness of U.S. and
    western energy technologies in international markets and assisting in
    technology transfer. The downhole steam generator (EDSG) can
    potentially increase the Nation's heavy oil reserves by more than 40
    billion and perhaps as much 100 billion barrels while the Koppelman
    Series C Process is expected to generate markets for as much as 20
    millions tons annually of low sulfur coal. Both of these technologies
    contribute substantially to the goal of increased production of U.S.
    energy resources and reducing the Nation's dependence upon foreign
    energy supplies. The TaBoRR technology helps to minimize the impact of
    energy production and utilization on the environment while
    simultaneously recovering some additional ten million barrels of usable
    oil. This technology is augmented by the TROLL smart probe, CROW and
    PEAC technologies, all of which contribute measurably and substantially
    to a significantly cleaner, healthier and safer environment. The total
    funding to bring these technologies to this stage of development was
    more than $30 million with the government's share of this being less
    than $13 million. We certainly feel that these funds were well spent in
    ``Solving energy and environmental problems to improve our economy and
    enhance our quality of life.''
        America has always been a nation recognized for scientific
    excellence. This excellence has served the nation well in the years
    since its founding and is largely responsible for our country's
    dominant industrial position in the world today. The Cooperative
    Agreement Programs are ideally suited to meet scientific and industrial
    needs in that they carry this concept--which has already been proven to
    be so fundamentally sound--one step further * * *.
        scientific excellence with a commercial purpose a strategy for
                   successfully competing in a global economy
        In a high-technology global economy, technology development is
    crucial to the preservation and growth of the American economy and
    standard-of-living. Much of this technology and growth will come from
    companies which were small or nonexistent just a decade earlier. These
    emerging companies must rely upon creative and innovative Institutes
    such as me Western Research Institute to assist with their process and
    product development activities. It is a tribute to the wisdom and the
    foresight of the United States Department of Energy and the Congress
    that activities such as the Cooperative Agreement Programs exist to
    meet these crucial national needs.
        As we enter the fifth year of our present Cooperative Agreements,
    we have a sense of pride and accomplishment regarding what has been
    achieved during the first four years of the program. We hope that as
    you read the enclosed materials you shared the same pride and spirit of
    accomplishment that we do. Certainly much has been done and done well.
    Technologies developed at WRI during the past four years will add
    measurably to the Nation's energy reserves while providing a cleaner,
    healthier and safer environment. Yet much still remains to be done!
        Increasingly, the demonstration and commercialization of technology
    require strong, coordinated and focused activities often spanning
    several years. Accordingly we find our industrial partners requiring
    multi-year segments of time and funding. In turn, if meaningful
    projects are to be undertaken and commercialized, there must be some
    assurance of long-term and dependable support. Ensuring that this
    necessary support is available and put to good use in fueling our
    domestic economy is the challenge facing us all. We at the Western
    Research Institute look forward to working with members of the 105th
    Congress to accomplish this extremely important and necessary task.
                Sincerely yours,
                                   D. James G. Speight,
                                       Chief Executive Officer,
                                            Western Research Institute.
                                     ______

      Prepared Statement of Judith L. Mondre, Executive Director, City of
      Philadelphia Energy Office and Chair, Urban Consortium Energy Task
                                     Force

        This testimony is submitted for the information of the Subcommittee
    in connection with the Department of Energy's (DOE) budget requests for
    fiscal year 1998. The Urban Consortium Energy Task Force (UCETF)
    appreciates this opportunity to report to the Subcommittee regarding
    its participation in DOE's Municipal Energy Management Program.
        The UCETF is made up of local government energy policymakers and
    administrators from major urban areas around the United States.
    Currently, 22 jurisdictions are represented on the UCETF: Albuquerque,
    NM; Austin, TX; Chicago, IL; Columbus, OH; Dade County, FL; Denver, CO;
    Greensboro, NC; Hennepin County, MN; Kansas City, MO; Long Beach, CA;
    Memphis, TN; Monroe County, NY; Montgomery County, MD; Orange County,
    FL; Philadelphia, PA; Phoenix, AZ; Portland, OR; San Diego, CA; San
    Francisco, CA; San Jose, CA; Seattle, WA; and Washington, D.C. The
    UCETF is a subgroup of the Urban Consortium, an organization of the
    nation's largest cities and counties joined together to identify,
    develop and deploy innovative approaches and technological solutions to
    shared urban concerns. The Urban Consortium is a program of Public
    Technology, Inc. (PTI), which is the non-profit technology organization
    of the National League of Cities, the National Association of Counties,
    and the International City/County Management Association.
        With funding provided by the Department of Energy, Municipal Energy
    Management Program, the UCETF annually conducts a program of innovative
    energy technology development, application and replication projects.
    All projects are conducted by local government staff, in furtherance of
    the UCETF's objective of improving the energy management capabilities
    of local governments. Participation in the annual work program is open
    to larger urban jurisdictions around the United States. Projects are
    competitively selected based on merit for two categories of funding:
    energy project funding and technology transfer project funding. All
    programs must demonstrate strong partnerships, which in many cases
    include cost-sharing, from the private sector and other government
    agencies. In addition, the annual work program features a variety of
    technology transfer and solution deployment activities designed to
    widely disseminate the knowledge gained through the performance of
    local government energy projects to jurisdictions of all sizes
    throughout the United States.
              the ucetf responds to local government energy needs
        Meeting local government responsibilities in times of ever
    shrinking resources demands creative and innovative solutions. Larger
    urban governments in particular have found means to utilize energy
    policy and programs as a tool to help reduce the cost of government and
    stimulate the local economy, thereby producing more revenues that can
    be used to deliver priority services to local populations.
        The ability of local governments to respond to new challenges and
    make prudent policy choices in the energy area for the benefit of local
    citizens is directly enhanced through the UCETF program. The program
    responds to needs identified by local governments for specific support
    in addressing and resolving local energy issues. Through the program's
    emphasis on partnering, Federal funds through the Municipal Energy
    Management Program leverage more private sector dollars to help local
    governments achieve energy goals and respond to the mandates of
    national energy and environmental policies. DOE resources through the
    Municipal Energy Management Program leverage local and private sector
    in-kind and cost-sharing contributions, typically on as much as a 4:1
    basis. The return on the Federal government's investment is measured in
    reduced energy consumption, cost savings and environmental improvement
    in local areas.
        Some UCETF-funded projects have a technology focus, some address
    longer term and institutional issues, and some are policy oriented. The
    UCETF program is successful because it is able to address all of these
    areas.
        Through its focus on annual work programs, the UCETF is in a
    position to respond to changing emphases and issues in the energy
    field. As an example, significant attention in the 1996-1997 program is
    being devoted to issues involved in the introduction of increased
    competition in the electricity industry. This issue has the potential
    to significantly influence--for better or for worse--all local
    governments. But because of the breadth and complexity of the issues
    involved, many local governments are ill-prepared to deal with the
    demands of the changing marketplace. Through research projects in
    jurisdictions around the nation, and technology transfer activities,
    the UCETF seeks to become a leading national resource for municipal
    governments on approaches to, and the implications for local
    governments of, coming changes in the structure of the electricity
    industry.
        The UCETF maintains its traditional focus on application of
    technologies to increase the efficiency of energy use, and identify new
    sources of energy supply, in municipal governments. The UCETF has also
    been among the pioneers in advancing the concept of ``sustainability,''
    and the Task Force continues to focus on projects that make the linkage
    between energy, environmental and economic imperatives in local
    communities. An objective of the UCETF is to provide concrete examples
    to be followed by other local governments on how to integrate energy
    considerations into other policy disciplines in a way that supports
    local needs.
                  the ucetf's 1996-1997 applied energy program
        Through the current UCETF program, jurisdictions are conducting
    specific energy technology development/application or technology
    transfer projects addressing locally-identified priorities in the
    following areas:
        Municipal Governments and Utility Policy.--Local governments are
    extremely interested in, and in need of reliable information on, the
    local impacts of the restructuring of the electricity industry. Local
    governments will be affected by the move toward greater competition in
    electricity in a number of ways. Competition offers the opportunity for
    cost savings through reduced energy bills for local government,
    businesses and residents. Open access to transmission systems, and
    wholesale and retail wheeling will affect those local jurisdictions
    that currently offer exclusive utility franchises. Franchise fees, or
    other revenues received by local jurisdictions from utilities, may be
    affected by changes in the industry. Opportunities for greater economic
    growth may be enhanced by lower electricity rates. But with lower rates
    come pressures on utilities to discontinue activities in a number of
    areas, including energy efficiency programs, low income efforts and
    research and development, that local governments have traditionally
    valued. The UCETF is conducting five projects focusing on local aspects
    of the restructuring issue. San Jose, CA is examining the impacts of
    utility restructuring on municipal revenues, utility costs and energy
    management. Chicago is investigating the potential role of local
    government (as consumer, regulator, generator, and possibly aggregator/
    marketer of electricity) in bringing competitive electricity service to
    industrial sites. Columbus, OH, which is interested in offering retail
    electricity wheeling on its municipal grid, is conducting a case study
    for developing local distribution rates. Portland, OR is developing a
    ``GreenPower Partnership'' to offer Portland businesses the opportunity
    to buy electricity generated by non-hydro renewable resources such as
    wind, geothermal or solar. Barnstable County, MA, a leader in
    addressing how competitive franchises may be used in a deregulated
    electricity industry, is working to transfer the results of its
    research among local governments around the nation.
        Energy Usage and Supply.--Local governments face continuing
    requirements to cut energy usage and costs, and opportunities to apply
    new technologies expressly suited to local climatic conditions and
    utilizing local energy resources. Phoenix is investigating waste
    minimization and digester gas utilization at a large wastewater
    treatment plant. Yolo County, CA is monitoring an already constructed
    project to evaluate the technology and develop guidelines for
    application of technology to accelerate the rate of generation and
    capture of methane in landfills. Cabo Rojo/Mayaguez, Puerto Rico is
    addressing the use of solar assisted air conditioning and
    dehumidification systems to offset demand for electricity in
    subtropical climates. Chittenden County, VT is working to expand the
    opportunity for biomass district energy systems.
        Energy Efficiency for Local Needs/Economic Development.--Energy
    efficiency activities can contribute to creation of a sustainable urban
    environment. Urban governments also have important roles to play in
    bringing energy efficiency technologies and techniques into the
    marketplace. Urban areas are well positioned to serve as testbeds for
    such technologies, as part of an overall effort to increase energy
    efficiency. The UCETF continues to focus on projects that make the
    linkage between energy, environmental and economic concerns in local
    communities. San Francisco is conducting a project to aggregate the
    small business marketplace for energy efficiency improvements, in order
    to provide a mechanism for energy service providers to penetrate this
    important market. Albuquerque is developing guidelines for reduction in
    both water and energy use, including integrating new technologies into
    computer controls for water distribution in parks. Honolulu is
    documenting the appropriate role for electric vehicles in municipal
    government fleets. Hennepin County, MN is undertaking an innovative
    effort to combine telework centers with job training and retraining
    centers. Memphis is working to centralize monitoring and control of
    HVAC equipment by electronically linking city buildings through a
    building automation network.
        Technology Transfer.--The UCETF is conducting five projects
    specifically designed to document and transfer lessons learned through
    local government energy programs. Chula Vista, CA is documenting the
    results of its telecenter project to provide guidance on how to make
    telecenters work more effectively. San Francisco is developing a boiler
    maintenance manual including proven strategies for comprehensively
    maintaining and cost effectively improving the efficiency of existing
    municipal boilers. With UCETF support, Dade County, FL is conducting a
    conference to address sustainability and energy efficiency. Montgomery
    County, MD is developing a CD-ROM version of the Energy Design
    Guidelines, to provide an easily used and widely transferrable package
    for energy efficient building design. Tucson, AZ is documenting the
    barriers to straw bale construction for affordable, energy efficient
    housing.
        In addition to these specific technology transfer projects, the
    UCETF program features peer to peer exchange and dialogue on a variety
    of issues, and is concentrating in particular on effectively
    documenting products available for transfer from prior year programs.
    Specific efforts are underway in several areas to conduct direct
    transfer activities to widely share the benefits of Federally-supported
    energy technology development and application programs. A special focus
    in the current program has been on electricity restructuring. The UCETF
    published and distributed widely a primer, ``Keeping the Lights On''
    and supporting Resource Guide intended to introduce municipal
    governments around the nation to the issues in, and implications of,
    changes in the electricity industry.
                                   conclusion
        Through the Municipal Energy Management Program, local governments
    can be a component of the national effort to maintain the United States
    as the world's leader in developing, applying and exporting
    sustainable, environmentally benign and economically competitive energy
    technologies. The UCETF program enhances the ability of local
    governments to identify, design and implement energy policies that
    support local economic objectives, including jobs growth and retention.
    The program offers the nation a proven successful method to identify
    ways that energy technologies can be applied to aid in addressing
    community issues; to share information among local governments, and to
    prepare local officials to respond to the energy and energy-related
    environmental issues in their own communities.
                                     ______

     Prepared Statement of the Natural Gas Industry Research, Development
                          and Demonstration Initiative

                                i. introduction
        Mr. Chairman and Members of the Subcommittee:
        The Natural Gas Industry's Research, Development & Demonstration
    (RD&D) Initiative is a group comprising the American Gas Association's
    300 member companies, producers, pipelines, along with research and
    trade organizations, formed in 1989, specifically to promote
    accelerated natural gas technology development.
        The Initiative has engaged in a year-long process to identify those
    areas and technologies of greatest importance to the natural gas
    industry and the U.S. economy and environment. The Initiative supports
    the Department of Energy's (DOE) overall fiscal year 1998 request, but
    specifically seeks $7.7 million above the Administration's request in
    the following research areas: natural gas vehicle (NGV) on-board
    storage, NGV medium-and heavy-duty engine development, NGV fueling
    infrastructure, natural gas cooling/desiccants (dehumidification)
    systems, natural gas-fired engine driven systems (emission reduction
    research), and the industrial combustion program.
                            ii. natural gas vehicles
        Congress approved, in fiscal year 1997, the development of a five-
    year R&D plan for natural gas vehicles. This plan, which is being
    developed jointly by DOE, the natural gas industry, and the University
    of West Virginia, will help DOE identify future program needs. Results
    from a workshop attended by 48 technologists from all parts of the
    industry were not available to DOE in time for the fiscal year 1998
    budget request, but will be used for future budgets. Although DOE has
    responded to the industry's emphasis on ``high fuel-use'' medium-and
    heavy-duty fleet vehicles, the Initiative has additional
    recommendations to Congress to match the priorities of the 5-year plan.
    The Initiative seeks $4 million above DOE's request for fiscal year
    1998. The priorities are: (1) on-board storage/smart fuel systems, (2)
    heavy-duty engine development and (3) fueling infrastructure R&D.
        One of the major obstacles for natural gas vehicles (NGV) remains
    on-board storage systems for compressed natural gas (CNG) and liquefied
    natural gas (LNG) fuels. Improvements are needed in CNG and LNG fuel
    system inspection techniques, LNG fuel tank structural integrity, fuel
    storage integration, and lower cost materials such as high strength
    steels and composite materials for CNG storage. The Initiative proposes
    an increase of $1.5 million above DOE's fiscal year 1998 request for
    these programs.
        Heavy-duty engines are predominantly compression ignition (diesel)
    because they have higher potential energy efficiency than spark
    ignition (gasoline) engines. Natural gas does not lend itself readily
    to the compression ignition cycle; but, past research has shown
    potential in utilizing prechamber dual-fuel (natural gas/diesel pilot
    injection) and lean-burn natural gas prechamber (spark ignition)
    technology in accomplishing reduced exhaust emissions. To develop
    natural gas engine technologies which avoid knock and achieve power and
    torque levels comparable to the highest-rated diesels, further research
    and development of direct-injection natural gas engines should be
    pursued. The Initiative requests $1 million above DOE's fiscal year
    1998 request to be divided between spark and compression ignition
    cycles.
        Lower-cost refueling technology remains critical to the healthy
    development of the NGV industry. Cryogenic fuel metering and fuel
    supply components are essential to ensure that current and future
    equipment will be the safest and most cost-effective available. Since
    this is a priority in the 5-year plan, the Initiative requests an
    additional $1.5 million above DOE's fiscal year 1998 request to begin
    this research.
                            iii. natural gas cooling
        Natural gas cooling is extremely energy efficient, especially when
    measured on a life-cycle basis (measuring energy from its source
    through transmission and distribution to the site), and its low-
    emission properties make it environmentally friendly. Additionally,
    natural gas cooling is used during the hours of the day and days of the
    year that correspond to the peak demand for electricity generating
    capacity, thereby benefiting gas customers and gas and electricity
    providers. DOE's funding for gas cooling programs continue to remain
    modest despite strong interest and cost-sharing from industry. The
    Initiative seeks an appropriation $10.25 million in fiscal year 1998
    for natural gas cooling, or $1.7 million above DOE's request.
        The Initiative advocates increased government participation on
    absorption and adsorption technologies. DOE should develop a program
    comparing and contrasting all available GAX technologies, including
    solid sorbtion technologies, with the objective of developing the best
    overall hardware that meets a direct materials and cost labor target of
    $500 per cooling ton at production levels of 1000 units per year
    (comparable to an electric heat pump). In parallel, DOE should
    undertake a cost-reduction program with industry partners to improve
    the GAX absorber, solution pump and air coil designs.
        Desiccant dehumidification systems for heating and cooling are
    poised to make a substantial impact on the marketplace and the
    environment. Although test procedures for the first desiccant products
    on the market have been developed in conjunction with public/private
    partnerships and support, further rating system work remains. Liquid
    desiccants can be configured in split systems to offer potential for
    significant sensible cooling in addition to latent cooling
    capabilities. Other potential areas of research include coupling engine
    and desiccant technology for the recovery of waste heat; advanced
    controls integration; and education, and training programs. The
    Initiative seeks $700,000 above DOE's fiscal year 1998 request for
    these activities.
        Finally, the Initiative again urges DOE to work with industry on
    reduction of emissions from gas-fired engine driven systems,
    particularly large commercial systems that are beginning to penetrate
    the HVAC market. These systems require pollutant emissions reduction in
    anticipation of future regulatory requirements. The Initiative seeks $1
    million for these activities.
                           iv. residential appliances
        With over 53 million customers and five quadrillion Btus (quads) of
    annual gas usage in 1995, the residential gas market is an important
    segment of the nation's population and energy use. Residential gas
    demand is about one-half of total residential energy consumption and
    almost a quarter of total U.S. natural gas use. The number of
    residential gas customers is expected to grow by 10-11 million by 2005.
    In 1995, 64 percent of newly constructed homes utilized natural gas.
    The Initiative will be working with DOE in fiscal year 1998 and fiscal
    year 1999 to expand research in the areas of space heating, (burners
    and heat exchangers), combination systems and appliance interface
    modules (metering systems).
                             v. industrial systems
        The natural gas industry supports DOE's mission to improve the
    global competitive position of U.S. industry. We encourage DOE to help
    develop new technologies needed in the next century by our key
    industrial sectors. These sectors include the seven ``vision'' areas
    identified by the Office of Industrial Technology. The Initiative's
    members are currently supporting the development of new and innovative
    technologies in cooperation with these industries, particularly in the
    areas of glass and steel. In the steel market, R&D is needed on rapid
    strip heating, billet preheating and steel reheating. In the flat glass
    market, R&D is needed to develop a glass heating furnace to reduce
    emissions and to improve productivity and oxygen-enriched air staging
    to provide lower operating costs and lower NOX emissions.
        The metal casting vision also offers significant opportunities for
    natural gas research. Innovative technologies and materials development
    can raise the temperature limits of gas-fired heat treating furnaces,
    reduce operating costs, improve productivity and parts quality, and
    reduce emissions and fuel consumption.
        Finally, the Initiative recommends the restoration of funding ($2
    million) in fiscal year 1998 to continue important basic research in
    the areas of combustion systems and controls, with specific emphasis on
    the automation of industrial processes. In fiscal year 1997 DOE
    requested and received $2 million for these important cross-cutting
    activities.
                                vi. gas turbines
        The Energy Information Agency's (EIA) 1996 Energy Outlook and the
    GRI Baseline Projection of U.S. Energy Supply and Demand (1996
    Edition), both project that total gas demand for electricity generation
    is projected to grow from 4.3 quads in 1994 to over eight quads in
    2015. The portion of this gas demand in industrial and commercial
    cogeneration is projected to more than double, from 1.1 quads in 1994
    to 2.7 quads in 2015. Growth in gas-fired cogeneration capacity is
    strongly impacted by the move toward a more competitive electric
    market. Low operating and capital costs and increased-efficiency
    systems are the key to this market.
        The Initiative strongly supports full funding for DOE's Advanced
    Turbine Systems Program, particularly the industrial-size gas turbine
    system. Research will be geared toward reducing NOX
    emissions at the higher temperatures (required to increase system
    efficiency) without increasing emissions of CO or unburned
    hydrocarbons. The critical research issues include: system efficiency,
    emissions, and materials development and performance demonstrations.
                                vii. fuel cells
        The Initiative places a very high priority on DOE's Office of
    Fossil Energy's entire Stationary Fuel Cell program. Additionally, the
    Initiative supports DOE's Office of Energy Efficiency's Building Sector
    Micro-generation program. Fuel cell power systems are poised to enter
    the market for dispersed power generation and will be available in the
    future in a variety of sizes and types to fill the diverse power
    generating needs of the commercial, industrial and utility sectors.
    Fuel cells are very efficient energy converters. Compared to the
    average 35 percent efficiency of the present electrical grid, the
    projected fuel-to-electric conversion efficiency for fuel cell power
    plants range from 45 percent, for the units about to enter the market,
    to 70 percent for units that could become available by 2010. The ultra-
    low emissions and good-neighbor features of fuel cells enable them to
    be sited close to the end users, eliminating losses associated with
    long-distance transport over high-voltage lines. The ultra-low
    emissions include virtually zero NOX and SO2
    levels, and the lowest CO2 emissions of any fossil fuel
    power plant. The worldwide market for fuel cells is projected to be $3
    billion dollars per year in the post-2000 era with an exponential
    growth in the market after 2010.
        The Initiative supports DOE's efforts to integrate fuel cells into
    commercial building applications. Applications in the building sector
    represent a large market for fuel cells and a significant opportunity
    for increased energy efficiency. The combination of electricity and
    heat generation give these market entry units an overall energy
    efficiency of 85 percent and make them an excellent candidate for
    commercial building sector applications.
                            viii. natural gas supply
        The GRI Baseline Projection of U.S. Energy Supply and Demand, 1977
    Edition, of U.S. domestic natural gas production shows a potential
    increase from 19 quads in 1995 to 27.3 quads by 2015, an increase of
    over 40 percent. By the year 2015, about 40 percent of U.S. gas supply
    will depend on the availability of new technology. There have been
    significant environmental benefits to the nation from greater gas use
    in our energy mix. The Initiative supports DOE's natural gas supply
    request. For gas supply to continue to grow, at low and stable prices,
    new and improved technology advances will be needed to reduce
    exploration and production costs and increase recovery per unit of
    activity.
        DOE should concentrate on working with industry to develop and
    demonstrate a set of tools that result in a minimum of formation damage
    during the drilling, reduce the cost and improve the efficiency of gas
    recovery from mature fields, and minimize overall environmental
    impacts.
        Federal assistance is also needed to ensure that new regulations
    can be met adequately, consistently and at the lowest possible cost. A
    recent National Petroleum Council study noted that the combination of
    projected requirements of the Clean Air Act Amendments of 1990, the
    Safe Drinking Water Act and other pending federal legislation could, by
    the year 2010, raise overall gas-producing costs by as much as $750
    million per year.
                                 ix. conclusion
        U.S. Industries compete in a global economy where our major
    competitors, such as Japan, Great Britain and Germany, provide
    substantial assistance in RD&D and commercialization activities.
    Natural gas technologies can provide substantial benefits to the nation
    through cleaner air, job creation, energy efficiency, energy security
    and increased competitiveness in the world marketplace.
        Thank you for the opportunity to present our views.
                                     ______

               Prepared Statement of the American Gas Association

                                i. introduction
        Mr. Chairman and Members of the Subcommittee: The American Gas
    Association (A.G.A.) is a trade association representing over 200 local
    natural gas distribution companies (LDCs) in the United States, which
    together distribute more than 90 percent of the natural gas delivered
    in this country.
        The A.G.A. has engaged in a year-long process to identify those
    areas and technologies of greatest importance to the natural gas
    industry and the U.S. economy and environment. The A.G.A. supports the
    Department of Energy's (DOE) overall fiscal year 1998 request, but
    specifically seeks $7.7 million above the Administration's request in
    the following research areas: natural gas vehicle (NGV) on-board
    storage, NGV medium-and heavy-duty engine development, NGV fueling
    infrastructure, natural gas cooling/desiccants (dehumidification)
    systems, natural gas-fired engine driven systems (emission reduction
    research), and the industrial combustion program.
        A.G.A. continues to maintain concern that DOE's Home Energy Rating
    System (HERS) program does not measure energy efficiency on a life-
    cycle basis (measuring energy from its source through distribution to
    the site.) Nonetheless, A.G.A. supports the fiscal year 1998 request of
    $1.5 million to be used only to continue existing state pilot programs.
    Also, A.G.A. is supportive of DOE's Weatherization Assistance Program
    and is working with the states toward making homes more energy
    efficient.
                            ii. natural gas vehicles
        Congress approved, in fiscal year 1997, the development of a five-
    year R&D plan for natural gas vehicles. This plan, which is being
    developed jointly by DOE, the natural gas industry and the University
    of West Virginia, will help DOE identify future program needs. Results
    from a workshop attended by 48 technologists from all parts of the
    industry were not available to DOE in time for the fiscal year 1998
    budget request, but will be used for future budgets. Although DOE has
    responded to the industry's emphasis on ``high fuel-use'' medium-and
    heavy-duty fleet vehicles, A.G.A. has additional recommendations to
    Congress to match the priorities of the 5-year plan. A.G.A. seeks $4
    million above DOE's request for fiscal year 1998. The priorities are 1)
    on-board storage/smart fuel systems, 2) heavy-duty engine development,
    and 3) fueling infrastructure R&D.
        One of the major obstacles for natural gas vehicles (NGV) remains
    on-board storage systems for compressed natural gas (CNG) and liquefied
    natural gas (LNG) fuels. Improvements are needed in CNG and LNG fuel
    system inspection techniques, LNG fuel tank structural integrity, fuel
    storage integration, and lower cost material such as high strength
    steels and composite materials for CNG storage. A.G.A. proposes an
    increase of $1.5 million above DOE's fiscal year 1998 request for these
    programs.
        Heavy duty engines are predominantly compression ignition (diesel)
    because they have higher potential energy efficiency than spark
    ignition (gasoline) engines. Natural gas does not lend itself readily
    to the compression ignition cycle; but, past research has shown
    potential in utilizing prechamber dual-fuel (natural gas/diesel pilot
    injection) and lean-burn natural gas prechamber (spark ignition)
    technology in accomplishing reduced exhaust emissions. To develop
    natural gas engine technologies which avoid knock and achieve power and
    torque levels comparable to the highest-rated diesels, further research
    and development of direct-injection natural gas engines should be
    pursued. A.G.A. requests $1 million above DOE's fiscal year 1998
    request to be divided between spark and compression ignition cycles.
        Lower-cost refueling technology remains critical to the healthy
    development of the NGV industry. Cryogenic fuel metering and fuel
    supply components are essential to ensure that current and future
    equipment will be the safest and most cost-effective available. Since
    this is a priority in the 5-year plan, the Initiative requests an
    additional $1.5 million above DOE's fiscal year 1998 request to begin
    this research.
                            iii. natural gas cooling
        Natural gas cooling is extremely energy efficient, especially when
    measured on a life-cycle basis (measuring energy from its source
    through transmission and distribution to the site), and its low-
    emission properties make it environmentally friendly. Additionally,
    natural gas cooling is used during the hours of the day and days of the
    year that correspond to the peak demand for electricity generating
    capacity, thereby benefiting gas customers and gas and electricity
    providers. DOE's funding for gas cooling programs continue to remain
    modest despite strong interest and cost-sharing from industry. A.G.A.
    seeks an appropriation $10.25 million in fiscal year 1998 for natural
    gas cooling, or $1.7 million above DOE's request.
        A.G.A. advocates increased government participation on absorption
    and adsorption technologies. DOE should develop a program comparing and
    contrasting all available GAX technologies, including solid sorption
    technologies, to develop the best overall hardware that meets a direct
    materials and cost labor target of $500 per cooling ton at production
    levels of 1000 units per year (comparable to an electric heat pump). In
    parallel, DOE should undertake a cost-reduction program with industry
    partners to improve the GAX absorber, solution pump and air coil
    designs.
        Desiccant dehumidification systems for heating and cooling are
    poised to make a substantial impact on the marketplace and the
    environment. Although test procedures for the first desiccant products
    on the market have been developed in conjunction with public/private
    partnerships and support, further rating system work remains. Liquid
    desiccants can be configured in split systems to offer potential for
    significant sensible cooling in addition to latent cooling
    capabilities. Other potential areas of research include coupling engine
    and desiccant technology for the recovery of waste heat; advanced
    controls integration; and education, and training programs. A.G.A.
    seeks $700,000 above DOE's fiscal year 1998 request for these
    activities.
        Finally, A.G.A. again urges DOE to work with industry on reduction
    of emissions from gas-fired engine driven systems, particularly large
    commercial systems that are beginning to penetrate the HVAC market.
    These systems require pollutant emissions reduction in anticipation of
    future regulatory requirements. A.G.A. seeks $1 million for these
    activities.
                           iv. residential appliances
        With over 53 million customers and five quadrillion Btu's (quads)
    of annual gas usage in 1995, the residential gas market is an important
    segment of the nation's population and energy use. Residential gas
    demand is about one-half of total residential energy consumption and
    almost a quarter of total U.S. natural gas use. The number of
    residential gas customers is expected to grow by 10-11 million by 2005.
    In 1995, 64 percent of newly constructed homes utilized natural gas.
    A.G.A. will be working with DOE in fiscal year 1998 and fiscal year
    1999 to expand research in the areas of space heating (burners and heat
    exchangers), combination systems and appliance interface modules.
                             v. industrial systems
        The natural gas industry supports DOE's mission to improve the
    global competitive position of U.S. industry. We encourage DOE to help
    develop new technologies needed in the next century by our key
    industrial sectors. These sectors include the seven ``vision'' areas
    identified by the Office of Industrial Technology. A.G.A.'s members and
    associated commercialization center are currently supporting the
    development of new and innovative technologies in cooperation with
    these industries, particularly in the areas of glass and steel. In the
    steel market, R&D is needed on rapid strip heating, billet preheating
    and steel reheating. In the flat glass market, R&D is needed to develop
    a glass heating furnace to reduce emissions and to improve productivity
    and oxygen-enriched air staging to provide lower operating costs and
    lower NOX emissions.
        The metal casting vision also offers significant opportunities for
    natural gas research. Innovative technologies and materials development
    can raise the temperature limits of gas-fired heat treating furnaces,
    reduce operating costs, improve productivity and parts quality, and
    reduce emissions and fuel consumption.
        Finally, A.G.A. recommends the restoration of funding ($2 million)
    in fiscal year 1998 to continue important basic research in the areas
    of combustion systems and controls, with specific emphasis on the
    automation of industrial processes. In fiscal year 1997 DOE requested
    and received almost $2 million for these important cross-cutting
    activities.
                                vi. gas turbines
        The Energy Information Agency's (EIA) 1996 Energy Outlook and the
    GRI Baseline Projection of U.S. Energy Supply and Demand (1996
    Edition), both project that total gas demand for electricity generation
    is projected to grow from 4.3 quads in 1994 to over eight quads in
    2015. The portion of this gas demand in industrial and commercial
    cogeneration is projected to more than double, from 1.1 quads in 1994
    to 2.7 quads in 2015. Growth in gas-fired cogeneration capacity is
    strongly impacted by the move toward a more competitive electric
    market. Low operating and capital costs and increased-efficiency
    systems are the key to this market.
        A.G.A. strongly supports full funding for DOE's Advanced Turbine
    Systems Program, particularly the industrial-size gas turbine system.
    Research will be geared toward reducing NOX emissions at the
    higher temperatures (required to increase system efficiency) without
    increasing emissions of CO or unburned hydrocarbons. The critical
    research issues include: system efficiency, emissions, and materials
    development and performance demonstrations.
                                vii. fuel cells
        A.G.A. places a very high priority on DOE's Office of Fossil
    Energy's entire Stationary Fuel Cell program. Additionally, A.G.A.
    supports DOE's Office of Energy Efficiency's Building Sector Micro-
    generation program. Fuel cell power systems are poised to enter the
    market for dispersed power generation and will be available in the
    future in a variety of sizes and types to fill the diverse power
    generating needs of the commercial, industrial and utility sectors.
    Fuel cells are very efficient energy converters. Compared to the
    average 35 percent efficiency of the present electrical grid, the
    projected fuel-to-electric conversion efficiency for fuel cell power
    plants range from 45 percent, for the units about to enter the market,
    to 70 percent for units that could become available by 2010. The ultra-
    low emissions and good-neighbor features of fuel cells enable them to
    be sited close to the end users, eliminating losses associated with
    long-distance transport over high-voltage lines. The ultra-low
    emissions include virtually zero NOX and SO2
    levels, and the lowest CO2 emissions of any fossil fuel
    power plant. The worldwide market for fuel cells is projected to be $3
    billion per year in the post-2000 era with an exponential growth in the
    market after 2010.
        A.G.A. supports DOE's efforts to integrate fuel cells into
    commercial building applications. Applications in the building sector
    represent a large market for fuel cells and a significant opportunity
    for increased energy efficiency. The combination of electricity and
    heat generation give these market entry units an overall energy
    efficiency of 85 percent and make them an excellent candidate for
    commercial building sector applications.
                            viii. natural gas supply
        The GRI Baseline Projection of U.S. Energy Supply and Demand, 1977
    Edition, of U.S. domestic natural gas production shows a potential
    increase from 19 quads in 1995 to 27.3 quads by 2015, an increase of
    over 40 percent. By the year 2015, about 40 percent of U.S. gas supply
    will depend on the availability of new technology. There have been
    significant environmental benefits to the nation from greater gas use
    in our energy mix. A.G.A. supports DOE's natural gas supply request.
    For gas supply to continue to grow, at low and stable prices, new and
    improved technology advances will be needed to reduce exploration and
    production costs and increase recovery per unit of activity.
        DOE should concentrate on working with industry to develop and
    demonstrate a set of tools that result in a minimum of formation damage
    during the drilling, reduce the cost and improve the efficiency of gas
    recovery from mature fields, and minimize overall environmental
    impacts.
        Federal assistance is also needed to ensure that new regulations
    can be met adequately, consistently and at the lowest possible cost. A
    recent National Petroleum Council study noted that the combination of
    projected requirements of the Clean Air Act Amendments of 1990, the
    Safe Drinking Water Act and other pending federal legislation could, by
    the year 2010, raise overall gas-producing costs by as much as $750
    million per year.
                                 ix. conclusion
        U.S. Industries compete in a global economy where our major
    competitors, such as Japan, Great Britain and Germany, provide
    substantial assistance in RD&D and commercialization activities.
    Natural gas technologies can provide substantial benefits to the nation
    through cleaner air, job creation, energy efficiency, energy security
    and increased competitiveness in the world marketplace.
        Thank you for the opportunity to present our views.
                                     ______

      Prepared Statement of Aris Melissaratos, Vice President of Science,
               Technology and Quality, Westinghouse Electric Co.

                                  introduction
        Advanced natural gas based power generation systems can save
    energy, reduce greenhouse gas emissions and lower electricity
    generation costs. Natural gas based systems are clean, efficient and
    economical. Westinghouse is participating with the Department of Energy
    in two key programs under the auspices of the sub-committee.
    Westinghouse urges Congress to maintain its commitment to the next
    generation of natural gas fueled power generation technologies by
    increasing funding beyond the Administration's fiscal year 1998 request
    for the Department of Energy's Advanced Turbine System (ATS) Program
    and for Advanced Concepts Fuel Cells, i.e. Tubular Solid Oxide Fuel
    Cells. We request that funding for the Fossil Energy ATS Program be
    increased from the Administration's $31,379,000 recommended level to
    $46,400,000, and to increase funding for Advanced Concepts Tubular
    Solid Oxide Fuel Cells from $12,288,000 to $16,000,000. Both
    technologies represent a step change in performance over existing
    alternatives, both can provide near team benefits and returns for our
    nation in the form of more high quality jobs and increased exports; and
    both would enable a deregulated utility industry to reduce electricity
    prices to consumers while reducing the emission of greenhouse gases.
                        advanced turbine systems program
        The Advanced Turbine Systems (ATS) Program is a broad-based
    technology initiative, pooling the resources of the federal government,
    universities, and private industry to provide the nation with the
    world's most economical and cleanest approach to multi-hundred megawatt
    electricity generation. The ATS will enable a step change in
    performance over today's gas turbines. The ATS is being designed to be
    over 25 percentage points more efficient than conventional coal fired
    power plants, to emit a fraction of the greenhouse gases and to be
    installed quickly and economically to meet growing energy needs. The
    ATS will allow the nation's utilities and private power generator to
    save fuel and produce electricity at a lower cost, benefiting both
    consumers and the economy.
        The ATS Program, since its initiation in fiscal year 1992, has been
    structured with a clear set of deliverables and aggressive completion
    date. The program goal is to develop technologies and innovative
    concepts applicable to natural gas fired combined cycle power
    generation systems, which will allow electrical efficiencies greater
    than 60 percent, while providing electricity at significantly lower
    cost than current combined cycle power plants; and operating with much
    reduced environmental impact.
        Westinghouse is an industry participant in the utility portion of
    the ATS Program, bringing a significant share of private funding to the
    initiative. We are working with over 200 industrial, university and
    small business partners to integrate the new technologies needed to
    deliver ATS to the power generation industry. Benefits of a technology
    partnership approach include a more rapid introduction of new
    technology into the economy, a broader diffusion of technologies across
    a number of industries and, with ties to universities, providing hands-
    on experience for tomorrow's scientists and engineers.
        The ATS Program was originally structured to include a full-scale
    power plant demonstration of the technology, with selection of a lead
    contractor in fiscal year 1998. We urge, instead, that the program be
    restructured to maintain two industrial participants through testing of
    the prototype engines. Out-year program savings from the elimination of
    the full-scale demonstration power plant are sufficient to continue
    funding for two contractors and still result in an overall savings to
    the program. By completing prototype engine tests, needed verification
    of the key technology component is accomplished; but the cost and
    lengthy permitting and approval process need for a full-scale plant is
    avoided. The Administration's low funding request and planned
    downselect will, in effect require DOE to pick a technology winner,
    creating an unfair market advantage for the selected contractor. The
    low funding request will also stretch the length of the program and
    delay market energy of the technology.
        Added ATS funding in fiscal year 1998 will support completion of
    the technology development program started in prior fiscal years and
    the start of manufacture of a prototype engine. The restructured
    program we recommend would still accomplish the original program goals
    of allowing the introduction of this beneficial technology by 2000. It
    would maintain a strong U.S. market competition by continuing two
    suppliers and would provide U.S. industry with a competitive advantage
    over international competitors. And, it would encourage more rapid
    utility industry acceptance by demonstration the viability of the
    technology, without funding a full demonstration power plant.
                      fuel cells advanced concepts program
        The Fuel Cells Advanced Concepts Program for fiscal year 1998 is a
    cost-shared program directed toward cost reduction and product
    improvement for tubular solid oxide fuel cells (SOFC's) prior to market
    entry by the private sector. Westinghouse is the recognized world
    leader in SOFC technology development and SOFC system demonstrations at
    increasingly larger scale and is committed to making the Tubular Solid
    Oxide Fuel Cell Program and success. Westinghouse has assembled a
    world-class team utilizing the resources of government, national
    laboratories, and private industry to provide the world with the
    highest efficiency and cleanest fossil fuel power generation technology
    known today. The SOFC, when combined with a gas turbine will be able to
    achieve electrical efficiencies approaching 75 percent. The SOFC/Gas
    Turbine power system has the potential to be the world-wide standard
    bearer for distributed power generation in the early 2000's and beyond,
    thus developing an industry of high quality U.S. jobs.
        The SOFC/Gas Turbine power system is simple and synergistic,
    building on the best characteristics of both components. SOFC is the
    highest temperature fuel cell and its exhaust gases are exceptionally
    well suited to drive a gas turbine resulting in these ultra-high
    electrical efficiencies. Even in relatively small power systems
    generating only a few megawatts, electrical efficiencies of up to 75
    percent can be obtained previously unheard of with fossil fuels.
        The ecological benefits are huge. There is a 90 percent reduction
    in NOX emissions and 20 percent reduction in CO
    emissions compared to today's best fossil fuel power generation
    technology. The system produces virtually no SOX since the
    sulfur is removed prior to the natural gas entering the SOFC. In
    addition, the high temperature heat produced by the SOFC is very
    conducive to co-generation applications that will further increase the
    effective use of our fossil fuels.
        The SOFC is a modular system that can range in size from several
    hundred kW to hundreds of megawatts. Its high efficiency in relatively
    small sizes is ideal for distributed power generation with the many
    advantages of that concept especially where small increases in power in
    local areas are needed.
        SOFC power systems have excellent export potential in the over 500
    billion dollar international electric energy market where fuel costs
    are high and electrical grids are weak thus creating many well paying
    jobs here in the U.S.
        Matched by the DOE, Westinghouse and its partners have invested
    over $90,000,000 in this technology. This year we will begin the final
    phase of this development program. The ultimate goal of our program is
    to operate a 1.3 MW SOFC/Gas Turbine power system in cooperation with
    the Environmental Protection Agency (EPA) and others at EPA's Fort
    Meade Laboratory in 1999, then expanding that to a 2.5 MW SOFC/Gas
    Turbine power system in 2000. Our program also includes the necessary
    cost reduction and product improvement activities to assure commercial
    success. Along these lines Westinghouse has recently completed a
    $13,000,000 pilot manufacturing plant to test these on-going process
    improvements.
        With the low funding request for Fuel Cells Advance Concept,
    coupled with the decrease in the Stationary Fuel Cell Program budget
    under the auspices of the Committee over the past few years, it is
    unclear that DOE will be able to continue funding for all the
    contractors and achieve commercialization of any advanced fuel cell
    technology with the foreseeable future. Congress is, therefore, urged
    to increase the overall Fuel Cell Program budget from $46,000,000 to
    $50,000,000 in fiscal year 1998.
                                public benefits
        Increased funding for the ATS Program and the Tubular SOFC Program
    is a sound application of federal resources.
      --Federal support is a good investment because it provides a high
            yield, relatively near term return to the economy in the form
            of lower energy costs, more jobs and more exports.
      --Federal support benefits the nation's technology base and supports,
            not only the power generation industry, but possible use in a
            host of spin-off application. High temperature ceramics and
            other advanced materials, enhanced aerodynamic component
            designs and low emissions combustion systems can also have host
            of industrial applications.
      --Federal support is needed because the aggressive goals of these
            programs, requiring improved emissions and better economics
            carry too great a technology risk for private industry to
            address alone because the long-term ecological and long-term
            energy saving benefits rarely accrue sufficiently to the
            original developer of the technology. The Programs continue the
            kind of public-private partnership that is needed to develop
            and commercialize high risk technologies.
                                  conclusions
        Applying new technology to meet the demands of a changing market is
    always a challenging task. Together, we have made great progress in
    developing clean, advanced natural gas power generation turbine and
    fuel cell systems. Together, we have moved from basic concepts and
    bench scale experiments to full scale component tests. We have made a
    mutual commitment to move these advanced technologies into the market.
    Continuing Federal support is critical to that task. As we approach
    fiscal year 1998, we urge Congress to strengthen its commitment to
    technology development as a sound approach to meeting our nation's
    future energy needs.
        The Advanced Turbine System and Advanced Concepts Solid Oxide Fuel
    Cells both hold the promise of being better economically and
    environmentally at meeting the electricity generation needs of our
    nation and the world. Westinghouse is convinced that, with our
    university, small business and industrial partners, and, in cooperation
    with the Federal government we can develop and introduce these advanced
    power generation systems sooner and better than our international
    competitors. Westinghouse remains committed to that task and urges
    Congress to reaffirm its commitment.
                                     ______

    Prepared Statement of the Integrated Petroleum Environmental Consortium

        It is proposed that the U.S. 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 Fossil Energy
    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 8000 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 US 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 convict 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 re-evaluate 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 development. Industry 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 on 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 dissertations. The integrated
    approach to technology development will give these students much needed
    pilot and field experience and industrial contacts.
        Competitive business practices 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 positron to determine the financial risks of
    potential environmental costs and manage those risks in order to
    maximize profitability. 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, TPEC
    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 direct
    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 RAPIDITY, and TU's ``Petroleum Abstracts''.
        IPEC also will provide a central 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 risk 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 shills 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 industrial
    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 organizational 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 of 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 an appropriation of $4 million for fiscal year 1998
    and the succeeding fiscal years 1999, 2000, 2001, and 2002 through the
    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 John T. Nimmons, Managing Director, Alliance To
                       Commercialize Carbonate Technology

        Mr. Chairman and Members of the Subcommittee, my name is John
    Nimmons. I am submitting this testimony as Managing Director of the
    Alliance to Commercialize Carbonate Technology (``ACCT''). ACCT's
    purpose here is to urge fiscal year 1998 funding of the Department of
    Energy's molten carbonate fuel cell (``MCFC'') program in the amount of
    $20 million requested by M-C Power Corporation, and for continuation of
    a strong MCFC program.
        As some of you know from prior years' testimony, ACCT is a working
    alliance of utilities and industry, created to help bring MCFC
    technology into commercial markets by the year 2000. ACCT's members
    include potential purchasers, installers and users of MCFC power
    plants, as well as potential investors in MCFC technology. During the
    past year, ACCT's membership has continued to grow. Members now include
    twenty-two leading electric and gas utilities, natural gas suppliers,
    and manufacturing industries from throughout the United States, Canada,
    Western Europe, and South America, as well as America's premier
    electric and natural gas research organizations. ACCT's principal focus
    is the MCFC power plant under development by the team of M-C Power
    Corporation, the Institute of Gas Technology, the Bechtel Corporation,
    and Stewart & Stevenson Services, Inc. (the ``Development Team'').
        ACCT wishes to make the following points before this Subcommittee,
    each elaborated further in the testimony that follows:
        1. MCFC technology has made impressive progress in the last year.--
    Early lessons have been well learned, and the new MCFC cogeneration
    facility at NAS Miramar is performing well.
        2. NAS Miramar's 250 kilowatt demonstration remains an early step
    toward a megawatt-scale commercial power plant.--Major design
    improvements and cost reductions must still be achieved before MCFCs
    approach commercial readiness.
        3. Although Miramar is attracting strong private sector interest,
    uncertainty over electricity restructuring continues to postpone new
    technology investments.
        4. Electricity restructuring will expand markets for clean,
    modular, generation from MCFCs, even while it creates near-term
    uncertainties about what roles will be played by emerging industry
    entities.
        5. Staying the development course now is critical.--Increased
    private sector confidence, and hence future investment, will depend on
    MCFC developers continuing to meet milestones based on previous Federal
    commitments.
        1. mcfc technology has made impressive progress in the last year
        M-C Power's development effort has made important strides during
    the past year. Building on earlier lessons, the Company developed a new
    fuel cell stack design which it has now incorporated in the new
    demonstration unit recently started up at NAS Miramar. The Company also
    introduced a first-of-its-kind fuel processing unit (or ``reformer'')--
    uniquely designed for MCFC use--which converts natural gas to the
    hydrogen-rich fuel used in the cell stack. Reports from the Miramar
    test site are very encouraging, indicating that both the new stack and
    the new reformer have performed extremely well since the plant's
    startup in early February.
        The Miramar demonstration remains in its early stages. However, its
    performance to this point in a cogeneration application has already
    moved the technology beyond anything previously accomplished, and begun
    to fulfill the expectations of ACCT member companies for this phase of
    the development effort. If the plant continues to perform well as it
    goes through its paces over time, it will constitute a major milestone,
    and one which ACCT companies have considered an essential building
    block for future commercial interest in the technology.
    2. miramar's 250 kilowatt demonstration remains an early step toward a
                       1 megawatt commercial power plant
        The Miramar facility is expected to demonstrate to ACCT companies
    and others that the major MCFC components--especially the new stack and
    reformer--can function together in an integrated power plant, using
    thermal energy from the fuel cell reaction to heat the reforming
    process, and providing useful electricity and heat to the facility
    site. These represent critical advances over the previous state of the
    art. However, they remain far short of what will be required for a
    power plant intended for commercial markets.
        All who support MCFC development recognize that major design
    improvements and cost reductions must be achieved before MCFCs can
    approach commercial markets around the turn of the century. This is no
    different from many other energy technologies at similar stages in
    their development: the first imperative is to show that the concept can
    work--and only then to embark on simplifying and refining equipment
    design, finding cheaper materials, and developing more efficient
    production methods to reduce costs to near-commercial levels and set
    the stage for true manufacturing economies.
        In addition, ACCT members and others who expect to invest in MCFC
    power plants will need to see convincing evidence of performance,
    reliability, and durability over time. This will require demonstration
    of the power plant configuration actually intended for commercial
    markets. Only after these requirements are met will private sector
    companies be in a position to commit to commercial investments, and
    thus to help the developer attract the private financing needed for its
    commercial manufacturing facility.
       3. uncertainty over electric industry restructuring continues to
                      postpone new technology investments
        Electric industry restructuring has accelerated dramatically during
    the past year. In addition to this Congress, virtually every state
    utility commission is considering some form of restructuring of
    utilities subject to its jurisdiction: there is no electric utility in
    this country whose immediate future will not be affected by it. Every
    one of our utility members is fundamentally reassessing its business,
    including the key question of whether it will continue to provide
    generation at all--and if so, through what business entity and with
    what relation to its regulated transmission and distribution functions,
    whatever those turn out to be.
        Last year we noted that the turmoil of restructuring and the
    headlong rush toward electricity competition had dramatically reduced,
    and in many cases eliminated, utility spending on research and
    development. This is especially true for generation-related RD&D, since
    utilities and state commissions increasingly recognize that generation
    will be spun out of the regulated utility as a competitive function,
    and monopoly ratepayers can no longer provide financial support for
    advanced generation research.
        Proactive utilities are increasingly looking to supplant
    traditional ratepayer RD&D spending with shareholder-supported
    investments in technologies that promise advantages in emerging
    competitive markets. However, the enormous uncertainty attending
    restructuring has radically shortened the horizon for such investment.
    Many companies today will not invest in emerging technologies unless
    they can expect returns within two or three years, at the most. For
    MCFC technology, which still requires significant design and
    manufacturing innovations and cost reductions to approach commercial
    readiness, meaningful investment returns will not occur within that
    horizon. In the current utility climate of regulatory ferment and
    short-term competitive focus, this presents a short-term investment
    obstacle for most companies--even those which foresee a key role for
    fuel cells in the medium and long term.
        We stress that reduced availability of advanced generation RD&D and
    investment dollars does notreflect on the value of these efforts, but
    on the vast uncertainty faced by companies confronting restructuring of
    one of the country's largest, most complicated, and most important
    industries, and on the prospect that utilities will need to divest
    their generation functions. For these reasons, ACCT's leaders believe
    it is vitally important to continue Federal RD&D support through the
    next several critical years, until the costs and risks of MCFC
    technology can be reduced to near-commercial levels, and the returns
    can more closely match the compressed investment horizons of newly
    competitive energy companies. For Congress to do otherwise would be to
    abandon substantial public and private investments already in place and
    now beginning to pay off, and to forego the economic, environmental,
    and competitive advantages that advanced fuel cell development can
    deliver.
     4. electricity restructuring will expand markets for clean, modular,
                             generation from mcfcs
        Although restructuring has created tremendous uncertainties about
    what roles will be played by existing industry entities and their
    successors, we believe that it can only enhance long-term market
    prospects for small, clean, modular generation sources such as MCFCs.
        As this Subcommittee knows, MCFCs offer dramatic efficiency and
    environmental advantages over both conventional generating technologies
    and other types of fuel cells. These advantages will be increasingly
    important as electricity supply continues to evolve from large central
    station generation plants to smaller, cleaner, more flexible power
    plants located near the customers they serve, and avoiding the risks
    and costs of major infrastructure investments in uncertain times. The
    flexibility of modular plants with short lead times will become
    especially critical as competition supplants monopoly electricity
    supply, and customers demand products and services that can readily
    respond to changes in business conditions.
        In emerging competitive markets, new generation capacity will be
    added in much smaller increments than traditional central station
    plants. However, the high fuel efficiencies characteristic of large
    central plants cannot be achieved with conventional technologies in
    small sizes. On the other hand, MCFCs as small as a few hundred
    kilowatts can actually exceed central plant efficiencies--while
    offering emissions characteristics orders of magnitude cleaner than
    conventional equipment.
        For many utility and industrial applications, MCFCs also offer
    distinct advantages over other types of fuel cells now under
    development. For example, MCFCs promise as much as 50 percent higher
    fuel conversion efficiencies than phosphoric acid fuel cells (``PAFC'')
    now entering the market, with even lower air pollutant emissions--
    amounting to less than 10 percent of current Federal air quality
    standards. For this reason, California's South Coast Air Quality
    Management District has categorically exempted fuel cells from the
    nation's most stringent air quality permitting requirements. In
    addition, MCFCs can produce much higher quality heat as a byproduct of
    electric generation than that produced by PAFCs, so they are especially
    suitable for utility and industrial cogeneration uses that PAFCs cannot
    serve. MCFCs are also far less sensitive to fuel contaminants than, for
    example, polymer fuel cells. For this reason, MCFCs are expected to
    operate well not only on natural gas, but on domestic renewable fuels
    such as landfill gas and methane from sewage digesters, which the M-C
    Power team expects to demonstrate within the next several years.
       5. staying the development course now is the key to building the
            confidence needed to encourage private sector investment
        A vital part of ACCT's mission is to help build industry confidence
    in MCFC technology, and to develop a framework for early purchase
    commitments to shepherd the technology into the marketplace. ACCT
    members have and will continue to work closely with the M-C Power Team
    to help it meet its development milestones, because they believe this
    is the key to creating private sector confidence and positioning the
    technology for success once its development is complete.
        Increased private sector confidence, and hence future investment,
    will depend on MCFC developers continuing to meet these milestones,
    which in turn depends on the availability of Federal funds previously
    committed, and on the continued support of this Subcommittee. For
    ACCT's members, the successful startup of NAS Miramar is an extremely
    important accomplishment, for which we wish to acknowledge not only the
    M-C Power Development Team, but the constancy of this Subcommittee, the
    Congress, and the Department of Energy. At the same time, we recognize
    that much remains to be done. The power plant must be scaled up
    fourfold to the one-megawatt size planned for commercial deployment,
    while substantially reducing its costs through design and materials
    innovations. The megawatt-scale plant must then be demonstrated to the
    satisfaction of the market under a range of climatic conditions, fuel
    types, and operating regimes critical to ACCT's utility and industry
    members, and to other potential purchasers and users.
        Each phase of this effort is planned to include substantial
    private-sector cost sharing. However, the magnitude of the undertaking
    and the risks it entails remain beyond the means of individual ACCT
    companies. MCFCs promise important societal benefits in the form of
    resource conservation and efficiency, environmental improvements, lower
    energy costs, and an enhanced competitive position for US industries.
    For these reasons, we continue to believe that substantial Federal
    funding remains both appropriate and essential to advance the
    technology and help US firms compete in world energy markets over time,
    and we urge this Subcommittee to stay the course and continue its
    support of the Department of Energy's MCFC program at levels that will
    permit the sustained, orderly development our members need to see.
        I am grateful to the Subcommittee for this chance to present our
    views, and I thank you on ACCT's behalf.
                                     ______

       Prepared Statement of Peter J.A. Tijm, Manager, Syngas Conversion
                   Systems, Air Products and Chemicals, Inc.

        I strongly encourage the Subcommittee to provide an additional $5.8
    million fiscal year 1998 appropriation for the Indirect Liquefaction
    program. These monies would be in addition to the DOE Fossil Energy
    fiscal year 1998 Budget Request of $4.2 million. This appropriation
    would enable continuation of proof-of-concept demonstrations at the
    DOE-owned LaPorte, Texas Alternative Fuels Development Unit (AFDU) and
    provide for supporting laboratory research and development.
        The Federal Government has committed to a national objective of a
    cleaner environment through the use of cleaner burning transportation
    fuels that are environmentally superior to gasoline and diesel fuels
    based on crude oil. These innovative fuels will need to yield
    significantly lower emissions of particulate matter (PM10),
    NOX, SOX and CO2. One can calculate
    that replacement of crude-derived diesel by synthetic diesel, made
    through Indirect Liquefaction, would have resulted in a reduction of
    100-160 million tons of carbon dioxide per year for the U.S.
    transportation sector alone in 1995, a reduction of 25-40 percent
    (``Automotive Engineering,'' Feb. 1991, Vol. 99, No. 2, pp. 15-18, and
    1995 IEA statistics). However, while the Government has established
    goals and objectives to reduce emissions, no commercially accepted
    technology currently exists that would enable such goals to be met.
    This lack of appropriate technology creates situations in which
    compliance deadlines are extended rather than met. Indirect
    Liquefaction is an emerging technology with the capacity to solve these
    problems.
        The Indirect Liquefaction program is directly supportive of the
    Federal Government's stated goals for cleaner air, higher energy
    effciency/lower CO2 emissions, and reduced dependence on
    foreign oil. The information resulting from this program will lead to:
    Industrial acceptance and early commercialization of indirect
    liqefaction technologies; production of highly efficient,
    environmentally superior transportation fuels and premium chemicals
    from our nation's own vast reserves of fossil fuels, as well as
    renewables and environmentally disadvantaged energy sources; production
    of transportation fuels in quantities sufficient to enable vehicle road
    tests; and fulfillment of national environmental and energy security
    objectives.
        The Indirect Liquefaction program--an industry/university/national
    laboratory partnership--has broad-based support, as evidenced by the
    recent industrial cost-sharing from Air Products and Chemicals, Inc.,
    Eastman Chemical Company, Bechtel, and Shell Oil Company.
        U.S. industries, universities and national laboratories are working
    at a laboratory scale to develop transportation fuels: That will meet
    the Government-desired emissions regulations; that can be handled in a
    manner that is compatible with the existing transportation fuel
    distribution infrastructure; and that are produced from a variety of
    indigenous feedstocks including coal, natural gas, biomass, as well as
    petroleum coke and a variety of other environmentally disadvantaged
    feedstocks.
        However, laboratory-scale experiments alone provide insufficient
    information for industry to take the significant technical and economic
    risks involved in scaling up technology from the laboratory to
    commercial operation. LaPorte AFDU operation provides engineering and
    economic data, the intermediate step that will enable industry to
    assess scaleup and commercialization potential for the production of
    superior liquid transportation fuels from domestic carbonaceous
    feedstocks. Additionally, the AFDU produces these superior fuels in
    sufficient quantity to allow road testing in actual vehicles.
        Since 1985, Congress and the Department of Energy have invested
    over $25 million to build and maintain the LaPorte AFDU as a state-of-
    the-art facility for synthesis gas conversion. Results of AFDU
    operations have proven the efficiency and cost-effectiveness of
    producing methanol via the Liquid Phase technology. This technology
    provides a means to lower U.S. dependence on foreign sources of
    methanol. Significantly, the value of the AFDU is becoming
    internationally recognized; a growing number of energy and chemical
    companies are indicating a strong interest in sharing in the cost of
    operating the LaPorte AFDU to develop various transportation fuels and
    premium chemicals via Indirect Liquefaction technologies. These
    technologies first involve the well-established process of synthesis
    gas production from any carbonaceous feedstock, yielding a mixture
    comprising primarily hydrogen and carbon monoxide, with all polluting
    compounds removed. The new, emerging Liquid Phase technologies convert
    this clean synthesis gas to environmentally superior liquid
    transportation fuels and oxygenated fuel additives that can use the
    existing transportation fuel infrastructure--a major financial
    consideration.
        From its inception in 1984 through 1990, the LaPorte AFDU was used
    to develop the Liquid Phase Methanol (LPMEOHTM) technology.
    This program was aimed at converting carbon-rich synthesis gas, such as
    that derived from coal, biomass or waste materials like petroleum coke
    or bottom-of-the-barrel residual oil, to methanol. This application has
    appeal both for the power and the refinery processing industries for
    coproduction of electric power and methanol for power peak shaving or
    as a chemical feedstock. With support from Chem Systems Inc., the
    Electric Power Research Institute, and Air Products, DOE pioneered the
    LPMEOHTM process, introducing first-of-a-kind technology
    that successfully converted carbon-rich synthesis gas into methanol.
    Success at LaPorte led to a proposal and subsequent award under the
    Clean Coal Technology Program. The resulting LPMEOHTTM
    process demonstration unit, located at Eastman Chemical's Kingsport,
    Tennessee chemical complex, was started up in early April and is
    producing methanol at the design capacity of 260 tons per day.
        With successful technical development of the Liquid Phase Methanol
    technology, the program objectives were broadened to develop other
    environmentally superior transportation fuels and chemicals from
    synthesis gas. In 1991, a unique government/university/national
    laboratory/industrial partnership was created to effectively conduct
    this research and development work with periodic operations at the
    LaPorte AFDU. This program has successfully progressed with
    contributions from DOE/FETC, Sandia National Laboratory, renowned
    researchers at five universities, and seven cost-sharing industrial
    partners (currently Air Products, Eastman Chemical, Shell and Bechtel;
    in the past, support has also been received from Exxon, UOP and
    Statoil).
        The expanding U.S. dependence on foreign oil is neither good for
    our country's balance of payments nor for national security. U.S. oil
    imports are currently more than 50 percent of consumption and are
    expected to reach 60 percent by 2010. Much of the imported oil comes
    from countries that are politically unstable and that may be opposed to
    U.S. interests. Reliance upon foreign petroleum can be reduced by the
    use of Indirect Liquefaction technology, which can utilize many
    different domestic carbon based feedstocks. Thus, Indirect Liquefaction
    can offer the nation a path to a cost-competitive, environmentally
    friendly alternative to foreign oil.
        Environmental legislation and a drive toward energy efficiency has
    spurred the growth of the diesel fuel market. However, to meet
    environmental requirements, clean-burning, high-cetane-number,
    alternative diesel fuels must be developed. A diesel fuel with high
    cetane number features superior, smokeless combustion characteristics.
    The work at LaPorte has initiated the steps needed to reach this goal.
    In 1991, LaPorte was operated to generate dimethyl ether (DME) from
    synthesis gas through a one-step process. DME is viewed in the industry
    as a valuable chemical feedstock, and in 1995 it was proposed as a
    clean-burning, alternative diesel fuel with a high cetane number. Air
    Products is proposing to conduct additional DME operations at LaPorte
    using a more robust catalyst system than previously tested. In the
    laboratory, the combustion products from DME exhibited significant
    emissions reduction of hydrocarbons, carbon monoxide and particulate
    matter relative to low-sulfur petroleum diesel. Levels below the
    requirements for Ultra Low Emission Vehicles (ULEV) were obtained.
    DOE's Office of Transportation Technologies has expressed significant
    interest in conducting further fuel characterization tests, including
    fleet testing, on DME produced in this one-step process. In addition,
    Air Products' proprietary research has developed new diesel fuel
    additives/replacements. The cetane numbers obtained for these unique,
    super-clean diesel alternatives far surpass the cetane number of crude
    oil-based, commercial diesel fuels (i.e., 100 to 225 vs. 40 to 50).
    Continued operation of the LaPorte AFDU would make sufficient
    quantities of fuel available for these, as well as other tests.
        Most importantly, the replacement of conventional diesel by
    synthetic fuels produced by Indirect Liquefaction can reduce tailpipe
    carbon dioxide emissions enormously. One can calculate that this
    replacement for the U.S. transportation sector alone would result in a
    tailpipe reduction of over 100 million tons of carbon dioxide per year,
    a decrease of over 25 percent (``Automotive Engineering,'' Feb. 1991,
    Vol. 99, No. 2, pp. 15-18, and 1995 IEA statistics). Depending on the
    feedstock used to manufacture the synthetic diesel, one could even
    claim an effective reduction of up to 20 percent in CO2
    generation ``from well to wheel,'' an achievement in reducing factors
    that cause Global Warming. Should the exponential growth in the U.S.
    diesel market continue at its present rate, this reduction could be a
    multiple of the aforementioned. One can therefore not stress enough the
    importance of hastening industry's acceptance of the technology.
        Continued LaPorte funding also enables the development of improved
    technologies for the production of clean hydrocarbon fuels using the
    Liquid Phase version of the Fischer-Tropsch process. Shell Oil, along
    with UOP, Statoil, and Exxon, participated, both financially and
    technically, in operations at LaPorte in 1992, and again in 1994. Shell
    Oil provided significant cost share in its participation in Liquid
    Phase Fischer-Tropsch operation in 1996, and is expected to return once
    more in the fall of 1997. These companies are particularly interested
    in the conversion of natural gas to liquid transportation fuels, and
    came to LaPorte because of its unique capabilities. The existence and
    resources of the LaPorte unit are the key reasons why private sector
    companies have committed to pooling their financial and technical
    capabilities to test such new routes to cleaner fuels. Private sector
    funding to date for LaPorte operations is more than $6 million. This
    new, growing role for LaPorte is a strong endorsement for the
    continuation of Federal support for this facility.
        In the future, LaPorte will lend itself conveniently to another
    important development in the production of low-cost liquid fuels via
    Indirect Liquefaction. Production of synthesis gas alone can represent
    well over 50 percent of final product cost, and recently, considerable
    research has been underway to reduce the cost of synthesis gas
    production via selective high-temperature membrane systems. The
    development-scale demonstrations of these technologies in the near
    future could be efficiently accommodated at the LaPorte site, where the
    infrastructure is already in place for such demonstrations. The
    synthesis gas generated could then be used in conjunction with existing
    syngas conversion equipment, allowing the complete step-by-step
    demonstration of fuels production from raw material. Such technologies
    may be well suited to convert the vast quantities of Alaskan North
    Slope natural gas to liquid fuels via the Liquid Phase Fischer-Tropsch
    process. These liquid fuels will utilize the Trans-Alaskan Pipeline,
    thereby extending its functional life. Additionally, a synthesis gas
    generation/liquid fuels production facility could be a feasible source
    of power generation and transportation fuels in remote locations for
    U.S. military needs and for use in under-developed countries.
        DOE's Alternative Fuels Development Unit at LaPorte is a unique
    national resource.--It can be cost-effectively used to test proof-of-
    concept approaches for producing clean fuels and high value additives
    via synthesis gas. This synthesis gas can be produced not only from
    coal, but also from natural gas, renewables, and environmentally
    disadvantaged feedstocks such as petroleum coke or bottom-of-the-barrel
    residual oil. Congress is to be commended for its foresight and its
    past support for the LaPorte Indirect Liquefaction program. The
    industry/university/national laboratory partnership for the development
    of Liquid Phase technology would not have been able to continue without
    DOE funding support. In fiscal year 1997, however, funding constraints
    for the Liquid Phase program led to a curtailment of operations at
    LaPorte, although some research activities have continued. In fiscal
    year 1998, if sufficient Government funding is provided, Air Products
    plans to test a Dimethyl Ether process developed under the DOE program.
        The focus of the Indirect Liquefaction program is consistent with
    the national policy of meeting environmental goals through the
    development of clean-burning alternative transportation fuels and
    premium chemicals from a vast array of domestic carbonaceous
    feedstocks. We therefore request that the Subcommittee continue and
    build upon the important work being carried out at the LaPorte AFDU to
    make these goals a reality. Funding of $5.8 million, an amount in line
    with the yearly average dollars needed for facility operations and
    supporting research, should be added to the DOE Fossil Energy Budget
    Request of $4.2 million for the fiscal year 1998 appropriation.
                                     ______

      Prepared Statement of Richard L. Lawson, President, National Mining
                               Association [NMA]

        The National Mining Association's (NMA) member companies account
    for approximately three-fourths of the coal production in the United
    States, over one billion tons annually, and the vast majority of mined
    minerals including iron ore, copper, gold, silver, uranium, lead, zinc,
    and phosphate. The purpose of this statement is to present the NMA's
    views on fiscal year 1998 programs for the following agencies: Office
    of Fossil Energy (Department of Energy), Energy Information
    Administration (Department of Energy), U.S. Geological Survey
    (Department of the Interior), the Office of Surface Mining (Department
    of the Interior), the Bureau of Land Management (Department of the
    Interior) and the Forest Service (Department of Agriculture).
                            office of fossil energy
        NMA advocates that the Federal government's partnership with the
    private sector be continued as an integral part of the foundation for
    enhanced utilization of our domestic resources. The continuing
    development of innovative technologies will provide improvements in
    energy efficiency and environmental protection rather than reduced
    availability of energy through the imposition of drastic regulatory
    requirements. NMA supports the following Fossil Energy programs to
    enhance the clean and efficient utilization of coal by developing and
    facilitating commercialization of innovative technologies.
        Clean coal technology program.--The Clean Coal Technology Program
    is a highly successful industry and government partnership designed to
    demonstrate a new generation of innovative coal processes. This
    partnership must be continued in order to obtain the multiple benefits
    derived from coal utilization and clean coal technologies both
    domestically and internationally. The NMA realizes that budgetary
    constraints have and will continue to make the Clean Coal Technology
    Program vulnerable to funding cuts. Additional budget reductions could
    adversely impact approved projects and significant private sector
    investments. NMA urges the Subcommittee to ensure that the Department
    of Energy continues its program management practice of allowing market
    forces to dictate project terminations if additional cost savings are
    necessary.
        Coal research and development.--In the Advanced Clean Fuels
    Research Program, various advanced coal preparation technologies
    promise to enable the nation to continue the use of coal in traditional
    applications in large industrial and electric utility boilers, as well
    as opening new opportunities for high quality coal use in turbines for
    power generation and for liquid fuels. The cost per barrel of these
    liquid fuels, especially with techniques like coprocessing, has shown
    remarkable improvement. Maintaining an ongoing development effort for
    promising systems is both an insurance policy against the disruption of
    imported oil to the U.S. and a necessary investment in establishing an
    economically viable liquid fuels program.
        In advanced Clean/Efficient Power Systems program, NMA supports
    continued funding for the Advanced Pulverized Coal-Fired Power Plant
    program (the low emission boiler system) which builds on the solid
    performance history of conventional pulverized-coal-fired boilers.
        Within the Advanced Research & Technology Program, the NMA supports
    the goal to develop the advanced turbine system, fuel cells, and the
    critical development of cost-effective hot gas cleanup systems. The
    latter will allow gas from the combustion system to be cleaned without
    lowering temperature and energy level by quenching it prior to clean
    up.
        The cooperative R&D program.--The Cooperative R&D programs with
    industry at the Western Research Institute in Wyoming and the Energy 8
    Environmental Research Center in North Dakota have demonstrated value
    because of their potential for near-term payback through
    commercialization. These cost-shared, private-public partnership
    programs continue to deserve the emphasis placed on them in prior
    years.
        National laboratories.--The Department of Energy should continue
    and expand its emphasis on making maximum use of its existing research
    facilities, including those national laboratories which traditionally
    have not been highly active in fossil energy. In 1990, the National
    Coal Association (now the National Mining Association) took the
    initiative to create a more effective partnership between the coal
    industry and researchers with the National Laboratories at Argonne, Los
    Alamos, Oak Ridge and Sandia, in addition to the Morgantown and
    Pittsburgh Energy Technology Centers. The partnerships' continuing
    mission is to stimulate, facilitate and coordinate the development and
    transfer of technology to the mining industry through technical
    information interaction and applications evaluations.
        Extraction technologies.--Extraction technologies are an essential
    part of a research and development portfolio for coal and minerals. The
    NMA urges support for the establishment of such a program within DOE's
    Office of Fossil Energy in partnership with the mining industry.
        Fossil energy environmental restoration.--The NMA is an active
    partner in the Acid Drainage Technology Initiative (ADTI) at the
    National Mine Lane Reclamation Center (NMLRC) and supports funding in
    the amount of $1.5 million. This action will provide necessary support
    for the NMLRC to implement this joint partnership effort to reduce the
    formation of acid pollutants that can drain into streams and rivers
    when coal is mined.
                       energy information administration
        In addition to its value to the nation, the functions performed by
    the Energy Information Administration (EIA) are of significant
    importance to the mining industry. EIA is an independent agency whose
    unbiased analysis and independent short and long term forecasts form
    the basis for reasoned and responsible policy decisions by the
    Congress, the Department of Energy and other government agencies on
    both the federal and the state levels. EIA's energy data collection and
    dissemination responsibilities are essential to our industry's ability
    to evaluate production and market trends, and to make investment
    decisions which benefit the nation. NMA urges the Subcommittee to
    reject the reductions proposed for the EIA.
                             u.s. geological survey
        Federal investments in geoscience research and information have for
    decades paid enormous dividends, and the rationale for continued
    support of geosciences remains strong. For example, there is a
    demonstrated need for an integrated national effort to provide
    information about natural resources and geologic hazards. The Geologic
    and Groundwater Divisions of the USGS develop and provide high quality
    and scientifically reliable data that is important to maintaining our
    nation's economic and environmental health in addition to national
    security. The U.S. Geological Survey (USGS) addresses development of
    natural resources, prepares geologic maps utilized extensively in both
    the public and private sectors, in addition to maintaining healthy
    water standards.
        Of particular Importance is the maintenance of the data development
    functions transferred from the former Bureau of Mines (BOM). The USGS
    is the only source for much of the statistical information on mining
    and minerals commodities and the NMA strongly advocates the
    continuation of these data collection and dissemination activities.
    While this activity is quite different from other USGS activities, the
    transfer has been effective to date. However, the NMA remains concerned
    that USGS may attempt to eliminate or reduce these important functions.
    The data is very important as it forms the basis for informed policy
    decisions by government and is also used extensively by industry, non-
    governmental organizations and academia.
                            office of surface mining
        The Office of Surface Mining's (OSM) Regulation and Technology
    appropriation should be evaluated in light of the maturation of
    approved state surface mining programs since the passage of the Surface
    Mining Contra and Reclamation Act (SMCRA) in 1977 which has made
    federal duplication of state responsibilities under the Act unnecessary
    and wasteful. In spite of a reduction in appropriations in 1996, OSM
    still maintains 20 field and area offices in addition to the
    Washington, D.C. Headquarters, the Lexington, Kentucky AVS Office and
    three Regional Coordinating Centers that were created pursuant to the
    agency's 1994 Streamlining. That is a total of 25 federal offices for
    26 coal mining states, 24 of which have federally approved state
    programs. In 1995, OSM consolidated the Springfield, Illinois and
    Indianapolis, Indiana field offices with no resulting gaps in
    environmental protection. The necessary functions of field and area
    offices not already assumed by the states can be consolidated with most
    of the functions accomplished by the three Regional Coordinating
    Centers.
        State program grants, technical information processing systems,
    training of state personnel, review of state program amendments and
    electronic permitting activities should continue and can be effectively
    administered through a streamlined structure.
        With respect to Title IV (Abandoned Mine Land) programs, over a $1
    billion balance exists in the Abandoned Mine Land (AML) Fund which is
    financed through the AML tax paid by the industry on each ton of coal
    produced. NMA supports an increase in the amount of money available for
    states and OSM to produce actual On the ground reclamation of lands
    mined prior to the passage of SMCRA.
                  bureau of land management and forest service
        National Mining Association (NMA) members are engaged in extensive
    exploration for and development of minerals on public lands. These
    lands are a cornerstone of the nation's mining industry. The NMA is
    concerned that the Bureau of Land Management (BLM) and Forest Service
    (FS) lack sufficient qualified personnel expertise and funding to
    conduct timely mine permitting. This is resulting in significant
    economic and social impacts.
        NMA's members are committed to environmentally responsible mining
    activity on public lands and are committed to working closely with the
    BLM, Forest Service and the states in the planning stage to assure that
    mining projects meet environmental standards and objectives. To do
    otherwise would lead to increased costs both to industry and the
    Federal government.
        Mining operations on public land generate taxes and employment and
    in many cases are the dominant source of employment in many rural
    communities. Delays in approval for mining plans have a negative effect
    on these communities. An adequate minerals budget will help assure
    timely, up front and cooperative efforts between the land management
    agencies, the states and the mining industry.
        BLM and the Forest Service must have highly qualified and trained
    personnel with expertise in mineral exploration, development and
    production techniques to perform this ``up front'' work. The NMA urges
    the Subcommittee to provide adequate funding so that processing of mine
    operating plans, including National Environmental Policy Act (NEPA)
    compliance, can proceed in a timely manner. This would go far to
    alleviate an ongoing problem of major significance.
        Late last year, the Secretary of the Interior reported to this
    Subcommittee that its directive on processing grandfathered patent
    applications Will also mean that these [mineral] examiners will not be
    available to do other types of work [processing plans of operation]
    typically done by these geologists and mining engineers. Given this and
    other constraints, the industry was surprised by the Secretary's
    announcement early this year of a new major initiative to revise BLM's
    surface management regulations applicable to mining. The allocation of
    staff and financial resources to this major new initiative will further
    exacerbate ongoing delays in the timely processing of plans of
    operation and related NEPA requirements. NMA encourages the
    Subcommittee to scrutinize this new initiative which does not appear to
    be responsive to any specific problems that would warrant wholesale
    revisions of the existing regulatory regime. The prioritization this
    initiative has apparently been assigned must be questioned.
                                     ______

              Prepared Statement of General Electric Power Systems

        This testimony is submitted on behalf of General Electric Power
    Systems (GE) for consideration by the Subcommittee during its
    examination of the funding requested for fiscal year 1998 for programs
    of the Department of Energy. GE supports funding through the Fossil
    Energy Research and Development program for the Advanced Turbine
    Systems (ATS) program in the amount of $45.379 million in fiscal year
    1998. This amount includes $31.379 million as included in the
    Department's budget request, which is necessary to provide funding for
    the completion of the ongoing Phase 3 of the program, plus an
    additional $14 million. This amount above the Department's original
    request is necessary to initiate a restructuring of the utility ATS
    program that was formally requested by the Department on March 3, 1997,
    and will maintain the program at near the level of funding provided in
    fiscal year 1997.
                     value of the ats program to the nation
        Through the ATS program, the Federal government is sharing with
    industry the risks in the development of the next generation power
    system for utility and industrial applications using advanced gas
    turbines. To date, GE has invested $60 million in the utility ATS
    program. The ATS program is essential to keep U.S. turbine
    manufacturers at the forefront of power system technology, enabling
    U.S. companies to increase exports to the rapidly growing world market
    and sustaining and creating new manufacturing jobs.
        The Federal investment in the ATS program will produce market-ready
    technology that will provide the most energy efficient utility power
    generation option for the future. The benefits of this technology that
    will flow to the taxpayers include savings in energy resources; lower
    electricity costs; substantial emissions reductions; and stimulus for
    domestic jobs retention and expansion.
        The ATS program overlaps with the period of growing international
    markets and transition in the domestic industry. Domestic market
    uncertainty resulting from electric industry restructuring makes
    potential investors in new technologies more risk averse, a trend
    likely to continue until the new ground rules for a more competitive
    electricity industry are set. These developments make properly tailored
    Federally supported R&D more critical. Continuing the ATS program will
    produce commercially available technology at the time when new
    increments of generation are needed, both domestically and
    internationally.
                           status of the ats program
        In 1993, GE was one of three companies competitively selected to
    participate in the Conceptual Design and Product Development phase of
    the utility portion of the ATS program. In August 1995, DOE selected GE
    as one of two companies to proceed to the Technology Readiness Testing
    and Pre-Commercial Demonstration phase (Phase 3) of the program, which
    GE is currently cost-sharing at 64 percent of allowable cost. In
    September 1995, GE executed a Cooperative Agreement with the Department
    of Energy. In view of budgetary limitations, last year GE agreed to
    defer certain Federal funding which, under the Cooperative Agreement,
    would otherwise have been required in fiscal year 1997. This change,
    coupled with the funding provided by Congress, has enabled the ATS
    program to maintain progress toward the program's ambitious technical
    goals, with two contractors, in fiscal year 1997.
        Fiscal year 1997 funding is being used by GE to continue Phase 3
    Enabling Technology design and demonstration for the critical new
    components of the ATS. The funding requested by the Administration for
    fiscal year 1998 will permit completion of the GE Phase 3 technology
    development component of the ATS program, which is currently scheduled
    for completion by the end of calendar year 1997.
        On March 3, 1997, DOE issued a Request for Proposals to the ATS
    contractors for a restructured program. Instead of the original
    demonstration phase of the ATS program, which included the siting of
    the first commercial unit at a host site, the program would be
    restructured to achieve full speed no load testing of the ATS,
    including design, procurement and installation of unique tooling and
    test instrumentation. Replacement of the demonstration phase should
    eliminate the need for the Department to choose a single technology,
    thereby ensuring that DOE will not be put in the position of making
    technology choices that should be market-driven, while assuring that
    the program will still achieve the technical milestones necessary to
    ready ATS technology for successful worldwide commercialization. GE's
    current assessment of the impact of this restructuring on the fiscal
    year 1998 funding requirements is reflected in the request for an
    additional $14 million above the Department's original ATS funding
    request.
                      federal support for the ats program
        In assessing any federal technology program, it is critical to (1)
    identify tangible benefits to the taxpayers; (2) assure that the
    technology to be supported is one that ultimately will be supported in
    the marketplace; (3) assure that the U.S. government does not stand in
    the position of picking technology winners or losers or otherwise
    distorting the marketplace, but facilitates the ability of the market
    to make such choices; and (4) assure that the program is consistent
    with and advances other national energy priorities. Where the public
    benefits will far exceed the cost to the government, Federal
    participation is appropriate. Judged against these standards, the ATS
    program is a cost-effective investment for the nation.
                         tangible benefits to taxpayers
        Energy efficiency.--The goal of the ATS program is to achieve fuel-
    to-electricity efficiencies of 60 percent or greater, resulting in
    significant reductions in fuel consumption.
        Lower electricity costs.--These fuel savings will, in turn, lower
    electricity costs. The ATS program has as its goal a 10 percent
    reduction in the cost of electricity produced relative to current (F-
    level) combined cycle power plants. Energy cost reductions of this
    magnitude will have a positive impact on the competitiveness of U.S.
    industries in the world marketplace.
        Emissions reductions.--Environmentally superior natural gas fired
    Advanced Turbine Systems will reduce emissions without the need for
    post-combustion controls. Natural gas fired gas turbines produce no
    particulates, ash, heavy metals, toxins, or sulfur oxides.
    Additionally, the ATS will achieve a significant reduction in emissions
    of oxides of nitrogen, and will further reduce carbon monoxide and
    hydrocarbon emissions relative to the current fossil fueled power
    generation base. The high efficiency of gas turbine systems makes this
    power generation concept the most effective method of reducing carbon
    dioxide emissions from fossil fueled electricity generation.
        Stimulating jobs retention and growth.--Tens of thousands of
    Americans already work to manufacture gas turbines and to provide key
    components. These jobs depend on continued U.S. global leadership in
    turbine technology. The turbine manufacturing industry in the United
    States faces competition from foreign suppliers that are heavily
    supported by their own governments in both technology and market
    development. High value manufacturing jobs in this industry already
    have been lost, and the remaining jobs are at risk because of uncertain
    U.S. market conditions and stiff international competition.
        A $1 trillion international market in electricity generating
    systems is expected to develop over the next decade, and much of the
    market demand will be for advanced gas turbine systems. The ability of
    U.S. companies to capture a significant share of this market may well
    depend upon successful completion of the ATS program to assure that
    U.S. technologies will be developed in time to compete to fulfill the
    expected demand for advanced power generation systems after 2000. Taken
    together, the need to counter foreign R&D support for U.S. competitors
    and foreign export promotion activities, and the jobs and economic
    benefits of expanded U.S. exports of advanced power generation
    products, make a compelling case for the continuation of the ATS
    program.
                    market opportunities for ats technology
        ATS technology ultimately will be supported in the marketplace,
    both domestically and internationally. But because of the continuing
    technical risks, the market alone is not sufficient to bring this
    technology to the point of commercial acceptance. The likely users of
    this technology in the U.S., both utilities and independent power
    producers, are not in a position today to make multi-hundred million
    dollar investments in technologies and systems that are not yet proven
    by actual, full-scale operation.
        The current discussion of deregulation and increasing competition
    in the electricity industry, including the potential for separation of
    generation and other functions of traditional utilities, makes it even
    more difficult to identify risk takers to go forward with new
    technology. While new technology is a driver for restructuring, and gas
    turbine technology advances are one way to secure the cost-saving
    benefits of competition in the domestic industry, the pressures of
    deregulation also may distort the market, and discourage investments in
    newer, cleaner technologies that have unanswered questions. The ATS
    program is vital to clean, efficient power choices in the U.S. because
    it will enable U.S. manufacturers to demonstrate favorable answers to
    these questions about advanced gas turbines.
                federal role in addressing technical challenges
        Because they offer efficient fuel conversion, short installation
    times and lower installed cost, the current generation of gas turbine
    combined cycle systems has gained wide acceptance. In recent years,
    manufacturers have made upgrades in performance and incremental
    improvements that produce modest gains in turbine efficiency and
    emissions reductions. Moving beyond these incremental improvements,
    however, requires vision, commitment and a public-private partnership.
    The ATS program meets these requirements: it has an ambitious but
    attainable goal of a system that achieves 60 percent efficiency; it has
    the commitment, evidenced through cost-sharing, of the private sector,
    and it involves the government in sharing the technical risks that
    prevent private industry, acting alone, from meeting the ultra-high
    efficiency goal of the ATS program.
        The key to the advancement of gas turbine systems in the future is
    a strong technology base focused in three critical areas: advanced gas
    turbine operating conditions, environmental compatibility, and fuel
    flexibility. From a technical standpoint, achieving the efficiency
    goals of ATS requires thermodynamic cycle modification and changes in
    gas turbine design through innovative cooling and materials
    developments. The multidisciplinary approach of the ATS Program fosters
    sharing of information, expertise, and research facilities, which
    enables American companies to address areas of technical risk more
    quickly and effectively.
                  consistency with national energy priorities
        The ATS program will permit greater utilization of domestic natural
    gas resources to meet power generation needs. The more efficiently
    natural gas can be burned to generate electricity, the more competitive
    it will be in the marketplace and the more likely it is that this fuel
    will continue to replace imported oil for electricity generation. This
    enhances U.S. energy security and reduces the outflow of dollars for
    foreign oil. The advanced turbine system will also be fuel flexible. It
    will be applied to coal fired systems (Integrated Gasification Combined
    Cycle) and will result in a significant performance increase and
    emissions reduction compared to conventional coal fired steam plants.
                                   conclusion
        The benefits of the ATS for the United States will far exceed the
    Federal funds invested. The ATS program will contribute to continuing
    U.S. global leadership in advanced power generation technologies,
    thereby supporting high value manufacturing and engineering jobs here
    in the United States, both in the systems developers and in their
    network of suppliers from around the country.
        Government and industry have made mutual commitments to the ATS
    program, and have made significant technical progress. GE appreciates
    the Committee's strong support for the ATS program in the past, and
    urges the Committee to provide the resources necessary to see this
    program through to completion in its restructured form.
                                     ______

    Prepared Statement of Dr. Maxine Savitz, General Manager, AlliedSignal
                               Ceramic Components

        On behalf of AlliedSignal Inc., I am pleased to provide written
    testimony concerning recent ceramic gas turbine activities at
    AlliedSignal. Although AlliedSignal is a large, multi-national advanced
    technology and manufacturing company serving customers worldwide with
    aerospace and automotive products, chemicals, fibers, plastics and
    advanced materials, AlliedSignal Ceramic Components (ASCC), is a 50-
    person unit. AlliedSignal Ceramic Components has a goal to develop and
    manufacture viable high performance structural ceramics for automotive,
    advanced industrial and aerospace applications. Ceramic engine
    components are essential for the application of gas turbine engines as
    effective power sources for ground vehicles in order to meet
    performance, weight and life requirements. The ceramic gas turbine
    programs in the transportation and industrial Energy Efficiency
    programs at the Department of Energy (DOE), which this committee has
    supported, have made much progress in showing the performance and
    reality in a gas turbine environment.
        We are requesting continued funding in fiscal year 1998 for the
    Transportation Propulsion Materials Program at the fiscal year 1997
    appropriated level of $6.5 million instead of the fiscal year 1998
    request of $4.25 million. It is also important to fund the other
    ceramic programs in the transportation and industrial programs at the
    fiscal year 1998 requested level. This includes Vehicle Systems R&D
    (Heat Engines R&D) High Temperature Materials Laboratory, Cogeneration
    (ATS) and Continuous Fiber Ceramic Composites programs.
        The critical activity in the Partnership for a New Generation of
    Vehicles (PNGV) gas turbine effort in fiscal year 1998 is the
    development of ceramic manufacturing technology for gas turbine
    components. The recently released Review of the Research Program of the
    Partnership for a New Generation of Vehicles Third Report by the
    National Research Council (April 1997), states ``The single most
    critical component yet to be demonstrated is a suitably sized,
    efficient, ceramic turbine, capable of being mass produced. The
    committee found that significant progress has been made by Kyocera-
    Vancouver and AlliedSignal Ceramics in making high-quality ceramic
    components with complex shapes and using processes with high potential
    for scale-up to automotive volumes and cost. Extruded regenerator
    rotors, integral turbine rotors, and scrolls have all shown new
    capabilities which, although beset by tooling and startup yield
    problems, have produced quality engine parts and have supported
    successful component durability demonstrations. Previously, precision
    silicon-nitride parts were made by hot isostatic pressing, which is
    impractical for large-volume production. Today, laboratory-scale parts
    can be produced in 10 minutes using a gelcast process, a much better
    time frame than the 8 hours required by the previous procedure.
    However, yield and consistency for this process have yet to be
    established. Some silicon-nitride components have been manufactured
    using this process and have been installed on an experimental basis in
    engines running at metal temperatures (approximately 2,000 +F),
    primarily to improve wear.''
        As a result of collaborative efforts between industry, government,
    and national laboratories--particularly Oak Ridge National Laboratory
    (ORNL)--significant advances in ceramic engine design and silicon
    nitride material and fabrication technologies have been achieved. A
    number of silicon nitride components are being evaluated and actually
    being implemented in gas turbine applications.
        AlliedSignal Ceramic Components is currently in production with
    three silicon nitride aerospace parts: components for air turbine
    starters, auxiliary power unit oil pumps and, just this month, seal
    runners for turbofan main engines. The oil pump parts are used on U.S.
    and foreign commercial aircraft such as the new Boeing 777 and Airbus
    A330/340; the seal runners are being installed on engines which power
    business jets such as Citation, Learjet, Falcon. About 2,000 parts per
    month are now being manufactured. During the three years the gerotor
    rings have been in production, cost to manufacture these parts have
    been reduced 10-fold; yields have increased from 47 percent to 90
    percent. Quality has been excellent. Every Airbus has been retrofitted
    and all Boeing 777s use the ceramic gerotor rings, as will the new
    737s. These and the seals are examples of the achievements of ceramic
    engineers at AlliedSignal Engines who have participated in the DOE
    ceramic ATTAP and Ceramic Engine Demonstration project, and who are
    familiar with the design, test, and advantages of ceramics. As a result
    of knowledge in materials and fabrication experience from the Engine
    Programs and the ORNL Ceramic Technology Programs, AlliedSignal Ceramic
    Components was able to provide these parts in a short time, as an
    example, 20 days. The production decision was made within 4 months
    including rig and engine testing.
        Within the next two years, model 85 APU ceramic turbine nozzles
    will be introduced into existing military ground carts followed by the
    commercial airlines. The nozzle program, funded as an DARPA insertion
    program and by AlliedSignal Engines has completed 46,530 accumulated
    hours and 54,230 starts. There are over 7,500 hours on the high time
    engine. Ten 85 APU's have been fielded on MD-80's and are flying in
    commercial service and have completed 23,690 hours and 38,635 starts
    and four military carts have been fielded. An internally funded program
    between AlliedSignal Engines and AlliedSignal Ceramic Components to
    reduce the costs of manufacturing the 85 APU nozzles, so that the
    military will more easily afford them, has reduced the costs 76
    percent. Ceramic turbine nozzle technology will also see application in
    a new commercial air transport APU. The technology for design, testing
    and ceramic manufacturing for this application is sponsored by DOE. The
    331-200 commercial field test will provide customer confidence and
    demonstrate improved reliability in 767/757 applications. These
    insertion efforts thus provide clear benefit--reliability, durability,
    and customer acceptance.
        Introduction of a new material such as ceramic components in
    aerospace applications provides experience in manufacturing, customer
    confidence, acceptance. As mentioned, costs are being reduced but are
    still too high for most automotive and industrial applications. Gas
    turbines, because of their temperature capability, have the potential
    to achieve fuel efficiency targets while preserving low emission
    characteristics. Ceramics have been identified as a major enabling
    technology and allow the gas turbine to meet the goals of a hybrid
    vehicle or advanced turbine systems for industrial applications. Cost
    of ceramic components is the major impediment to commercialization. At
    present, ceramic components range from ten to several hundred times the
    cost of their metallic counterparts. They currently are far too
    expensive for large scale, high volume use. Engine builders and vehicle
    manufacturers expect ceramic hardware to cost no more than conventional
    materials. This represents a significant challenge to the structural
    ceramic industry. To achieve parity, substantial cost reduction in
    every facet of ceramic component manufacturing is necessary.
        In fiscal year 1994, a multi-year, cost shared program was
    initiated by AlliedSignal Engines as part of the DOE Ceramic Turbine
    Engine Demonstration Project with two ceramic suppliers. The objective
    is to improve manufacturing processes for ceramic turbine engine blades
    and nozzles and demonstrate the application of these processes to a
    production environment. Each supplier has implemented a focused
    strategy to meet annual yield, cost, and delivery goals for
    introduction of ceramic gas turbine components in commercial auxiliary
    power units (APU). Although the blades and nozzles being fabricated
    under this program are for AlliedSignal Engines' evaluation in a
    production environment, the technologies developed are applicable to
    structural ceramics as used in the Solar industrial gas turbine,
    Allison and Teledyne hybrid engine and other hybrid gas turbine power
    plants. The silicon nitride material (AS800) being used by AlliedSignal
    Ceramic Components is being used on all the gas turbine programs.
        The funding AlliedSignal Engines received in fiscal year 1997 will
    enable them to successfully complete the program. Over 2000 cumulative
    hours of 331-200 ceramic nozzle engine testing has been completed with
    over 5335 starts. An additional 750 hours of engine testing is planned
    this year, with FAA certification/approval for field testing planned in
    June 1999. Ceramic blades have completed over 290 hours of successful
    engine tests and will accumulate an additional 700 hours in 1997. The
    complimentary ceramic manufacturing program will obtain process yield
    of 75 percent and show manufacturing capacity of 500 parts per month.
    The basic process and material is the same as for automotive
    components. Forming process is driven by quantity.
        The AlliedSignal Engine program also provides input to the DOE,
    Office of Industrial Technologies Advanced Turbine Systems (ATS)
    ceramic engine program being conducted by the Solar Turbine Co. These
    two programs share non-proprietary technology data. As a result of the
    DOE sponsored manufacturing and scale-up tasks, AlliedSignal Ceramic
    Components is providing silicon nitrate blades for the Solar gas
    turbine. These parts have been successfully tested. AlliedSignal
    Ceramic Components is also providing prototype parts for Allison Engine
    Company for its Hybrid Vehicle Turbine Engine Program and its Advanced
    Turbine Systems Program. In addition, AlliedSignal Ceramic Components
    is participating in a cost-effective Continuous Fiber Ceramic
    Composites (CFCC) program with Caterpillar Inc. All of these programs
    have been planned to provide important steps to meeting the goal of
    engine quality parts. Manufacturing processes suitable for aerospace
    and stationary gas turbine quantities of components are being developed
    as an intermediate stop toward processes suitable for automotive
    quantities of components.
        To serve the needs of PNGV, there must be a transition from low
    volume to high volume products with a further reduction in costs. In
    March 1997, DOE announced its plan to issue a Program Research and
    Development Announcement (PRDA) for development of high efficient
    ceramic gas-turbine hybrid power units (GT-HPU) for hybrid-electric
    automotive applications. Phase I will develop and demonstrate high-
    volume, high-yield, cost effective ceramic manufacturing technology for
    automotive gas turbine components. The funding for the program would
    come from the Automotive Propulsion Systems Material and Heat Engine
    R&D portions of the Office of Transportation Program.
        As mentioned, the proposed fiscal year 1998 budget reduces the
    Automotive Propulsion Systems Material budget form $6.5 million (fiscal
    year 1997) to $4.25 million (fiscal year 1998). The President's budget
    does not provide sufficient funding to develop the manufacturing
    technology for the three critical components: recuperator, combustor,
    and rotor. These three components are very different in design,
    materials, and manufacturing method. The President's budget will allow
    only one contractor and one component. The result will be insufficient
    data to make the go/no-go decision on the turbine option for PNGV.
        If the $2.25 million cut in the ceramic gas turbine program were
    restored, one or more additional contractors would be included in the
    program and all three critical gas turbine components would be
    included. Core supporting technology development programs at Oak Ridge
    National Laboratory would be maintained with the increase in funding.
        The Oak Ridge National Laboratory-led Ceramic Technology Project
    has been a unique partnership between government and industry to
    develop ceramic technology for advanced gas turbine engines. U.S.
    industry is developing manufacturing processes while national
    laboratories and universities are performing supporting technology
    efforts that are synergistic with the industry programs. In many cases,
    very effective teams have been established between ORNL principal
    investigators and industry participants. The ORNL inventor of
    gelcasting is spending a two year assignment at AlliedSignal Ceramic
    Components, helping to scale up and automate the process. The ORNL
    principal investigator for ceramic joining is working with Teledyne
    Ryan to develop a process to join Teledyne's ceramic turbine rotor to a
    metal shaft. ORNL and UDRI have led the nation in developing testing
    technology for high-temperature ceramics, and continues to develop the
    engineering data on commercial ceramics that are required by designers
    of ceramic gas turbine components. This information is critical not
    only for transportation applications but also for Advanced Turbine
    Systems Programs at Solar Turbines, Westinghouse, and Allison-Engine
    Company. ORNL and Boston University have worked with AlliedSignal
    Engines to develop a corrosion-resistant ceramic coating for ceramic
    gas turbine components, and are developing cost-effective methods of
    applying the coating. ORNL and UDRI are working with DuPont-Lanxide
    Composites and Teledyne Ryan on the development of critical ceramic
    recuperator material.
        The $2.25M reduction in the Automotive Propulsion Systems Material
    budget will not only reduce the needed industry effort in ceramic
    manufacturing, but will greatly reduce the supporting technology
    programs at national laboratories and universities as well. The funds
    reduction will result in the loss of six scientists at ORNL, the
    University of Michigan, and the University of Dayton and a 30-50
    percent reduction in gas turbine materials efforts across the board
    including gelcasting, tensile testing, joining and DOE.
        We realize, however, that these are times of reduced government
    spending, so your decisions have become more difficult. In that vein,
    one important point needs to be made--at least from AlliedSignal's
    point of view--that is that we're investigating in the development of
    ceramic components concurrent with the investment we've asked this
    Subcommittee, the Congress and the Department of Energy to make. Over
    the past several years, AlliedSignal has invested over $35 million in
    the development of the technology and manufacturing processes necessary
    to keep pace with the international competition in this area. So, while
    we still ask for a modest level of government funding we, too, continue
    to spend our own resources on ceramics and ceramic production.
        An advanced manufacturing facility was constructed for AlliedSignal
    Ceramic Components in 1992. The 30,000 sq. ft. facility located in
    Torrance, California has state-of-the-art equipment for fabrication and
    characterization of structural ceramics. Additional capital equipment
    is added annually, e.g. our machining capability has doubled in two
    years. Funds are provided, not only for ``real cost shared'' DOE
    contracts, but also for IR&D at AlliedSignal Ceramic Components,
    AlliedSignal Engines, and the ceramic technology skill base team at
    Morristown, New Jersey.
        The continuing partnership between DOE and AlliedSignal ensures
    there will be a competitive ceramic manufacturer and leading edge
    turbine engine technology in the U.S., which will provide more energy
    efficient power sources, both in the United States and abroad.
                                     ______

    Prepared Statement of Jeff Lundy, State of Mississippi Oil & Gas Board
                      and Ground Water Protection Council

        Mr. Chairman, thank you for the opportunity to testify today. My
    name is Jeff Lundy and I am with the State of Mississippi Oil and Gas
    Board. The Oil and Gas Board is responsible for all phases of oil and
    gas production as well as re-injection of produced salt water, which
    assures the safety of our ground water supplies. My testimony today is
    submitted on behalf of the Ground Water Protection Council (GWPC).
        The Ground Water Protection Council (GWPC) is responsible for the
    development and operation of the RBDMS system. The GWPC is made up of
    state oil and gas agencies as well as those that regulate ground water
    and other underground injection control programs. Through the GWPC, the
    states are all working together to protect ground water resources while
    reducing the cost of compliance to industry.
        We would like to thank the Committee for supporting $.5 million for
    the Assistance to State Oil & Gas Agencies and the independent oil tic
    gas industry with Risk Base Data Management Systems (RBDMS) last year
    and would urge the Committee to increase funding for RBDMS to $1.5
    million for fiscal year 1998 to expand the system to every oil and gas
    producing state. The system is currently operational in Alaska,
    Montana, Nebraska, Mississippi, North Dakota, and we are installing it
    in Ohio, Alabama and California. Additional funding would allow each
    remaining state to initiate the program as well. This amount would
    provide the smaller independent oil producers access to this
    environmental data management system. Smaller producers are often the
    most in need of such a system because high regulatory costs hit them
    the hardest. In addition to providing the system to smaller producers,
    additional funding will allow the GWPC to expand the system to include
    oil field surface facilities including tanks, pipelines, and storage
    units. Before I go into detail on the how RBDMS works, I want to make
    the point that states are dedicating their own resources to RBDMS. For
    example Ohio, is using almost $600,000 in state dollars to implement
    RBDMS. I know all other states are planning on using state dollars as
    well as federal funds. But what the remaining states need is a
    relatively small amount of start-up assistance after which time they
    have shown they are willing to begin applying their own resources.
        With past assistance from the US Department of Energy, the GWPC
    assembled a project team with extensive knowledge and experience in
    state oil and gas agency environmental data management to develop
    RBDMS, the only comprehensive, fully relational, PC-based oil & gas
    regulatory data management system in the country. By allowing the oil
    and gas industry to participate in the next phase of development of the
    system, we will assure that it will be useful and effective for them.
    Additional funding at $1.5 million for fiscal year 1998 will be
    mutually beneficial to the private sector and the states by keeping
    environmental compliance costs down.
        RBDMS is one of the best examples we have seen of how industry,
    working with government, can improve both industry production and
    environmental protection at the same time. Included with my testimony
    are endorsement letters of RBDMS as an alternative to costly command
    and control regulatory policies. It is supported by both the regulated
    community and the regulators themselves.
        In summary, the increased funding we are requesting will provide a
    means for the successful expansion of the Risk Based Data Management
    System and will provide the following benefits: (1) improve
    environmental protection, (2) less regulatory and compliance costs for
    producers, (3) better state enforcement of environmental regulations,
    and (4) continued oil production. The remainder of my testimony
    provides a more detailed explanation of how we have used prior funds
    and how we would use the requested increase. Due to its length, I will
    submit it for the written record. Thank you for the opportunity to
    appear before you today.
                                     ______

                   Risk Based Data Management System [RBDMS]

                  benefits of rbdms to the oil & gas industry
    Enhance protection of the nation's ground water
        The RBDMS will provide regulators with information that can be used
    to focus attention and resources, both governmental and industry, on
    those wells that pose the greatest environmental risks. The ability to
    target human and financial resources towards those areas with the
    greatest aisle will result in a more effective and efficient use of
    those resources and a greater level of environmental Protection. In
    addition to the tangible public benefits from enhanced protection of
    the Nation's ground water, the resulting decrease in incidents of
    pollution will also help protect industry's image.
    Improve industry access to oil and gas commission data
        Oil & Gas boards and commissions function as a clearinghouse for
    information on wells, geology and production. Exploration geologists,
    producers, and other players utilize this information on a daily basis
    to develop prospects and to more efficiently drill and operate their
    leases. In many oil and gas commissions, the vast majority of well data
    is only available via laborious searches through voluminous paper well
    files. In addition to estimating environmental risk the RBDMS is a
    comprehensive data management system that will answer most oil and gas
    information requests quickly and easily from a computer terminal. More
    readily available data on active, idle, and past P&A'd wells will
    decrease the cost of new discoveries and facilitate the development of
    enhanced recovery projects.
    Reduced cost to industry of oil & gas commission operations
        Many state oil & gas boards and commissions operate without the
    benefit of well designed computer systems. As a result, many operations
    that could be automated are performed manually at a much greater cost.
    The RBDMS is an efficient and comprehensive data management system
    designed specifically to meet the needs of state oil & gas commissions.
    It will make existing oil & gas commission personnel more efficient and
    reduce the cost of oil & gas commission operations. The oil and gas
    industry will directly benefit from any cost savings as most oil & gas
    commissions are cash funded with a production-based conservation tax
    paid by operators and producers. Furthermore, the fact that the RBDMS
    will be utilized by multiple oil & gas commissions will save each
    commission the expense of developing its own system.
    Decrease time required to process applications
        An on-line database of oil & gas commission data will decrease the
    amount of time commission staff require to research and process
    Applications for Permission to Drill and other applications involving
    re-entry and re-completion. Furthermore, the ability to evaluate
    environmental risk will result in construction and testing requirements
    commensurate with the level of risk.
    Facilitate uniform reporting requirements among states
        Operators that work in more than one state are often frustrated by
    the variety of applications and reporting forms used by different
    states. The RBDMS was designed for use in multiple states and during
    the design of the system all participants shared the goal of developing
    a common database, program screens, and reports that would work for all
    participating states. Implementation of the RBDMS in multiple state oil
    & gas commissions will further progress towards the goal of uniform
    application and reporting requirements among states. This will decrease
    costs to operators with wells in multiple states.
    Preserve shut-in and idle wells
        Many oil wells are inactive as they cannot economically produce at
    prices that prevail in today's market. Such wells may pose potential
    threats to USDW's, and pressure exists to plus inactive wells before
    they pollute and/or become orphans. While the future for increased oil
    prices is not bright, such wells may have value as possible candidates
    for enhanced oil recovery projects. The Department of Energy is
    currently sponsoring research into cost-effective enhanced oil recovery
    technology; but such technology will only be viable if wellbores exist
    where the new technology can be applied.
        Some inactive wells do pose a threat to USDW's and should be
    plugged, and the RBDMS will assist in pointing out such wells; but the
    system will also assist in objectively evaluating inactive wells that
    pose a relatively low risk of endangering USDW's. Such analysis will
    minimize errors of omission and commission: not plugging wells that
    should be plugged, and plugging wells that should not.
        The RBDMS will maintain an on-line list of all inactive wells
    together with historical Mechanical Integrity Tests, Static Fluid Level
    Tests, and Idle Well Reports. Computer programs will ensure that
    required tests are run and reports received. Inactive wells will not
    become lost and forgotten in a mass of paper files. Such a system will
    improve public confidence in the regulatory process and reduce pressure
    to plug inactive wells with future value.
                                     ______

     Prepared Statement of Michael P. Kenny, Executive Officer, California
    Air Resources Board; Robert J. Cabral, Supervisor, San Joaquin County,
    Chairman of the Board, San Joaquin Valley Unified Air Pollution Control
       District; Manuel Cunha, Jr., President, Nisei Farmers League; Les
      Clark, Vice President, Independent Oil Producers' Association; and
      Catherine H. Reheis, Managing Coordinator, Western States Petroleum
        Association on Behalf of the California Industry and Government
                           Coalition on PM-10/PM-2.5

        Mr. Chairman and Members of the Subcommittee: On behalf of the
    California Industry and Government Coalition on PM-10/PM-2.5, we are
    pleased to submit this statement for the record in support of our
    fiscal year 1998 funding request of $900,000 for the California
    Regional PM-10/PM-2.5 Air Quality Study.
        The San Joaquin Valley of California and surrounding regions exceed
    both state and federal clean air standards for small particulate
    matter, designated PM-10/PM-2.5. The 1990 federal Clean Air Act
    Amendments require these areas to attain federal PM-10/PM-2.5 standards
    by December 31, 2001. If the proposed PM-2.5 standards are adopted,
    they would have to be attained 2-3 years later. Attainment of these
    standards requires effective and equitable distribution of pollution
    controls that cannot be determined without a major study of this issue.
        According to EPA and the California Air Resources Board, existing
    research data show that air quality caused by the PM-10/PM-2.5 problem
    has the potential to threaten the health of more than 3 million people
    living in the region, reduce visibility, and impact negatively on the
    quality of life. Unless the causes, effects and problems associated
    with PM-10/PM-2.5 are better addressed and understood, many industries
    will suffer due to production and transportation problems, diminishing
    natural resources, and increasing costs of fighting a problem that begs
    for a soundly researched solution.
        PM-10/PM-2.5 problems stem from a variety of industry and other
    sources, and they are a significant problem in the areas that are
    characteristic of much of California. Typical PM-10/PM-2.5 sources are
    dust stirred up by vehicles on unpaved roads, and dirt loosened and
    carried by wind during cultivation of agricultural land. Soil erosion
    through wind and other agents also leads to aggravation of PM-10/PM-2.5
    air pollution problems.
        Several aspects of the research are important to federal agencies
    and programs within the purview of the subcommittee's jurisdiction,
    including the Forest Service, the Park Service, the Bureau of Land
    Management, and Department of Energy fossil fuel programs. Based on
    consultation with federal agency officials who work closely with the
    PM-10/PM-2.5 issue in the San Joaquin Valley Region, the Coalition
    requests funding for the following agencies and programs:
        Forest Service ($250,000).--PM-10/PM-2.5 is a highly important
    issue with the Forest Service's Region V, especially with respect to
    the Watershed, Soil and Air Department. Unpaved roads within the Forest
    Service's jurisdiction are a suspected, yet unproven, source of PM-10/
    PM-2.5 pollution. These roads include public, private and industry-use
    right-aways, such as those used for fire prevention and logging.
    Consequently, the Forest Service has a substantial stake in the PM-10/
    PM-2.5 issue and in research into its causes and remedies.
        Park Service ($100,000) and Bureau of Land Management ($250,000)
    for a total of ($350,000).--The U.S. Park Service and the Bureau of
    Land Management have a similarly substantial stake in the PM-10/PM-2.5
    issue. Park Service officials in the California region are concerned
    about the sources and types of PM-10/PM-2.5 particulate matter,
    including secondary emissions, that are coming into park areas from the
    San Joaquin Valley. There is a need for an assessment of the effect of
    PM-10/PM-2.5 emissions on different elevations of terrain. The Park
    Service is concerned about the transport of Valley emissions into
    outside areas under Park Service jurisdiction, especially as these
    emissions have an effect on vegetation and visibility in park areas.
    Park Service and BLM officials are concerned about the possible
    contribution of prescribed and forest fires on the PM-10/PM-2.5
    problem, as well as the effect of PM-10/PM-2.5 particulate matter on
    human and other animal life, vegetation, land management, and area
    lakes and streams.
        Department of Energy ($300,000).--The Department of Energy's stake
    in the PM-10/PM-2.5 issue falls into at least three categories. First,
    the oil and gas industry is vitally concerned about PM-10/PM-2.5, and
    is a key player in the coalition to address PM-10/PM-2.5 problems and
    the need for this research. Secondly, there are DOE laboratories with
    modeling capabilities that may be able to contribute to research and
    solutions concerning PM-10/PM-2.5. Finally, because of DOE's
    partnership in the Elk Hills gas production facility, DOE is in a
    critical position as a potential contributor to both the problem and
    the solution.
        Improved information on the sources and composition of construction
    emissions is needed to develop accurate PM-10/PM-2.5 emission
    inventories. This study will provide information to better evaluate and
    understand the impacts of construction project emissions to total PM-
    10/PM-2.5 loadings in a region. Knowledge of the sources of
    construction emissions will also provide better information for
    evaluating the effectiveness of potential mitigation measures thereby
    minimizing the risk of implementing potentially costly control measures
    which might not be effective.
        The importance of this study on PM-10/PM-2.5 is underscored by the
    need for more information on how the federal Clean Air Act Amendments
    standards can be met effectively by the business community, as well as
    by agencies of federal, state and local government whose activities
    contribute to the problem, and who are subject to the requirements of
    Title V of the Clean Air Act. There is a void in our current
    understanding of the amount and impact each source of PM-10/PM-2.5
    actually contributes to the overall problem. Without a better
    understanding and more information--which this study would provide--
    industry and government will be unable to develop an effective
    attainment plain and control measures.
        Our Coalition is working diligently to be a part of the effort to
    solve this major problem, but to do so, we need federal assistance to
    support research and efforts to deal effectively with what is
    essentially an unfunded federal mandate.
        Numerous industries, in concert with the State of California and
    local governmental entities, are attempting to do our part, and we come
    to the appropriations process to request assistance in obtaining a fair
    federal share of financial support for this important research effort.
    In 1990, our Coalition joined forces to undertake a study essential to
    the development of an effective attainment plan and effective control
    measures for the San Joaquin Valley of California. This unique
    cooperative partnership involving federal, state and local government,
    as well as private industry, has raised more than $12 million to date
    to fund research and planning for a comprehensive PM-10/PM-2.5 air
    quality study. Our cooperative effort on this issue continues, and our
    hope is that private industry, federal, state and local governments
    will be able to raise an additional $12 million over the next three
    years to fund this important study.
        To date, this study project has benefited from federal funding
    provided through USDA's, DOD's and EPA's budgets--a total of $8.8
    million in federal funding. State and industry funding has matched this
    amount virtually dollar for dollar. However, notoriously absent as
    funding sources are the key Department of Interior agencies and
    programs previously discussed. As a prime stakeholder in this issue,
    the Department of Interior should do its fair share, and bear part of
    the cost of this vital research.
        The following is a list of PM-10/PM-2.5 research projects which are
    in progress:
    Planning
        Development of products for emissions, field monitoring, data
    analysis and modeling.
    Technical support studies
        Suitability of data base; Winter/Autumn intensive study;
    micrometeorological parameters; fog formation/dissipation; ammonia from
    soils.
    Modeling
        Demonstration of modeling system for application in SIP's.
    Data analysis
        Analysis of existing data to aid project planning.
    Demonstration studies
        Almond, fig, walnut, cotton, harvesting; unpaved agricultural
    roads; unpaved public roads; unpaved shoulders of paved roads; dairies,
    feedlots, poultry, dry cereal grain.
        For fiscal year 1998, our Coalition is seeking $900,000 in federal
    funding to support the continuation of this vital study by the Forest
    Service ($250,000), the Park Service ($100,000), the Bureau of Land
    Management ($250,000), and the Department of Energy ($300,000) in
    California. We respectfully request that the Appropriations
    Subcommittee on Interior and Related Agencies provide these funds in
    the appropriation bill for fiscal year 1998, and that report language
    be included directing the full amount for California.
        The California Regional PM-10/PM-2.5 study will not only provide
    vital information for a region identified as having particularly acute
    PM-10/PM-2.5 problems, it will also serve as a model for other regions
    of the country that are experiencing similar problems. The results of
    this study will provide improved methods and tools for air quality
    monitoring, emission estimations, and effective control strategies
    nationwide. Consequently, the beneficial results of this study will
    contribute to national policy concerns as well.
        The Coalition appreciates the Subcommittee's consideration of this
    request for a fiscal year 1998 appropriation of $900,000 to support the
    California Regional PM-10/PM-2.5 Air Quality Study.
                                     ______

     Prepared Statement of Hon. Sharpe James, Mayor, on Behalf of the City
                                 of Newark, NJ

        Newark, New Jersey is a city of great contrasts and great promise.
    Our City is home to one of the fastest growing and convenient
    international airports in the nation, which is easily accessible to an
    unparalleled network of sea, rail and highway connections. Newark is
    also home to five institutions of higher learning, ranging from a fine
    community college to two law schools and a medical school. The park
    system of the city is another important component of Newark's value as
    a commercial, educational, and cultural hub of northern New Jersey.
        Weequahic Park is a 311-acre facility located in a densely
    populated mostly low/moderate income area of Newark, NJ, the Nation's
    third oldest city. The major areas of the park are: (1) several playing
    fields; (2) a 72-acre lake; (3) playgrounds; (4) tennis courts; (5)
    picnic area; (6) paddleball/handball courts; (7) trails; (8) a wide
    variety of open space; and (9) an 18-hole golf course, one of the few
    urban golf courses in the nation. Weequahic Park was designed by
    Frederick Law Olmstead in the 1850's and is the second largest park in
    the Essex County Park System, the oldest park system in the United
    States.
        The park is within Newark's boundaries and borders on Frelinghuysen
    Avenue which takes its name from the long distinguished New Jersey
    family of Congressman Rodney P. Frelinghuysen. Further, the cities of
    Newark and Elizabeth boundary lines were established within Weequahic
    Park, then Waverly Fair Grounds, in 1668, two years after Newark became
    a city.
        Over the past two decades or more, Essex County, the owner of the
    park, substantially reduced its maintenance support, and as a result,
    every aspect of this once-splendid park fell into substantial
    disrepair. The once beautiful system of trails became overgrown
    creating a haven for criminal activity, and the park's lake, which in
    the past provided recreational boating and fishing, became choked with
    algae.
        In 1992, a group of park users came together to form Weequahic Park
    Association, Inc. (WPA), which is modeled after and received a generous
    amount of support from the highly successful Central Park Conservancy
    in New York City. The community-based people working effectively with
    the management team, has been the key to WPA's success to-date, i.e.
    grass roots people do grass roots work, and professionals do the
    professional work. In order to supplement the resources provided by
    Essex County for use in Weequahic Park, and to play a hands-on
    management role, WPA formally entered into a partnership agreement with
    the county in 1995.
        Also, WPA participated in the city of Newark's last Empowerment
    Zone application submission, as one of eight (8) ``area coordinators.''
        Following are some of the key accomplishments of WPA since 1992. It
    should be noted that these accomplishments were made without an
    administrative budget. Our estimate of the investment made in Weequahic
    Park associated with WPA's accomplishments (including ``sweat-equity''
    and ``in-kind contributions'') is in excess of $5 million and growing.
        WPA's Accomplishments: Developed organizational structure;
    articulated key goals and objectives; recruited management team;
    incorporated and secured federal tax-exemption; negotiated partnership
    agreement with Essex County; planned and managed two Labor Day weekend
    festivals; functioned as Empowerment Zone ``Area Coordinator'';
    conducted general park management planning; conducted park clean-up
    projects; collaborated with international, national, and local private
    entities to partner with WPA on specific park projects; developed
    Foundation Board; developed proposal to do a masterplan study;
    requested and received proposals from architects/engineers for
    participation in the masterplan study; new roadways throughout the
    park; two state-of-the-art playgrounds; restoration of fieldhouse/
    visitors' center; convened WPA meetings in various properties
    surrounding the park; caused lake to be treated and stocked with fish;
    submitted several projects (with budgets) to the county for funding; 30
    new park ``awareness signs'' are being installed; eight WPA members
    scheduled for summer employment; and major foundation to undertake
    entranceway beautification project.
        WPA strongly feels, and we concur, that they are at the point of
    reaching ``critical mass'' in their development. The president of WPA,
    Wilbur J. McNeil, has made such a positive impression on the county of
    Essex that they have appointed him to a county committee to make
    recreational policy.
        The most immediate WPA projects are to: (1) continue showing
    physical improvement within and outside the park and thereby attract
    and involve more indigenous community participation; (2) continue to
    build the management team; (3) attract more local institutions (e. g.
    local school district, hospitals, churches, etc.) to have their
    constituents to use the park consistent with their goals and
    objectives; (4) raise funds and undertake the masterplan study; (5)
    raise funds to implement the masterplan study thereby upgrading the
    quality of open space with both passive and active recreational
    opportunities within Newark; (6) provide employment and economic
    opportunities within and around the park for members of the community;
    and (7) reduce crime.
        An appropriation of $3.5 million is hereby requested to accomplish
    a broad range of initiatives, including the completion of the
    masterplan, park maintenance above the level currently provided by
    Essex County, the upgrading of the lake in order to return it to a
    state usable for boating and fishing and the restoration of trails,
    landscaping and horticultural features. The masterplan will include a
    fundraising component, to involve the private sector and foundations in
    the continued restoration of this historic and invaluable urban asset.
                                     ______

       Prepared Statement of the City of Gainesville, FL, Regarding the
              Sweetwater Branch/Paynes Prairie Stormwater Project

        Mr. Chairman: On behalf of the City of Gainesville, Florida I
    appreciate the opportunity to present this written testimony to you
    today. The City of Gainesville is seeking federal funds in the fiscal
    year 1998 Interior Appropriations bill, in order to assist our efforts
    to protect the Floridian aquifer from stormwater runoff. In particular,
    we are hopeful that the Subcommittee will provide the City with $2
    million to implement an engineering study.
        In Gainesville, the Sweetwater Branch basin contains approximately
    1,710 acres and is located in the southeast central portion of the
    City. The outfall from this basin discharges into Paynes Prairie, a
    state owned preserve and park system, which eventually flows into the
    Alachua Sinka, natural sink hole that drains directly into the
    Floridian Aquifer. This Aquifer provides the majority of drinking water
    to Florida's a residents and has a direct impact on Florida Everglades.
        The Sweetwater Branch drainage basin contains urban, commercial,
    industrial, and residential area stormwater runoff. Because the branch
    runs through some of the oldest portions of Gainesville, most
    stormwater runoff is directly discharged into the Branch with very
    little flooding attenuation or pollution loading reduction. The runoff
    has the potential to affect threatened and endangered wildlife such as
    the Bald Eagle, the Woodstork, the Florida Sandhill Crane, and the
    Southeastern American Kestrel. In addition, many domestic water wells
    are used to obtain water from surficial and intermediate aquifers in
    the area. In summary, the situation has created a concern amongst
    environmentalists, business leaders, and concerned citizens throughout
    the region that Paynes Prairie and the Florida aquifer are being
    compromised.
        With this in mind, the City of Gainesville, Alachua County, St.
    Johns River Water Management District, Florida Department of
    Environmental Protection and local citizens are all seeking a
    comprehensive ecosystem management solution to the problem of
    stormwater runoff from downtown entering Sweetwater Branch, Paynes
    Prairie, and the Alachua Sink. The project devised by these groups
    would reduce or eliminate the sediment, debris, nutrients and general
    pollutants currently being discharged. Current projections are that the
    project would consist of the following three components: The purchase
    of undeveloped property in the vicinity of State Road 331 and
    Sweetwater Branch; the construction of maintainable sediment and debris
    removal systems; and the construction of maintainable nutrient removal
    systems.
        An in-depth engineering analysis of the creek system, property
    topography, associated wetlands, and other pertinent factors is needed
    to determine the optimum and appropriate scope of property purchase and
    facilities construction. The City is prepared to pay some of the cost
    for this analysis, but we are simply unable to bear the entire burden.
    As a result, we request that the Subcommittee appropriate $2 million to
    assist our efforts. Once the project construction is complete,
    Gainesville Stormwater Management Utility, a public utility, would
    provide the required annual maintenance for the facility and no federal
    maintenance funds would be needed.
        This is a critical and much needed project for the City of
    Gainesville, as well as the entire State of Florida, and we
    respectfully ask the Subcommittee for its consideration of the
    Sweetwater Branch/Paynes Prairie Stormwater Project.
                                     ______

     Prepared Statement of Karen Werbelow, Executive Director, Foundation
                         for North American Wild Sheep

        Mr. Chairman and members of the Subcommittee, please accept the
    following testimony for the Forest Service and Bureau of Land
    Management proposed fiscal year 1998 Budgets from The Foundation for
    North American Wild Sheep.
        The Foundation for North American Wild Sheep, is a non-profit
    conservation organization with 7,000 members nationwide. We are deeply
    concerned by the current trend to reduce budgets for the Forest Service
    and the Bureau of Land Management, specifically for fish and wildlife
    management including cost share programs. Since fiscal year 1993, we
    have witnessed the steady decline of wildlife habitat management
    budgets. We respectfully ask for your attention to the details of these
    important matters of wildlife conservation.
                        the challenge cost share program
        The Challenge Cost Share Program provides opportunities for
    wildlife management and research in conjunction with the Forest
    Service, the Foundation for North American Wild Sheep and other
    conservation organizations. The success of these partnerships have
    allowed additional funding for Forest Service. Frequently, state
    wildlife agencies will also participate. Specific projects in which we
    are asked to cooperate, include and are not limited to, disease
    research and habitat management. The fragile balance between wildlife
    and multiple use challenges require constant monitoring by wildlife
    professionals. For the past three years, the Forest Service budget
    along with key personnel needed by the conservation community and vital
    to our partnership programs have slowly been reduced. The staff
    biologists, technical assistants and field personnel employed by the
    Forest Service are the driving force behind this program. Since fiscal
    year 1993, the fish and wildlife management programs have been
    jeopardized by funding cuts. Qualified field biologist and other staff
    have slowly been phased out. Without these personnel, many current and
    future projects are being eliminated. New partnership programs will
    eventually be non-existent. Consequently, wild sheep and other native
    wildlife in the United States are being severely affected.
        We support an increase in budget funds for the Challenge Cost Share
    Program. This would allow projects such as ``Movements and Habitat Use
    of Bighorn Sheep Along the upper Yellowstone River Valley'' to
    continue. The three year study, funded by the Challenge Cost Share
    Program, provided invaluable information about bighorn sheep survival.
    This information will be used to design and implement successful
    management programs throughout Montana. The benefits to all wildlife
    would be realized by the simple increase of wildlife biologists and the
    seasonal personnel employed. This will allow for the continuation of
    baseline data collection, necessary for overall ecosystem health and
    management, and the implementation of programs such as prescribed burns
    and the monitoring of wildlife and its habitat. An increase in the
    Challenge Cost Share program would encourage problem solving by
    addressing the needs of wildlife and habitat before a species faces
    endangerment. Sound scientific management depends on a professional
    workforce suited to meet the needs of the wildlife and current public
    demands.
                                 land resources
        Proper rangeland management is vital to the health of all species,
    wild or domestic. The Foundation for North American Wild Sheep supports
    the $2.8 million increase to the Bureau of Land Management,
    specifically for management of Wild Horses and Burros. Achieving a
    balanced management level of wild horses and burros is critical to the
    desert bighorn sheep. The previously inadequate budget for the
    Strategic Management of wild horses and burros has caused degeneration
    of rangeland habitat crucial for the survival of the desert bighorn
    sheep, and other native wildlife populations.
        In conclusion, we ask you to strongly consider the benefits of
    increased fish and wildlife budgets to the American people. Wildlife
    biologist are just discovering the how's and why's of ecosystems.
    Research of established healthy populations of wildlife is as important
    as the research of the diseased populations. Maintaining the health and
    vitality of wildlife populations ensures future generations the
    opportunity to enjoy the heritage of America's great outdoors.
                                     ______

     Letter From R. Dean Tice, Executive Director, National Recreation and
                                Park Association
                                         Arlington, VA, April 15, 1997.
    Hon. Slade Gorton,
    Chairman, Subcommittee on Interior and Related Agencies, Committee on
            Appropriations, U.S. Senate, Washington DC.
        Dear Senator Gorton: This letter urges the Subcommittee to begin
    the restoration of public partnerships by appropriating funds for Land
    and Water Conservation Fund state assistance and the Urban Park and
    Recreation Recovery Program. Consistent with the early history of the
    program, LWCF state assistance should approach one-half of total LWCF
    appropriations for fiscal year 1998.
        We also urge the Subcommittee to give fullest consideration to
    appropriations for the Federal Lands-to-Parks program. This program
    provides technical and planning assistance to state and local
    governments to obtain surplus federal lands for park and recreation
    purposes. Since fiscal year 1996, the program has emphasized assistance
    to those communities impacted by legislated military base closures.
    Nearly 15,000 acres of base closure land have been identified by local
    interests as key acquisition areas for recreation and conservation
    purposes. The continuing potential of this program to contribute to the
    public recreation estate without the need for continued federal
    investment or funds merits your support.
        Previous appropriations for LWCF assistance grants and urban parks
    have resulted in a national legacy. The LWCF authority, for example,
    has provided over $3.2 billion to the 50 states, the District of
    Columbia, Puerto Rico, Guam, the Virgin Islands, American Samoa, and
    the Northern Marianas for planning, acquisition and development of
    recreation opportunities in the United States. Through fiscal year
    1996, a total of 37,300 projects were approved to support acquisition
    of park and recreation resources or development of recreation
    facilities. They are in every geographic region of the U. S., in every
    county and almost all localities. Federal obligations have been matched
    by state and local contributions for a total LWCF grant investment of
    $6.5 billion. States have received about 8,300 grants and counties some
    4,900, while cities, towns and other local agencies matched more than
    24,000 grant awards.
        Of the total number of grant projects, about 10,000 have helped
    states and localities conserve 2.3 million acres of land, including
    combination projects where donated land values matched the cost of
    development. Almost 27,000 projects have been for the development of
    recreation facilities. Seventy-five percent of the total funds
    obligated have gone to locally sponsored projects that provide close-
    to-home recreation opportunities readily accessible to America's youth,
    adults, senior citizens and the physically or mentally challenged. In
    addition to thousands of smaller recreation areas, grants have helped
    acquire and develop new areas of statewide or national significance
    such as the Allagash Wilderness Waterway (Maine), Liberty State Park
    (New Jersey), the Willamette Greenway (Oregon), Platte River Park
    (Denver), Herman Brown Park (Houston), and Illinois Beach State Park
    (Chicago).
        Beyond the numbers of projects, acres and dollars, it is important
    to note the LWCF grant program's major effects on the country's overall
    attitudes and policies toward conservation and recreation. Most of
    these less tangible benefits have come about as the result of the
    partnership with states and localities. This type of influence
    continues to the present and the states and local governments have
    shown and continue to show great initiative LWCF has helped to catalyze
    many of these efforts and it can and should continue to do so.
        A further legacy--and a major force for long-term protection of all
    recreation resources--is the provision of Section 6(f)(3) of the Act
    that requires all property acquired or developed with LWCF assistance
    to be maintained perpetually in public recreation use. Consistent
    enforcement has developed strong stewardship programs in each of the
    states to help ensure that LWCF's contributions to the national
    recreation estate remain real and accessible to our citizens.
        The job must continue as population increases and land once
    available for recreation is committed to other uses. Our 1995 research
    indicated that local park and recreation agencies require a national
    total of $27.7 billion in capital investment for rehabilitation, land
    acquisition and new construction. Localities expect to have less than
    half that sum available. While the total estimated need is down from
    $30.4 billion projected from a previous five-year survey, the expected
    budget shortfalls increased by seven percent. Therefore, it is possible
    that the lower total for 1995-99 reflects reduced expectations as well
    as, or instead of, a real decline in needs.
        Construction of new recreation infrastructure ranked highest, with
    a total need of $13.6 billion (49.9 percent) nationwide. For those
    agencies expressing such new construction needs (87 percent), the
    average need per agency was over $3 million, down from $3.5 million for
    the previous five-year period.
        Rehabilitation and restoration needs nationwide totaled $8.8
    billion (32.3 percent). It is important to note that these needs are
    not for ``maintenance'' but reflect major costs for capital renovation
    to correct deficiencies due to age or inadequate design and to increase
    user capacity of existing functional facilities. For those agencies
    expressing a need for rehabilitation investments (76 percent), the
    average need per agency was just under $2.2 million, up from $1.8
    million in the previous survey.
        Land acquisition needs, through both fee simple purchase and less
    than fee approaches, totaled almost $5 billion (17.9 percent). For
    those agencies expressing the need for capital investment in land
    acquisition (52 percent), the average cost per agency was $2.4 million,
    up from the $1.8 million estimated previously. The average number of
    new acres needed rose from 167 to 214. Local governments anticipate (or
    hope) that six percent of their capital needs (almost $1.8 billion)
    would come from federal sources, including but not limited to LWCF.
        Ultimately, the Land and Water Conservation Fund is only in part
    about land and water. It is about what we are willing to invest in
    ourselves and our posterity. The United States contains the wealthiest
    society in the history of the world. Yet we are a nation at risk. We
    have the greatest gap between rich and poor of any modern nation, and
    that gap is still increasing.
        The U.S. currently spends proportionately more for health care--14
    percent of GNP--than any other nation. We are a sedentary nation.
    According to a recent report by the Surgeon General, one fourth of all
    Americans perform almost no physical activity. Nearly half of our youth
    aged 12-21 years are inactive on a regular basis. And only 19 percent
    of our high school students are active for more than 20 minutes five
    days a week--down from 37 percent in 1990. Our population's
    ``limitation of activity'' index--a measure of long-term disability--
    increased by 45 percent between 1957 and 1989.
        The nation grows in population at an increasing pace. From 1964 to
    1994, we increased from 191 million to 270 million people. As our
    population increases, so has competition for America's natural
    resources, the most important of which is undeveloped land. We are
    losing more and more of our special places to urban and suburban uses
    or to resource extraction. We are depleting irreplaceable biological
    resources--some 3,900 plant and animal species are either threatened
    with extinction or endangered.
        Some argue persuasively that we are witnessing a decline in the
    moral fabric of our society. Violence, crime and gang membership are on
    the rise, especially among the nation's youth. Families, once highly
    influential in determining our direction and values, are often replaced
    by gangs, or if we are lucky, by social workers, teachers and other
    mentors. As communities continue to search for solutions to violence,
    the costs of dealing with crime are draining our public resources. We
    spend on average about $30,000 a year to incarcerate a single juvenile
    offender. The monetary value of saving an at-risk youth has been
    estimated at $1.5 to $2.0 million over his or her lifetime, but note
    that these are reductions in negative costs and do not include the
    ``saved'' person's positive contributions to the economy and society.
        These pressing problems have a common link, documented in a wealth
    of research on the economy, human behavior, health and natural
    resources. Over 50 percent of the factors which determine our state of
    health have to do with our environment, our relationships with others,
    our status in the community and how we think about ourselves. Park and
    recreation resources and services help to supply these critical social
    benefits by offering opportunities for most citizens to engage in
    active recreation and to experience healthy relationships with others,
    ourselves and our natural surroundings.
        How much are we willing to invest in essential public recreation
    systems? The Act promises revenues generated by Outer Continental Shelf
    (OCS) resources for the purposes of land and water conservation. A
    serious reevaluation of the continuing diversion of most of those
    revenues for other purposes is needed. We share the view of many in
    Congress that the heavy burdens of national public debt must be
    addressed, and that resource-based income can help diminish budgetary
    shortfalls. We believe, however, that the vision of 1964 is equally
    valid--that present and future generations will also be burdened by the
    failure of today's leaders to invest prudently in capital park and
    recreation resources while we still have viable options to do so.
        Projected fiscal year 1998 OCS revenues are $2.254 billion,
    according to the Minerals Management Service. The LWCF act provides
    that a portion of such annual revenues--for 1998 perhaps $850 million
    of the $900 million authorized by the act--or about 39.9 percent of
    estimated receipts credited to the Fund be available, subject to
    appropriation. The President's proposed budget requests only $160
    million--less than 19 percent of the authorized level and about 7.5
    percent of total estimated receipts. If that budget is enacted, more
    than 92 percent of all OCS revenues for the year will have gone for
    purposes other than the Land and Water Conservation Fund.
        Will this really save us money? In the longer view, equal or
    greater savings could accrue by encouraging regional, state and local
    recreation agencies to more aggressively pursue resource conservation
    and recreation access projects before capital costs escalate and before
    Congress is asked to respond to future ``emergencies'' by considering
    these assets for inclusion in federal land systems. When such
    emergencies occur, the federal government may bear the full fiscal
    burden, not only of higher capital costs for land protection, but for
    development and management in perpetuity.
        While the costs of federal systems may be expected to increase
    consistent with the rate of inflation, they should not be increased
    through inclusion of projects lacking clear national significance. In
    the absence of a serious commitment to provide real incentives for
    systematic investment in partnership programs, piecemeal federal
    actions can be expected to touch randomly on first one site and then
    another, while the bulk of public recreation and resource conservation
    needs that could be addressed comprehensively are ignored. That
    partnership approach is part of the LWCF vision and promise.
        Just as importantly, the results of this fragmented federal
    approach will ignore the clear evidence that most of us seek our
    recreation experiences close-to-home (and put the greatest user
    pressures on close-to-home public resources). This does not diminish
    the values of more remote recreation destinations or the environmental,
    historic and cultural values of places farther away. It does suggest,
    however, that our public policies and investments should recognize that
    both Americans and foreign visitors have always demanded and will
    continue to demand a continuum of destinations and experiences. This,
    too, is part of the LWCF act's vision and promise, and it is precisely
    the role envisioned by its authors for Land and Water Conservation Fund
    grants.
        State and local investments in park and recreation resources (as
    well as all operation and management costs) have been largely borne by
    these governments and their publics. We expect this pattern to continue
    and strongly advocate it. The record also reveals that from 1965 to the
    mid-1980s the national government's reinvestment of a modest amount of
    its resource revenues in state and local projects leveraged immense
    public values and benefits for all taxpayers.
        You are in a position to restore rational investment in an area of
    great national importance. Our organization stands ready and willing to
    work with you, and your staff to realize this goal.
                Sincerely,
                                                  R. Dean Tice,
                                                    Executive Director.
                                     ______

      Letter From Elaine M. Stout, President, the Back Country Land Trust
                                            Alpine, CA, April 10, 1997.

    Re Land and Water Conservation Fund

    Hon. Senator Slade Gorton,
    Chairman, Subcommittee on Interior Appropriations,
    Washington, DC.
        We strongly urge the Interior Appropriations Subcommittee to move
    swiftly to ensure the success of current conservation plans, which will
    protect both private property rights and endangered habitats, by fully
    appropriating the LWCF.
        In numbers of endangered species and diversity of habitats, San
    Diego County is one of the nation's hot spots. It is also one of the
    nation's fastest growing areas. As the eyes of nation look to San Diego
    County as a model for conservation planning, what is done here will be
    critical for the success of conservation plans in other areas of the
    nation.
        Lands that contain high quality, endangered habitats have been
    identified under the MSCP in San Diego County. It has been estimated
    that it will cost over $300 million to acquire these properties. This
    amount is small compared to the enormous--in perpetuity--benefit that
    can be achieved here.
        Our non-profit organization, the Back Country Land Trust, is
    working cooperatively and closely with local landowners, agencies,
    communities and organizations in our area of service which is affected
    by the MSCP process. The number one concern among all groups--
    environmentalists and private property owners alike--is adequate
    funding for properties containing high quality endangered habitats in
    the MSCP planning area.
        We have identified three properties that have all of the following
    criteria and are in critical need for funding: A. High quality
    endangered habitats which contain significant numbers of rare,
    threatened and/or endangered species (red-zone areas in the MSCP
    planning area); B. Under imminent threat of development; C. Willing
    sellers at fair price; D. Significant community and local governmental
    support; E. Vehicle for acquisition/management/maintenance; and F.
    Support by local jurisdictions to accept LWCF funding.
        A description of the properties, their total acquisition costs,
    their dominant habitats and Table 3-5 MSCP species that have been thus
    far observed in each are listed below. The potential for more rare and
    endangered species on each of the properties below is very high.
                    wright's field, 365 acres, $2.9 million
        Habitats: High quality California native grassland, Engelmann Oak
    Woodland, Vernal Pools, Diegan Coastal Sage Scrub, Chamise Chaparral,
    Riparian.
        Fauna: Burrowing Owl, nesting Grasshopper Sparrows, San Diego
    Horned Lizard, Golden Eagle, Northern Harrier, Cooper's Hawk,
    Southwestern Willow Flycatcher, Western Bluebird, Mountain Lion,
    Southern Mule Deer.
        Flora: San Diego Thorn-mint.
        Special Significance: Native Grassland is pristine and of statewide
    significance for its high quality, density and unusually occurring
    species on site. Extremely fine clay soils, pools to remain hydrated
    for 5-6 weeks. County's largest population of Chocolate Lily, Palmer's
    Grapplinghook, and possibly San Diego Thorn-Mint. Host plant for Quino
    Checkerspot Butterfly abundant on site.
                    fanita ranch, 2,567 acres, $10.7 million
        Habitats: 1,070 acres Coastal Sage Scrub, Grassland, Oak Riparian,
    Oak Woodland.
        Fauna: Large population of California gnatcatchers, estimated at
    38-44 pair, Coastal Cactus Wren, San Diego Horned Lizard, Orange-
    Throated Whiptail, Least Bell's vireo, Grasshopper Sparrow, Northern
    Harrier, Cooper's Hawk, Golden Eagle, California Rufous-Crowned
    Sparrow, Mountain lion, Southern Mule Deer.
        Flora: San Diego Barrel Cactus, Willowy Monardella.
        Special Significance: One of the largest populations of California
    gnatcatchers in the MSCP area. Extremely vital, strategic corridor.
                       crestridge, 850 acres, $4 million
        Habitats: Coastal Sage Scrub, Willow Riparian, Oak Woodland, Oak
    Woodland Riparian, Grassland.
        Fauna: San Diego Horned Lizard, Golden Eagle.
        Flora: Lakeside Ceanothus, San Diego Ambrosia, San Diego Nolina.
        Special Significance: Largest known stand of Lakeside Ceanothus.
    Great Horned Owls nest on this site. Several species of oak. Very
    important riparian corridor. Currently within San Diego Wildlife
    Refuge. Development would seriously fragment and split off portion of
    refuge.
        It is estimated that the current MSCP plan in San Diego County has
    over $300 million in acquisition needs. We urge you to earmark a
    portion of LWCF funds for the above important projects in San Diego
    County.
        The most important source of funding for acquisition are the Land
    and Water Conservation Funds. These funds have not always been used for
    conservation purposes. This Congress can do much to rectify past
    abuses, by directing every LWCF dollar to our enormous backlog of
    conservation needs and help to provide a permanent legacy for future
    generations.
                Sincerely,
                                               Elaine M. Stout,
                                                             President.
                                     ______

       Prepared Statement of Thomas Steinbach, Director of Conservation,
                           Appalachian Mountain Club

        Thank you for this opportunity to provide testimony to Interior
    Appropriations Subcommittee. I am Tom Steinbach, Conservation Director
    of the Appalachian Mountain Club (AMC)--the nation's oldest recreation
    and conservation organization. I am speaking on behalf of AMC's 71,000
    members to urge your support for fiscal year 1998 appropriations for
    several important, cost-effective Department of Agriculture and
    Department of Interior programs.
        For over a century, the AMC has promoted the protection; wise use
    and enjoyment of the mountains, rivers, and trails of the Northeast.
    Today; a great need-remains for federal land, trail, and river
    conservation funds for the northeastern United States. The greatest
    proportion of the nation's people live, work, and recreate in the
    northeast. The lives and livelihood of these citizens depend on the
    region's clean air and water, and wild areas and open spaces. Yet over
    the past several years, we have witnessed several attempts to severely
    cut back federal funding for land and river protection. As an
    organization of dedicated outdoor volunteers, AMC's 120-year history is
    testament to the power of partnerships between the private and public
    sectors. Funding rollbacks threaten to unravel such partnerships,
    sacrificing the human and financial power that they leverage. It is
    time to reverse this trend.
        The AMC is sympathetic to the need to reduce the budget deficit,
    but the economic, social, and ecological benefits that accrue from our
    nation's land and river protection programs far outweigh their short-
    term costs. In the coming year, the AMC urges this Committee to
    continue to invest in the nation's people and environment by supporting
    the following programs.
                        land and water conservation fund
        As the federal government's premier land acquisition program, LWCF
    is critical to the future of many places that Americans treasure.
    Although LWCF has a dedicated revenue source, LWCF funding has fallen
    well below authorized levels. LWCF received its second lowest
    appropriation ever in 1997 at $149 million with no funding going to
    stateside LWCF. Further, in recent years, especially as the state grant
    program has dwindled, the Northeastern United States has not received
    an adequate share of these funds. Given that the greatest proportion of
    our citizens reside in the Northeast, this pattern is especially
    disturbing. In addition, this population is increasing as is the demand
    for recreational services.
                     appropriate $400-$500 million for lwcf
        Today you will receive testimony from a representative of a new
    national coalition working to revitalize LWCF. This new coalition,
    Americans for Our Heritage and Recreation, has brought together
    recreation businesses, conservation organizations, urban interests, and
    state land managers to call for increased appropriations to LWCF for
    both the federal and state sides of the program. AMC strongly supports
    the full list of federal and state-side projects to be submitted and
    noted in the testimony of this new coalition, given by Rindy O'Brien of
    the Wilderness Society. While our ultimate goal is: full appropriation
    of $900 million for LWCF, our short-term goal for both federal and
    state projects total approximately $400 million and represent the
    priorities of a broad array of interests working to provide
    recreational opportunities and a healthy environment for future
    generations. A significant portion of these funds should be directed to
    restore depleted state-side LWCF. All of the projects we mention in the
    body of our testimony are included in the list submitted by the new
    coalition.
        Of particular interest to AMC is the role that LWCF can play in
    protecting the Northern Forest of Maine, New Hampshire, Vermont and New
    York. The Northern Forest Lands Council (NFLC), which was established
    through bipartisan Congressional effort, recommended protection of key
    lands within this 26 million-acre region. The NFLC called on Congress
    to fully fund LWCF and reconfigure Me state grant program to ensure
    that sufficient federal funds can reach the Northern Forest. We.support
    a total LWCF funding request of $17.6 million for Northern Forest
    projects, with $12.9 million targeted for high-priority projects.
        As the Northeast's population grows, increasing pressure is
    building on our remaining forestland in the Northern Forest and
    throughout the Northeast. This trend threatens our forests' ability to
    provide jobs, outdoor recreation, wildlife habitat and timber projects.
    The need for LWCF funds in the Northern Forest--and throughout the
    Northeast--has never been greater.
                             forest legacy program
        The local economies and social fabric of the Northern Forest depend
    on the health and stability of their forests. The Forest Legacy
    Program, designed originally for the Northern Forest states, protects
    forests from inappropriate development while allowing forest management
    to continue. A voluntary partnership among eligible states, the US
    Forest Service, and forest land owners, the Forest Legacy Program is
    now working with eighteen states and one territory.
        The Northern Forest Lands Council recommended that the Northern
    Forest states receive an annual Forest Legacy Appropriation of $25
    million. AMC believes that this figure reflects the true need within
    the Northern Forest. Efforts have been made streamline the Forest
    Legacy program and make it more effective and responsive to land
    owners. We feel this is a positive step and will result in Forest
    Legacy funds reaching more landowners in a timely fashion. We support
    an appropriation of $27.4 million for projects in the Northern Forest
    region, of which $11.8 million is targeted for critical, high-priority
    projects.
              specific lwcf & forest legacy program appropriations
        For fiscal year 1998, we request the following specific LWCF and
    Forest Legacy appropriations. Those projects labeled urgent require
    immediate funding from LWCF to protect them from imminent sale and
    development.
    LWCF federal grants
        Urgent.--Sterling Forest, New York, $8.5 million, LWCF. Protection
    of Sterling Forest could be a reality this year given the continued
    commitment of federal, state, and private partners that have worked
    hard to conserve this 17,500 acre gem just 45 miles outside Manhattan.
    Last year Congress passed authorization to purchase Sterling Forest and
    appropriated $9 million of the $17.5 million anticipated federal
    contribution to the acquisition. We urge Congress to ensure completion
    of the Sterling Forest purchase this year by appropriating $8.5 million
    from the Land and Water Conservation Fund. Thisamount will complete the
    $17.5 million federal component to the project and match funds
    contributed by New Jersey, New York, and private donors. New Jersey has
    committed $10 million to the project already. New York has also
    committed $10 million and is expected to nearly double its
    appropriation this year. $5 million has been raised from the Lila
    Wallace Foundation and additional private funds continue to be raised.
        Urgent.--White Mountain National Forest--Lake Tarelton, New
    Hampshire 2000 acres, $2.7 million LWCF.
    LWCF State Grants
        Urgent.--Whitney Estate, Adirondacks, New York 15,000-25,000 acres,
    $10 million LWCF State Grant Funds.
        Urgent.--Long Trail, Vermont 1,060 acres, $162,500 LWCF State Grant
    Funds.
    Forest Legacy Program
        Urgent.--Fish Creek Watershed, New York 30,00040,000 acres, $5.6
    million Forest Legacy.
        Urgent.--Green River Reservoir, Vermont 6,350 acres, $1.5 million
    Forest Legacy.
        Urgent.--Nicatous Lake, Maine 22,000 acres, $3 million Forest
    Legacy.
        Urgent.--Upper Richardson Lake, Maine 5,122 acres, $1.65 million
    Forest Legacy.
        Pond of Safety, New Hampshire 9,880 acres, $1.5 million Forest
    Legacy.
        Champion Lands, New York 95,000 acres, $6 million Forest Legacy and
    $3 million LWCF State Grant Funds.
        Lake George, New York 400 acres, $1.75 million LWCF State Grant
    Funds.
        Domtar Lands, New York 105,000 acres, $6 million Forest Legacy.
        Mattawamkeag Lake, Maine 4,195 acres, Mattawamkeag River, Maine
    11,281 acres, Moose River, Maine 4,525 acres, $2.1 million Forest
    Legacy.
                appalachian national scenic trail--$7.2 million
        Protection of the Appalachian Trail has made tremendous headway
    under the leadership of this committee. Thanks to your diligent effort,
    only 37 miles of the total 2,158-mile trail remain unprotected. The
    total fiscal year 1998 need for the Appalachian Trail is $7.2 million
    with $4.2 million for National Park Service acquisitions and $3 million
    for US Forest Service acquisitions. We expect that with similar
    appropriations in each of the next three years, that the entire length
    of the trail will be protected by the year 2000.
        rivers, trails, and conservation assistance program--$12 million
        The Rivers, Trails, and Conservation Assistance Program (RTCA)
    provides technical assistance to communities and local organizations on
    river, trail, and conservation projects. For fiscal year 1997 citizens
    made over 400 project requests and NPS staff had funding for only half.
    Additionally, Congress has authorized 10 new heritage areas, most of
    which will fall under RTCA's jurisdiction. Therefore, for fiscal year
    1998, we urge funding for this valuable program be increased by $5
    million as follows: $300,000 increase for management of Wild and Scenic
    Rivers and $200,000 increase for National Trails System (both under NPS
    operations); $1.5 million for the 10 new National Heritage areas, $1.25
    million for technical assistance and heritage program administration,
    $1 million for a new watershed initiative, and $700,000 increase to
    RTCA base funding to enable staff to administer these new programs and
    to accept more project requests (under National Recreation and
    Preservation).
        silvio o. conte national fish and wildlife refuge--$2.1 million
        The Silvio O. Conte National Wildlife Refuge, which spans the
    length of the Connecticut River, is a model of a new federal approach
    to watershed conservation. Over the past two years, the Conte refuge
    has taken hold, with the formation of over 50 partnerships and the
    distribution of two rounds of grant funding to organizations in the
    refuge area. The AMC urges you to support $2 million for land
    acquisition and $100,000 for fish passage studies of the herring
    population, which has dropped to one-twentieth of original levels.
                  white mountain national forest--$10 million
        The White Mountain National Forest comprises about 770,000 acres of
    land in New Hampshire and Maine. Over 7 million people visit the area
    yearly. The AMC recognizes the impacts and the service needs of these
    visitors and we support the wide array of multiple uses in the WMNF.
    The current budget does not meet the needs for this magnificent area.
    The AMC urges the committee to support a fiscal year 1998 National
    Forest budget appropriation of $10 million for the White Mountain
    National Forest.
                       acadia national park--$6.5 million
        Acadia National Park draws over 2.9 million visitors every year. To
    provide for the comfort and safety of these visitors, basic park
    infrastructure must meet strict standards. Utilities, restrooms,
    campgrounds and picnic areas are sorely in need of repair and upgrading
    to meet code, to conform to Safe Drinking Water standards, and above
    all, to provide an enjoyable outdoor experience. In addition, Acadia
    includes 44 miles of historic carriage roads whose maintenance since
    1960 has fallen to the National Park Service. These roads represent a
    significant cultural and historic resource and require extensive
    rehabilitation of drainage systems, the road base and surface, and
    stone work. We urge you to support an appropriation of $5.3 million to
    upgrade utilities and facilities, and $1.2 million for rehabilitation
    of the historic carriage roads.
                                     ______

    Prepared Statement of Thomas M. Franklin, Wildlife Policy Director, The
                                Wildlife Society

        Mr. Chairman and members of the Subcommittee, The Wildlife Society
    is pleased to provide comments on the fiscal year 1998 Budget. The
    Wildlife Society is the association of professional wildlife biologists
    and managers. We were founded in 1936 and dedicated to excellence in
    wildlife stewardship through science and education. We are submitting
    for the record some detailed recommendations for each of the agencies
    listed above. In the past, the Society identified inherent funding
    difficulties in these agencies that have resulted from incremental
    budget cuts, downsizing, and seemingly constant reorganizations. Our
    concerns about these issues remain because more funding and staff
    resources, rather than less, are needed to address the increasingly
    complex biological conditions on public and private lands. However, I
    wish to focus my brief oral comments on a cross-cutting issue that
    affects each of the agencies and indeed all land management activities.
    This is the need for adequate funding to monitor biological resources
    that are affected by federal land management practices.
        In recent years, the resource management community has recognized
    that business as usual concerning the management of commodities on
    federal lands will make it increasingly difficult to meet public
    demands for conservation, recreation and education benefits from these
    lands. Such understanding led the agencies to adopt an ``ecosystem''
    approach to resource management. Ecosystem management has been widely
    discussed, debated and generally accepted among conservationists.
    However, the agencies have not yet gathered the political support and
    the necessary resources to implement ecosystem management effectively.
        Ecosystem management requires a change in the way research and
    management are accomplished. Managers must adopt an ``adaptive resource
    management'' approach. The Wildlife Society recently published an
    important paper ``ARM! For the future: adaptive resource management in
    the wildlife profession.'' I submit a copy of this report for your
    information. The authors explain that research and management must be
    integrated ``to address uncertainty in wildlife and ecosystem
    management, and thereby ameliorate controversy in the future. Research
    and management can no longer afford to be `two solitudes'; distinctions
    between basic and applied research have blurred. The central issue is
    the application of sound scientific principles to solve problems.''
    Management experiments must be initiated that can provide the knowledge
    needed for more effective and acceptable natural resource policy
    decisions. Adaptive management involves: (1) hypothesizing how
    ecosystems work, (2) monitoring results, (3) comparing results to
    expectations, and (4) modifying management to better achieve objectives
    through improved understanding of ecological processes.
        We recognize that there may be resistance among some who fear that
    monitoring will reveal information that will somehow constrain the
    ability of landowners to manage their property. To the contrary,
    appropriate monitoring can foster responsive management and help
    alleviate the need for regulation. We should not fear the message or
    the messenger. Decision makers need the best available information on
    which to base short and long-term actions.
        An absolutely key element of responsive natural resource management
    is support for monitoring. Without adequate monitoring, as is evident
    in each of the budgets of the federal agencies, truly responsive
    management will be impossible. There will be no way for managers to
    understand the actual biological consequences of their actions. Without
    monitoring, programs will be inefficient and likely ineffective in
    accomplishing resource management objectives. We understand that the
    White House Office of Science and Technology is developing a national
    monitoring proposal. We urge that this effort include input from the
    management agencies. We further suggest that the Administration prepare
    an analysis of monitoring needs for each agency to accomplish its
    management goals. We urge Congress to exert leadership to ensure
    adequate funding for monitoring in each of the budgets for the natural
    resource agencies.
        The Wildlife Society is pleased to offer the following detailed
    comments on the fiscal year 1998 budget
                      biological resources division, usgs
        The Biological Resources Division (BRD) of the U.S. Geological
    Survey houses most of the science, research, and monitoring
    capabilities of Interior's land management agencies. It is critical
    that these activities continue. The integration of the BRD as a
    division within the USGS reduced emphasis on biological research by
    further separating research activities from the management agencies
    that are charged with conserving the nation's wildlife resources.
    Reliable biological information is necessary for the sound stewardship
    of natural resources by federal and state land management agencies.
        Many issues under Interior Department's authority affect private,
    as well as public lands. Skilled managers and sound scientific
    information are critical to informed decision making regarding issues
    such as: (1) mitigating the effects of contaminants on wildlife
    populations such as that of DDT on bald eagles and peregrine falcons;
    (2) determining management prescriptions to improve forest and
    rangeland health; (3) setting appropriate fish and wildlife harvest
    levels; (4) protecting unique habitats and rare species; and (5) help
    in citizens achieve their land management goals consistent with
    conservation needs.
        The Wildlife Society recognizes that to achieve excellence in
    management, we must achieve excellence in science, first. To maintain
    healthy wildlife populations while providing for a variety of other
    uses, management programs must be based on results of quality
    scientific investigations that produce objective, relevant information.
    Scientists are needed to identify and analyze alternative management
    options for consideration by policy makers. Good scientific information
    can help managers understand how to conserve natural resources while
    allowing multiple uses including timber harvesting and grazing. If the
    science budget of the Interior land management agencies is stripped,
    the ability of its managers to carry out their crucial duties will be
    jeopardized.
    Research
        The Wildlife Society supports fiscal year 1998 funding for NBS at
    $149 million. Emphasis should be placed on adequate funding for
    Cooperative Fish and Wildlife Research Units, migratory birds,
    contaminants, wildlife health, Alaska wildlife, control of exotic
    species, habitat studies of agriculture and land management, and
    watershed level studies of wildlife affected by development. Special
    emphasis should be placed on the Cooperative Research Units. The
    Wildlife Society requests that this program be increased to at least
    $15 million. The Cooperative Research Program provides the natural
    resources management community with a scientific basis for making
    decisions, and with highly trained professionals to help implement
    them.
                           fish and wildlife service
    Wildlife diversity programs
        The Wildlife Society supports $1 million for the Wildlife
    Conservation and Appreciation Fund (established by the Partnerships for
    Wildlife Act of 1993). The Act establishes a formal partnership between
    the FWS, state wildlife agencies, and private organizations to
    cooperatively initiate wildlife and appreciation projects. Better
    information about species and habitat throughout the United States is
    needed to promote wildlife diversity, productivity and environmental
    health. Of particular importance are habitats and species that are
    declining. Sufficient funding now may prevent future listings under the
    Endangered Species Act.
        The Grants to States program, authorized for $5 million under the
    Fish and Wildlife Conservation Act, was not slated for funding in the
    administration's proposal. The Wildlife Society recommends strongly
    that the program receive its full appropriation of $5 million. The
    program should provide grants to states to assist them in the
    development and implementation of comprehensive wildlife conservation
    programs. Congress also should adopt a funding mechanism to support
    fish and wildlife diversity legislation by expanding the successful
    dedicated user fee approach of the Federal Aid to Wildlife Restoration
    Fund. This wise investment will help avoid future crises while
    providing needed conservation, recreation and education opportunities
    for all Americans.
    Endangered species
        The Wildlife Society supports the administrations's request for an
    additional $11.396 million in the Endangered Species Program. The
    President's request for an increase of $7.5 million for the Cooperative
    Endangered Species Fund (Section 6) is needed. The Cooperative
    Endangered Species Fund establishes grants to states to assist the FWS
    in its work to recover endangered and threatened species, and to
    monitor the status of candidate and recovered species. The additional
    funding is needed to support state recovery actions and for habitat
    conservation plans. We also support the President's proposed funding
    for listing, consultation, and recovery.
    Wetlands
        The administration's proposed funding for the North American
    Wetlands Fund is $14.4 million. The Wildlife Society recommends that
    the funding be increased to the full authorization level of $20
    million. This fund provides grant to support international Wetlands
    conservation. Criteria established under the North American Wetland
    Conservation Act encourage private-public cost-sharing projects for the
    purpose of protecting and managing wetland habitats for migratory birds
    and other wetland wildlife in Canada, Mexico and the U.S. The
    tremendous success of this program in generating in excess of a 2:1
    match from non-federal sources plus the acreage secured warrant its
    full appropriation.
    Migratory bird management
        The Wildlife Society supports the administration's funding of
    Migratory Bird Management at $17.107 million. The FWS is responsible
    for the management of migratory game birds, pursuant to the Migratory
    Bird Treaty of 1918.
        The Wildlife Society supports the administration's request for
    migratory nongame birds, which includes the Partners in Flight program.
    The migratory nongame bird program focuses on the following: conserving
    species assemblages rather than individual species, protecting areas of
    high diversity and density, preserving or restoring critical, declining
    or vulnerable habitats, and cooperating with the public and private
    sector to protect sites that support species otherwise at risk.
        The Wildlife Society support the administration's funding proposal
    for the North American Waterfowl Management Plan office at $2.543
    million. The North American Waterfowl Management Plan was established
    to conserve and restore North American wetland ecosystems for waterfowl
    and other wetland-dependent wildlife through forming partnerships.
    There are additional benefits associated with wetland restoration and
    these include: increased floodwater storage, reduction in flood damage,
    purification of groundwater, and retention of sediment.
    Refuges
        The Wildlife Society supports $200 million for refuge operations
    and maintenance. This amount will begin to address the enormous
    maintenance backlog of nearly $400 million that is allowing the Refuge
    System infrastructure to degrade. A significantly increased funding
    commitment is needed to restore the System to adequate conditions.
    National Fish and Wildlife Foundation
        The Wildlife Society supports the administration's request of $5
    million to fund the National Fish and Wildlife Foundation. The
    Foundation's funds leverage matching money from state and private
    sources to support many innovative wildlife conservation programs.
                           bureau of land management
    Wildlife habitat and fisheries management
        The administration's proposal of $27.234 million for wildlife
    habitat and fisheries management is not adequate to address the
    significant needs on the 270 million acres of land that is administered
    by the BLM. The number of wildlife biologists has been reduced to a
    level where each biologist is responsible for managing over 1 million
    acres of land. The Wildlife Society suggests a minimum of $30 million
    for this program area.
        The main objective of the wildlife and fisheries management program
    has been to implement the Fish and Wildlife 2000 strategic plan. The
    Wildlife Society recommends that this plan be clearly integrated into
    the BLM ecosystem management plans that are being developed.
    Threatened and endangered species
        The fiscal year 1998 proposed funding for threatened and endangered
    species is $16.795 million. This program involves recovery actions for
    threatened and endangered species to assure that activities on BLM
    lands do not jeopardize the existence of species habitat. The Wildlife
    Society recommends at least $20 million for this area.
    Oregon and California grant lands
        The Oregon and California Grant Lands appropriation provides funds
    for the management of revested railroad land, which is being managed
    for permanent forest production. The fiscal year 1998 funding request
    for O&C Lands is $101.406 million. TWS supports the administration's
    proposal to increase funding for O and C Grant Lands with greater
    emphasis on wildlife and fisheries conservation, especially to help
    implement the Northwest Forest Plan.
    Rangeland management
        The Wildlife Society supports the adminastration's fiscal year 1998
    request of $54.342 million for rangeland management. We urges the BLM
    to develop measurable standards and guidelines, and increased
    monitoring efforts, which are necessary for rangeland reform. In
    addition, we support continued efforts to improve riparian habitat and
    the commencement of scientifically based efforts to restore upland
    habitats. We support the additional appropriation of $250,000 for the
    Seeking Common Ground initiative. This program will attract matching
    grants that will bring ranchers and conservationists together to
    enhance livestock and wildlife habitat.
                                 forest service
    Wildlife management
        The President's budget proposes $30 million for the Get Wild
    program in fiscal year 1998. TWS recommends an increase of $10 million,
    for a total of $40 million. This funding level is still well below the
    $54 million in wildlife management opportunities identified in forest
    plans. Increased investments in wildlife will yield tremendous economic
    benefits to local communities. There are 11 emphasis areas of wildlife
    management within the Get Wild program that focus on partnerships,
    habitat protection, public enjoyment, and habitat improvement for
    particular wildlife species, groups of species, or special habitats.
    Increased funds are especially needed for the following program areas;
    Neotropical Migratory Bird Conservation (Partners in Flight), and
    Wetland Wildlife Habitat Management (Taking Wing), and cavity dependent
    species.
    Threatened, endangered and sensitive species
        The Every Species Counts program (threatened, endangered and
    sensitive species management) is slated for $27.2 million in the fiscal
    year 1998 budget proposal. The Forest Service manages habitat for over
    265 threatened and endangered species, as well as 2,300 species which
    have been identified as sensitive by regional foresters. There are
    urgent needs for additional funding in the following areas: recovery of
    listed species, the prevention of future species listing, and rare
    plant protection and management. The Wildlife Society requests that
    emphasis be placed on the management of the following species of
    terrestrial wildlife: Mexican spotted owl, willow fly-catcher, red
    cockaded woodpecker, grizzly bear, California spotted owl, northern and
    queen charlotte island goshawk, and marbled murrelet.
    Range management
        The administration is requesting $45.388 million for range
    management for fiscal year 1998, an increase of over $7 million over
    fiscal year 1997 enacted funds. The Wildlife Society supports this
    increase due to the importance of improving range conditions. Proper
    management of rangeland enhances ecosystems that are important for
    watershed protection, wildlife habitat, threatened and endangered
    species, recreation opportunities and livestock. Emphasis should be
    placed on restoration of riparian areas and monitoring of range
    condition. An additional $250,000 should be appropriated to support the
    Seeking Common Ground program.
    Forest Environment Research
        The Forest Environment Research program provides knowledge,
    techniques and strategies needed to manage and protect forest,
    rangeland and aquatic ecosystems. The administration's fiscal year 1997
    budget request for Forest Environment Research is $39.95 million. For
    fiscal year 1997, The Wildlife Society recommends that the Wildlife,
    Rare Plants and Communities research program be funded at $15.1
    million. The Wildlife Society also recommends that this money be
    allocated for the following specific research program focuses:
    threatened and endangered species, neotropical migratory birds, forest
    carnivores, forest raptors, old growth, and native prairie fauna.
    Research on threatened, endangered and sensitive species is especially
    important to help reduce future litigation under the Endangered Species
    Act.
    State and private forestry
        The cooperative state and private forestry program provides
    assistance to aid in the management and protection, of forest resources
    on state, urban, and private lands to meet domestic and international
    demands for goods and services. Fifty-nine percent of the Nation's
    commercial forest land is in nonindustrial private ownership. The
    proper management of these lands will ensure the future availability of
    natural resources. The Wildlife Society recommends an increased
    emphasis the Forest Legacy program, and the Urban and Community Forest
    Program. The Wildlife Society supports the President's request of $4
    million for the Forest Legacy Program. This amount would provide a
    continued base of support for this innovative program that protects
    private forest lands threatened by conversion to non-forest uses. The
    Wildlife Society supports the administration's budget request of $10.23
    million for the Stewardship Incentive Program. This program should
    encourage a landscape based perspective when planning for multiple
    benefits of forests on private lands. The Wildlife Society supports the
    President's request of $25.5 million for urban and community forests.
    The Initiative assists the federal government in responding to the
    needs of people in urban areas and provides federal resources to
    protect, maintain, and manage trees, forests, and related natural
    resources in and around cities and communities.
        Thank you for your support of scientifically based natural resource
    programs.
                                     ______

         Prepared Statement of David N. Startzell, Executive Director,
                          Appalachian Trail Conference

        Mr. Chairman: In behalf of the Appalachian Trail Conference, and
    for the reasons noted below, we are requesting an fiscal year 1998 Land
    and Water Conservation Fund appropriation of $7.2 million for
    Appalachian National Scenic Trail land acquisition: $4.2 million for
    the National Park Service Appalachian Trail program and $3 million for
    the U.S. Forest Service Appalachian Trail program. Those levels are
    consistent with the Administration's budget request and will ensure
    continued progress toward our ultimate goal of a publicly owned
    corridor or greenway extending the entire 2,160-mile length of the
    Appalachian Trail--a goal that we now believe is achievable in the year
    2000 (see tables 2 and 3).
        Background.--The Appalachian Trail was initially established
    between 1923 and 1937 and has been maintained as a continuous footpath
    since that time. In 1968, with the passage of the National Trails
    System Act, the Appalachian Trail was designated as the nation's first
    national scenic trail. The act also authorized federal land acquisition
    to establish a permanent route and protective corridor for what then,
    as now, was America's most prominent long-distance hiking trail.
    Although the authorization was established 29 years ago, it was not
    until 1978 that significant appropriations from the Land and Water
    Conservation Fund were made available for federal land acquisition
    along the trail. Nevertheless; the Appalachian Trail project has become
    an outstanding example of what can be achieved through the collective
    efforts of the Congress, the affected federal agencies, and the private
    sector, represented by the Appalachian Trail Conference and our club
    and individual volunteer affiliates.
        Resource characteristics.--The Appalachian Trail is a continuous,
    marked, 74-year-old footpath that traverses the Appalachian mountain
    chain from central Maine to northern Georgia for a distance of 2,160
    miles. The footpath and its associated protective corridor form a
    greenway extending along much of the eastern seaboard and connecting
    more than 75 public land areas in 14 states, including six other units
    of the national park system and seven national forests, as well as many
    state park, forest, and game-management units. Virtually every mile of
    the trail is within easy access of a major population center, and some
    portion of the trail is within a day's drive for two-thirds of the
    population of the United States.
        As the longest unit of the national park system, the Appalachian
    Trail provides opportunities for millions of visitors each year to
    traverse and experience much of the richness and diversity of eastern
    America: its highest mountains, its great rivers, its pastoral valleys,
    its cultural legacies. The trail also affords opportunities for
    continuous long-distance hiking that are unparalleled anywhere else in
    the world. An estimated three to four million annual visitors enjoy
    some portion of the trail, ranging from leisurely strolls to weekend
    outings to extended backpacking excursions, ranking the trail among the
    most heavily visited units of the national park system.
        In addition to its recreational qualities, the Appalachian Trail
    and its associated corridor represent an important reservoir of
    biological diversity. For example, the trail, due to its great
    latitudinal extent, passes through four of the seven primary forest
    habitats of North America. Moreover, recent natural-diversity
    inventories conducted by the Appalachian Trail Conference and a variety
    of state natural-heritage programs have identified 1,325 occurrences of
    rare, threatened, or endangered plants and animals at 370 sites along
    the approximately 70 percent of the trail route that has been surveyed
    to date. These findings have led a number of natural scientists to
    conclude that the trail and its greenway will play an increasingly
    important role in ensuring critical habitat for many species of flora
    and fauna in the eastern United States. These findings also rank the
    Appalachian National Scenic Trail as perhaps the most biologically
    diverse unit of the national park system.
        A public/private partnership.--For more than 70 years, the
    Appalachian Trail project has been recognized as one of America's most
    successful examples of private-citizen action in the public interest.
    Since the initial construction of the trail in the 1920s and 1930s,
    volunteers affiliated with the Appalachian Trail Conference (ATC) have
    constructed, reconstructed, and maintained the footpath as well as a
    system of more than 250 shelters and associated facilities such as
    privies, bridges, signs, and parking areas. More recently, as a result
    of an unique 1984 agreement between the National Park Service and ATC,
    the conference has accepted management responsibility for more than
    100,000 acres acquired by the National Park Service along the trail.
    ATC, through its network of 32 club affiliates and many thousands of
    volunteers, is now responsible for virtually all phases of ``park''
    operations, including access control, structures management, public
    health and safety issues, and natural and cultural resources
    management. In 1996, more than 4,790 volunteers contributed more than
    173,800 hours of labor along the trail: an annual contribution valued
    in excess of $2 million. In addition, each year the conference and its
    club affiliates contribute more than $2 million in operating revenues
    to support volunteer-based stewardship of the trail and educational and
    other forms of assistance to its visitors.
        Program accomplishments.--The Appalachian National Scenic Trail
    land-acquisition programs of the National Park Service (NPS) and U.S.
    Forest Service (USES) surely rank among the most successful federal
    land-acquisition programs in the nation. With the strong support of
    this committee and the Congress as a whole, the two agencies have made
    truly remarkable progress in this long-term program: Since 1978, the
    NPS has acquired 2,348 parcels of land, encompassing more than 100,000
    acres in 11 states, and protected a permanent right-of-way and
    associated resources along 599 miles of the trail. Similarly, the U.S.
    Forest Service has acquired more than 45,600 acres within the
    proclamation boundaries of the seven national forests crossed by the
    trail and protected more than 142 miles of right-of-way. As a result,
    while in 1978 more than 800 miles of the trail were located on private
    lands, often in areas with inferior natural or recreational qualities,
    including more than 200 miles along roads, today only 36 miles remain
    unprotected. In addition, in many instances, land acquisition has
    permitted relocations of the footpath to new areas possessing
    outstanding natural and scenic qualities.
        Funding requirements.--While only approximately 36 miles of the
    Appalachian Trail remain to be protected, the total remaining program
    for both the National Park Service and the U.S. Forest Service will
    require the acquisition of approximately 400 parcels encompassing
    approximately 17,000 acres (see table 1). All of these remaining
    parcels possess significant natural, scenic, and recreational qualities
    worthy of federal protection, and many are threatened by incompatible
    development or land uses. For fiscal year 1998, given the requested
    appropriation level of $7.2 million, we estimate the National Park
    Service will acquire an additional 1,880 acres, while the U.S. Forest
    Service will acquire an estimated 2,250 acres (see tables 2 and Table
    3). Based on past experience, we also estimate that both agencies will
    achieve 100-percent obligation rates. In addition, we now believe,
    assuming similar appropriation levels in fiscal year 1998 and fiscal
    year 1999, the entire length of the Appalachian Trail from Maine to
    Georgia--the world's longest publicly owned greenway--can be fully
    protected in the year 2000, providing the American people with a
    remarkable legacy for the 21st century and beyond.
        Again, in behalf of the Appalachian Trail Conference, we wish to
    thank the chairman and members of the subcommittee for this opportunity
    to testify, for your consideration of our fiscal year 1998
    appropriations request, and for the subcommittee's support over many
    years.

        Attachments: Tables 1, 2, 3

                                                                             TABLE 1.--APPALACHIAN TRAIL PROTECTION PROGRAM
                                                                    [Protection progress by agency, March 1, 1978 thru December 1996]
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Protected March 1978 to present                                                 Protection pending
                                                  --------------------------------------------------------------------------------------------------------------------------------------------------
                                                             NPS                     State                     USFS                     NPS                    State                   USFS
                                                  --------------------------------------------------------------------------------------------------------------------------------------------------
                                                    Miles   Acres   Tracts   Miles   Acres   Tracts   Miles   Acres   Tracts   Miles   Acres  Tracts   Miles   Acres  Tracts   Miles   Acres  Tracts
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Maine........................................   169.9   28,645     110    68.2    9,791      18  ......  .......  ......     2.8     923       5     1.4     128       2  ......  ......  ......
    New Hampshire................................    45.0    8,393     118     0.5       68       1     7.4    6,806      11  ......      86       3  ......  ......  ......     0.1       5       3
    Vermont......................................    49.3    8,998     198     3.1      384       2    18.3    8,799      29     1.7   3,491      16  ......  ......  ......  ......      60       3
    Massachusetts................................    31.2    5,305     156    17.3    2,746      39  ......  .......  ......     0.1     453       7  ......  ......  ......  ......  ......  ......
    Connecticut..................................    32.2    6,220     125     6.0      550       3  ......  .......  ......     2.8     624      12  ......  ......  ......  ......  ......  ......
    New York.....................................    57.0    7,967     228     4.4      551       4  ......  .......  ......     0.1     453      32     0.2      16       2  ......  ......  ......
    New Jersey...................................  ......      802      59    24.1    3,031     103  ......  .......  ......  ......     293       9  ......      48       1  ......  ......  ......
    Pennsylvania.................................    97.0   13,062     573    10.3    1,447      29  ......  .......  ......     3.4     257      26  ......  ......  ......  ......  ......  ......
    Maryland.....................................     3.5    1,092     104     8.9    1,360     106  ......  .......  ......     3.9     907      35     1.8     196      14  ......  ......  ......
    Virginia.....................................    88.4   16,123     544     3.3      371       8    32.0   12,973     161     4.9   1,806      48     0.2       1       1     5.8   3,500      66
    West Virginia/Virginia.......................    25.6    3,355     133  ......  .......  ......  ......  .......  ......  ......      16       2  ......  ......  ......  ......  ......  ......
    North Carolina/Tennessee.....................  ......  .......  ......  ......  .......  ......    83.3   16,648     343  ......  ......  ......  ......  ......  ......     7.3   3,400      98
    Georgia......................................  ......  .......  ......  ......  .......  ......     1.2      446      18  ......  ......  ......  ......  ......  ......  ......      30       1
                                                  --------------------------------------------------------------------------------------------------------------------------------------------------
          Total..................................   599.1   99,962   2,348   146.1   20,299     313   142.2   45,672     562    19.7   9,309     195     3.6     389      20    13.2   6,995     171
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                                             TABLE 2.--APPALACHIAN TRAIL PROTECTION PROGRAM
                                                                      [National Park Service funding required to complete program]
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                Fiscal years--
                                                                   ---------------------------------------------------------------------------------------------------------------------------------
                                 State                                        1997                      1998                      1999                      2000                  Total program
                                                                   ---------------------------------------------------------------------------------------------------------------------------------
                                                                       Acres       Dollars       Acres       Dollars       Acres       Dollars       Acres       Dollars       Acres       Dollars
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Maine.........................................................          896     $694,000  ...........  ...........  ...........  ...........           27      $44,000          923     $738,000
    New Hampshire.................................................           86      119,000  ...........  ...........  ...........  ...........  ...........  ...........           86      119,000
    Vermont.......................................................        2,145      573,000        1,283     $675,000           18      $85,000           61      347,000        3,507    1,680,000
    Massachusetts.................................................          430      445,000           17       44,000  ...........  ...........  ...........  ...........          447      489,000
    Connecticut...................................................           20       40,000          107      339,000          366      722,000  ...........  ...........          493    1,101,000
    New York......................................................           85      187,000           63      333,000           20      166,000  ...........  ...........          168      686,000
    New Jersey....................................................           97      546,000           28      188,000  ...........  ...........          215      871,000          340    1,605,000
    Pennsylvania..................................................           49      121,000           83      242,000           14       53,000          104      292,000          250      708,000
    Maryland......................................................          141      535,000           96      698,000          602    1,950,000          119      742,000          958    3,925,999
    West Virginia.................................................  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........
    Virginia......................................................          195      240,000          206      881,000          827      424,000          255      735,000        1,483    2,280,000
                                                                   ---------------------------------------------------------------------------------------------------------------------------------
          Total...................................................        4,144    3,500,000        1,883    3,400,000        1,847    3,400,000          781    3,031,000        8,655   13,331,000
    Boundary survey...............................................  ...........      500,000  ...........      800,000  ...........      800,000  ...........      800,000  ...........    2,900,000
                                                                   ---------------------------------------------------------------------------------------------------------------------------------
          Grand total.............................................  ...........    4,000,000  ...........    4,200,000  ...........    4,200,000  ...........    3,831,000  ...........   16,231,000
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                         TABLE 3.--APPALACHIAN TRAIL PROTECTION PROGRAM
                                                  [National Park Service funding required to complete program]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Fiscal years--
                                 ---------------------------------------------------------------------------------------------------------------------------
               Forest                      1997                    1998                    1999                     2000             Total remaining program
                                 ---------------------------------------------------------------------------------------------------------------------------
                                    Acres      Dollars      Acres      Dollars      Acres      Dollars       Acres       Dollars       Acres       Dollars
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    White Mountain (New
     Hampshire).................          4      $40,000  .........  ...........  .........  ...........            1      $10,000            5      $50,000
    Green Mountain (Vermont)....         60       35,000  .........  ...........  .........  ...........  ...........  ...........           60       35,000
    Washington/Jefferson
     (Virginia).................        200      600,000      1,300   $1,500,000      1,100   $1,400,000          900    1,365,000        3,500    4,865,000
    Nantahala/Pisgah (North
     Carolina)..................        100      325,000        250      500,000        400      750,000          350      925,000        1,100    2,500,000
    Cherokee (Tennessee)........        750    1,000,000        700    1,000,000        400      700,000          450      700,000        2,300    3,400,000
    Chattahoochee (Georgia).....  .........  ...........  .........  ...........  .........      150,000  ...........  ...........           30      150,000
                                 ---------------------------------------------------------------------------------------------------------------------------
          Grand total...........      1,114    2,000,000      2,250    3,000,000      1,930    3,000,000        1,701    3,000,000        6,995   11,000,000
    --------------------------------------------------------------------------------------------------------------------------------------------------------

                                     ______

       Prepared Statement of Mary Margaret Sloan, Conservation Director,
                            American Hiking Society

        As the conservation director for American Hiking Society, a non-
    profit conservation organization, I am speaking on behalf of over
    500,000 hikers nationwide. While economic, health and social benefits
    of trails are satisfied primarily at the local level, a strong but
    well-placed federal involvement is necessary for these benefits to be
    fully realized.
        The numerous economic, health and social benefits of trails are
    compelling reasons for Congress to invest tax dollars in them. It makes
    sense for Congress to encourage and facilitate recreational land use,
    especially when examining the impact recreation has on the U.S.
    economy; for example, the Forest Service calculates that 74.8 percent
    of the $130.7 billion generated toward the Gross National Product by
    activities in National Forests will come from recreation in the year
    2000. American Hiking recommends Congress appropriate the following
    amounts for recreation:
      --National Trails System: (a) National Park Service: $3.5 million for
            the 15 national scenic and national historic trails it
            administers, (b) USDA Forest Service: $1.35 million for the 10
            national scenic and national historic trails it administers
            either solely or through agreements with the National Park
            Service, (c) Bureau of Land Management: $400,000 to administer
            the Iditarod National Historic Trail and for the portions of
            nine other national scenic and national historic trails managed
            through agreements with the Park Service and Forest Service;
      --National Park Service Rivers, Trails and Conservation Assistance
            program: $11.5 million to support over 200 projects nationwide
            and provide base funding, technical assistance and
            administration to the 10 newly-designated National Heritage
            Areas;
      --National Park Service Challenge Cost-share: $600,000 for the 15
            national scenic and national historic trails it administers;
      --Forest Service Trails Construction/Reconstruction: $36.5 million
            for the 125,000 miles of trail it administers;
      --Bureau of Land Management Recreation Management: $50.5 million;
      --Land and Water Conservation Fund: $7.2 million for the Appalachian
            National Scenic Trail.
        Trails increase property values, contribute to local and national
    economies, and provide avenues to boost public health. A 1992 study by
    Greenways, Inc. found that Seattle's Burke-Gilman Trail has increased
    the value of homes near the trail by 6.5 percent. And the Outdoor
    Recreation Coalition of America, a trade association, estimates that
    total current sales of outdoor products and specialty items are $10
    billion. One of the reasons Americans invest so much in their local
    trails is the health benefits exercising on trails can provide:
    preventing heart disease, decreasing hypertension, improving and
    preventing osteoporosis and losing weight.
                             national trails system
        One of the most visited components of America's recreation lands
    are the 37,000 miles of congressionally-designated long-distance
    trails. The Appalachian Trail alone, stretching 2,100 miles from Maine
    to Georgia, receives 3-4 million visitors per year. The annual
    appropriations for these trails are very small, compared to their
    length--approximately $95 per mile (excluding land acquisition through
    the Land and Water Conservation Fund). American Hiking supports a
    National Park Service appropriation of $3.25 million, principally
    because of the demands the newly designated Selma-to-Montgomery
    National Historic Trail and the revitalized Potomac Heritage National
    Scenic Trail will put on an already under-funded program.
        The American public has invested heavily in its national trails
    system. In 1996, local trail organizations brought over 473,000 hours
    of volunteer labor and over $4 million in direct financial
    contributions to the trail-building efforts of public-private
    partnerships. The Potomac Heritage Trail was designated a National
    Scenic Trail in 1983, but public involvement and interest lagged at
    that time. 1996 saw a renewed interest in the trail and over 40 private
    groups are expected to participate in a trail community summit for the
    Potomac Heritage Trail this spring. To support the rebirth of this
    project, to conduct the legally required comprehensive plan for the
    Selma-to-Montgomery National Historic Trail and to meet the demands of
    the public, the National Park Service long-distance trails budget
    should be increased to $3.25 million, for the 15 trails it administers.
    The USDA Forest Service should receive $1.35 million for the four
    trails it administers, and the BLM should receive $400,000 to
    administer the Iditarod National Historic Trail and for the portions of
    seven other trails managed by the BLM through agreements with the Park
    Service and the Forest Service.
       national park service rivers, trails and conservation assistance
                                    program
        American Hiking strongly believes that the future of trails and
    outdoor recreation lies in the hands of the American public. However,
    the federal role in trails remains essential. Federal staff knowledge,
    facilitation skills, and technical expertise are needed so that local
    and state governments can do for themselves. The National Park Service
    Rivers, Trails and Conservation Assistance program (RTCA) has been one
    of the more effective federal programs in encouraging local initiative
    and providing technical assistance. One example of the program's
    success is the Arizona Trail. In partnership, the Arizona Trail
    Association, Arizona State Parks, four national forests, BLM, and four
    national parks are well on the way to establishing a 750-mile trail
    crossing Arizona from Mexico to Utah. Many parts of the trail are
    primitive, passing through wilderness areas, while other sections of
    the trail pass near or through urban areas, providing close-to-home
    connections to surrounding natural areas. RTCA assistance in completing
    the trail includes technical assistance in route planning, helping to
    establish a friends of the trail group to maintain the trail and
    coordinating involvement of the four national parks.
        Unfortunately, the program is hampered by a funding shortage. Of
    the 400 project requests RTCA received from states, localities and the
    private sector last year, it was able to accept only one-half. With a
    $700,000 increase to its base funding, RTCA will be able to accept 15-
    30 additional projects.
        In addition this program is taking on several new types of projects
    this year. The 104th Congress designated ten heritage areas, for which
    RTCA will require $100,000--a total of $1 million, plus $500,000 for
    competitive project-specific funding and $1.25 million for technical
    assistance for these programs. An investment in these programs will
    yield benefits ten-fold in state, local and private investment and
    public health and enjoyment. As co-chair of the Rivers and Trails
    Coalition, representing 29 non-profit organizations and trade
    associations, American Hiking requests full funding for this program.
                   national park service challenge cost-share
        National Park Service Challenge Cost Share program is a valuable
    tool, contributing to the completion of our national trails system. In
    fiscal year 1997, approximately $600,000 was earmarked for national
    scenic and national historic trails within this program; the state and
    local government match was almost double. This match is the key to a
    successful federal program; it indicates that there is significant
    local support for the project, and it provides a basis for a true
    partnership. Local investment in trails, which this program demands, is
    a program worth receiving full federal backing.
               forest service trails construction/reconstruction
        After floods and mudslides devastated the Pacific Northwest this
    winter, the Forest Service Trails Construction/Reconstruction needs are
    now $36.5 million. Trails off of the Columbia River Gorge suffered
    tremendous damage; flow of granular snow scoured the whole gorge,
    wiping out the Eagle Creek Trail--among others--along with the trail's
    suspension bridge. The FS manages 125,000 miles of trail, including the
    Continental Divide, Pacific Crest and Florida National Scenic Trail,
    and the Nez Perce National Historic Trail. Many of these miles of trail
    need federal attention and assistance.
        Forest Service Trails Construction/Reconstruction is not the only
    trail need in the Forest Service, but it represents the only trail line
    item in the FS budget. Trail maintenance was subsumed under Recreation
    Operations and Maintenance in fiscal year 1996. Since the line-item no
    longer exists, growing trail maintenance needs often go unmet, adding
    to a construction/reconstruction/maintenance backlog of $267 million.
    Hikers do what they can to alleviate this enormous backlog; they
    volunteer their time and energy. In the White Mountain National Forest
    last year alone, volunteers from the Appalachian Mountain Club
    contributed over 16,100 hours. American Hiklug requests that a line-
    item for FS Trail Maintenance for $30 million be included in the fiscal
    year 1998 budget.
                bureau of land management recreation management
        The Bureau of Land Management's current recreation management need
    is $50.5 million, which is an increase of $4.7 million over fiscal year
    1997. This increase, which includes recreation, recreation operations
    and wilderness, is entirely justified by the devastation from floods
    and fires in the Pacific Northwest. In addition to trail damage from
    natural causes, there is wear and tear from increased recreational use.
    The BLM estimates that in 1998, recreation visitor days will increase
    by 2 percent, to 75 million. The Outdoor Recreation Council of America
    estimates that, nationally, tent camping and backpacking will continue
    to increase at 11 percent annually; most of this use will occur on
    federal lands.
        The demand for recreation on our public lands is staggering and
    American Hiking urges Congress to protect the investment American
    taxpayers have made in these lands. The private sector is contributing
    where it can. The BLM reports that in 1994 volunteers contributed
    nearly 532,000 work hours valued at over $5.8 million. While these
    numbers are significant, volunteers can augment, but not replace,
    federal responsibility. The relationship needs to be a balanced public-
    private one, and the public responsibility is $50.5 million.
        BLM recreation opportunities include 502 miles of the Continental
    Divide and Pacific Crest National Scenic Trails, 3,600 miles of the
    Iditarod, Juan Bautista de Anza, California, Nez Perce, Lewis and
    Clark, Oregon, Santa Fe, Mormon Pioneer, and Pony Express National
    Historic Trails, 429 miles of 26 National Recreation Trails, and 7,370
    miles of 68 multiple-use trails.
                        land and water conservation fund
        Since its inception in 1964, the Land and Water Conservation Fund
    (LWCF) has proved to be a particularly valuable tool. This fund is
    authorized at $900 million per year for land acquisition. Yet the
    average funding over the last 17 years has been approximately one-
    fourth of the authorized level. American Hiking supports full funding
    for both the state- and federal-side LWCF and particularly supports
    earmarking $7.2 million for the Appalachian Trail ($4.2 million for NPS
    land protection in eight states and $3 million for FS land protection
    in Virginia, North Carolina and Tennessee). The Appalachian Trail
    Conference, which has management responsibility for the trail,
    estimates that funding at this level will permit the acquisition of
    1,883 acres by the NPS and 2,250 by the USDA FS.
        The Appalachian Trail Conference anticipates that at an
    appropriation rate of $7 million per year, the trail will be completely
    protected by the end of the 20th century, making it the first national
    scenic trail to have that distinction.
        American Hiking recognizes that there are only so many resources
    that Congress can direct toward trails. AHS supports the Forest Service
    Roads Construction budge cuts outlined in the Green Scissors Report.
    This is estimated to save $50 million annually, more than enough to
    cover the increases proposed here. American Hiking hopes that Congress
    recognizes and appreciates the time and muscle power that volunteers
    around the country have contributed to our federal lands to make them
    accessible and enjoyable for all Americans. American Hiking believes
    that the balance between the investment of the federal government and
    the investment by private citizens is struck by the dollar figures we
    have outlined in this testimony.
        Thank you for the opportunity to speak before you today. American
    Hiking Society's members and outdoorspeople nationwide appreciate the
    subcommittee's support in the past and look forward to continued strong
    support.
                                     ______

    Prepared Statement of Gregory E. Conrad, Executive Director, Interstate
                           Mining Compact Commission

        My name is Gregory E. Conrad and I am Executive Director of the
    Interstate Mining Compact Commission. I appreciate the opportunity to
    present this statement to the subcommittee regarding the views of the
    Compact's member states concerning the fiscal year 1998 Budget Request
    for the Office of Surface Mining (OSM). In its proposed budget, OSM is
    requesting $50.1 million to fund Title V grants to states for the
    implementation of their regulatory programs and $142.3 million for
    state Title IV abandoned mine land program grants. Our testimony will
    address both of these budgeted items.
        The Compact is comprised of 18 eastern and mid-continent states
    that together produce some 70 percent of our Nation's coal as well as
    important non-coal minerals. Participation in the Compact is gained
    through the enactment of legislation by the member states authorizing
    their entry into the Compact and they are represented by their
    respective Governors who serve as Commissioners.
        The Compact's purposes are to advance the protection and
    restoration of land, water and other resources affected by mining
    through the encouragement of programs in each of the party states that
    will achieve comparable results in protecting, conserving and improving
    the usefulness of natural resources and to assist in achieving and
    maintaining an efficient, productive and economically viable mining
    industry.
        The Commission has testified before your subcommittee on several
    occasions over the years and has appreciated the subcommittee's
    consideration of our comments and concerns. Given the attention that
    Congress is directing toward the federal budget in terms of deficit
    reduction goals, our primary purpose today is to emphasize the critical
    role played by the states under the structure of the Surface Mining
    Control and Reclamation Act of 1977 (SMCRA) and to urge that the OSM
    budget be aligned so as to support the continuing work of the states.
        Before providing the states' views on specific budget items, I
    would like to address our concerns about the importance of the state/
    federal relationship called for under SMCRA. Congress incorporated the
    concept of cooperative federalism in SMCRA because of its belief that
    the states were in the best position to regulate mining operations
    within their borders. At the same time, Congress recognized the need
    for a limited federal oversight role to assure a degree of national
    uniformity among state programs and consistency in state performance.
    This scheme of allocated governmental authority between state and
    federal regulators can and does work in the day-to-day implementation
    of SMCRA when states and OSM are coordinating their efforts. Regardless
    of the level of funding, program expenditures will be more efficient
    and effective if OSM and the states are communicating and cooperating,
    rather than competing and duplicating responsibilities.
        In recent years, OSM has made meaningful strides to incorporate the
    views of the states as part of several ``Task Force initiatives'' that
    directly impact the state/federal relationship and the effective
    implementation of SMCRA. These include federal oversight of state
    programs, use of Ten-Day notices in primacy states, prediction and
    treatment of acid mine drainage at active mining sites, and remining.
    These initiatives address many of the critical issues facing the states
    and OSM today. We have appreciated OSM's willingness to work with the
    states to explore potential solutions to these complex matters and,
    while the states and OSM may not see eye-to-eye on every issue, we
    trust that OSM will continue to operate in an environment of openness
    and congeniality with the states.
        As Congress makes the difficult funding decisions required under
    the deficit reduction plan, we believe it is essential to keep in mind
    that the goal of SMCRA is to preserve the environment where active
    mining operations occur and to enhance the environment through the
    remediation of past problems associated with abandoned mines. We assert
    that funds should be appropriated by Congress in a manner that best
    accomplishes this goal--and that best serves the American people. We
    believe that an analysis of SMCRA confirms that the states are to take
    the lead in pursuing this goal and that state programs for active and
    abandoned mines need to be adequately funded to accomplish this
    objective. Furthermore, from a pragmatic budgetary perspective,
    experience demonstrates that it will cost the federal government
    significantly more to undertake this task than to partially fund the
    existing 23 state regulatory programs. The cost of the existing federal
    regulatory program remains high and in some cases is out of line with
    state expenditures and responsibilities under SMCRA.
        Under the provisions of SMCRA, primary regulatory authority for the
    implementation of the Act was vested in the states. Congress provided
    for assistance to the states in developing and implementing regulatory
    programs to achieve the purposes and objectives of SMCRA through annual
    grants to the states under Title V of the Act. The states have come to
    rely on these Title V grants as a critical portion of the funding
    necessary to carry out their responsibilities as primary regulators
    under SMCRA. The necessity of this funding has taken on increased
    importance as state budgets struggle to keep pace with inflation and
    meet projected regulatory needs. Without these grants, it is unlikely
    that the states would be able to maintain the comprehensive, high
    quality regulatory programs expected under the provisions of SMCRA.
        In OSM's fiscal year 1998 proposed budget, state Title V regulatory
    grants have been funded at $50.1 million. OSM notes in its budget
    justification document that this is a reduction of $500,000 from last
    year's budgeted amount and explains that, in part, this decrease
    ``reflects smaller grant requests from States who are having difficulty
    meeting the matching share requirements of SMCRA.'' Although OSM fails
    in its budget justification document to identify specific instances of
    this phenomenon, as we noted in our statement before your subcommittee
    last year, some states are indeed facing decreasing state revenues for
    state program implementation. Most of these decreases are the direct
    result of decreasing coal production due to the impacts of the Clean
    Air Act Amendments of 1990. Since most of the states receive a
    significant portion (if not all) of their state revenues from fees
    assessed to coal operators, as these operators (particularly those
    mining high sulfur coal) reduce their production (or go out of business
    altogether due to implementation of the 1995 Phase I requirement
    contained in the Clean Air Act), those fees evaporate and are generally
    not replaced by revenues from other sources. States are simply not in
    the position to fund their state regulatory programs from general
    revenues given the fiscal belt tightening that is occurring at the
    states level. And yet full funding is necessary to support the affected
    state programs because regulatory efforts and needs do not decrease
    directly with decreased production or numbers of active permits. In
    some instances, just the opposite is true--the number of enforcement
    actions, civil penalties, permit revocations, bond forfeitures, and
    associated appeals increase as markets deteriorate, production and
    revenue decline and bankruptcies increase.\1\
        OSM also fails to note that the states had projected a need for
    $57.7 million in Title V grant moneys when they submitted grant
    requests for fiscal year 1998 about 18 months ago. Consequently, the
    states are looking at an overall shortfall of $7 million between what
    they had projected was needed to run their programs and what OSM
    believes is now necessary. This shortfall is $2.5 million greater than
    last year's shortfall amount of $4.6 million.
        Meeting the states' funding needs is essential to offset the rising
    costs associated with the implementation of regulatory programs, which
    includes such activities as reviewing mine permit applications,
    designating lands as unsuitable for mining, inspecting surface mining
    operations, and maintaining effective enforcement programs. As we noted
    in our statement last year, we were concerned that OSM was initiating a
    trend, supposedly justified by deficit-reduction belt tightening, that
    would result in incremental decreases in the amounts being granted to
    the states. In light of this year's budget numbers, it appears our
    fears were justified and have become a reality. When factored together
    with the rising costs associated with implementing state programs, the
    compounded impact of these grants reductions will result in under-
    funded state regulatory programs and potential concomitant impacts on
    the ground.
        For the states to continue the effective implementation of their
    programs, additional federal funding above and beyond that which we
    have traditionally received from OSM will be required. We are therefore
    requesting that OSM's overall appropriation for state Title V grants be
    increased by an additional $35.75 million to $86.25 million so as to
    accommodate the funding needed by states to run their programs. Under
    this scenario, the federal government would provide 75 percent of the
    necessary funding for state program implementation, while the states
    would provide a 25 percent match. We have also requested the
    Congressional committees with jurisdiction over OSM and the Surface
    Mining Act to adjust the specific statutory language in Section 705 of
    the Act to recognize this new funding reality. A resolution to this
    effect adopted by IMCC is enclosed.
        In any event, should this Congress not increase OSM's appropriation
    to accommodate a 75 percent federal funding formula, we urge the
    Appropriations Committee to increase the amount for Title V grants from
    OSM's proposed amount of $50.1 million to $57.5 million in order to
    meet the states' projections of fiscal year 1998
    implementation costs. While we can appreciate the necessity of
    containing the cost of federal regulatory programs, it is essential
    that funding for state programs be preserved at adequate levels since
    the states act as the front line regulatory authorities under SMCRA. It
    also is important to structure any realignment of OSM's budget in such
    a way that the valuable OSM activities which support and enhance state
    programs are not undermined. These include technical training, the
    Technical Information Processing System, the Applicant/Violator System
    (AVS), the COALEX Legal Research System, and a properly focussed
    evaluation of state programs.
        The Compact states also urge the subcommittee to adequately fund
    the Title IV program for reclamation of abandoned mine lands (AML). As
    with Title V regulatory programs, it is important to examine all SMCRA
    program components with the objective of maximizing SMCRA services and
    benefits to our customers under Title IV. We assert that the states
    have been and continue to deliver these benefits and services in the
    most cost-effective and efficient manner through their state programs.
    However, with regard to Title IV funding in particular, we are seeing
    less and less on-the-ground reclamation per dollar spent as states
    struggle to maintain and implement their basic AML delivery system with
    decreasing amounts of money. This is especially true for smaller
    (minimum) state programs where a 25 percent reduction in funding
    translates to significantly less money being available for on-the-
    ground reclamation.
        The benefits of the AML program are delivered almost entirely by
    the states. Each year they are responsible for the reclamation of
    hundreds of acres of abandoned coal mine areas along with the
    elimination of hazards to the public such as open edits and dangerous
    highwalls and the reduction or elimination of water pollution
    associated with acid mine drainage. It is incredibly difficult for a
    state to effectively manage a program under Title IV without the
    ability to rely on adequate, certain and consistent funding from year
    to year. Over the years we have seen the funding for state AML programs
    reduced while OSM's Title IV funding continues to increase. This is
    occurring at the same time that the states are assuming more and more
    responsibility for actual implementation of the program, including the
    emergency AML projects. We therefore urge the subcommittee to increase
    the state AML grants from the budgeted amount of $142.3 million to $220
    million (including a minimum of $2 million per state), which will allow
    the states to effectively and efficiently manage their programs and to
    accomplish the valuable work under those programs. Increased funding
    will also serve as a significant economic stimulant, generating
    hundreds of jobs associated with increased AML work. Affording states
    the flexibility to decide local priorities for all expenditures would
    be more efficient and more responsive to the needs of coal field
    citizens, whom the AML program is designed to serve.\2\
        You should know, Mr. Chairman, that in an effort to address the
    outstanding AML problem and adequate funding for state AML programs,
    the states have proposed a plan that would provide for the immediate
    allocation of the accumulated balance of over $1 billion in the AML
    Trust Fund. Under our plan, states would submit to OSM a ``Reclamation
    Management Plan'' that would define the specific results to be achieved
    and a time frame for achieving them. The plan would delegate a
    management role to the states regarding the Trust Fund and would
    require Congress to modify traditional annual budget appropriations in
    favor of multi-year funding based on states' requests in their
    Reclamation Management Plans. I am attaching a copy of this plan and
    would welcome the opportunity to discuss it with subcommittee staff. We
    will also be providing a copy of the Plan to the Senate Energy and
    Natural Resources Committee.
        OSM has proposed an amount of $11.2 million for technology
    development and transfer, which includes improving and expanding the
    services and technical systems provided to states. We wholeheartedly
    endorse this commitment by OSM to strengthening and enhancing state
    programs. In this regard, one of the most successful programs of
    technical support for the states undertaken by OSM is the development
    of the Technical Information Processing System (TIPS). This national
    computer system is operated by OSM for use by the states in carrying
    out their technical regulatory responsibilities under SMCRA. TIPS
    assists in making technical decisions associated with permit reviews;
    performing cumulative hydrologic impact assessments; quantifying
    potential effects of coal mining; quantifying revegetation success;
    assisting in the design of AML projects; and preparing environmental
    assessments and environmental impact statements. We are encouraged to
    see funding continued for TIPS.
        We also urge the subcommittee to continue its support of funding
    for state employees to attend OSM technical training sessions. As OSM
    has noted in the past, ``the most important product of the training
    program has been the steady improvement in the regulation and
    reclamation of surface coal mining. These successes have been largely
    due to the increase in staff technical knowledge, the improvement of
    relationships among Federal and State personnel, and the improvements
    in staff ability to make sound evaluations and decisions.'' Given state
    budget constraints, travel to OSM training sessions is impossible
    without federal funding. If OSM reduces funds for state travel, it is
    unlikely that states will be able to benefit from this much needed
    service.
        We are also hopeful that OSM, as part of its commitment to
    technical services, will support funding for the COALEX Legal Research
    System. Both the states and OSM have traditionally made use of this
    computerized legal research system on an almost daily basis. The system
    provides searches to yield complete and accurate data in minutes,
    thereby eliminating the need for staff to manually search through
    volumes of documents. As implementation of SMCRA becomes more and more
    complex, the need for COALEX has increased. The states, in particular,
    have become reliant on the system's ability to assist us with the
    implementation of our programs and to address the myriad compliance
    actions that attend enforcement of our programs.
        Finally, we urge continued funding of the Small Operators
    Assistance Program (SOAP). This program is critical to the permitting
    of remining operations by small operators, especially the costs
    associated with background water quality assessments, overburden
    analysis and Probable Hydrologic Consequences (PHC) predictions.
    Without financial assistance to undertake these expensive analyses,
    small operators will be unable to submit quality permit packages for
    potential remining operations. This will, in turn, result in additional
    burdens on state and federal AML program funds as remining operations
    will be unavailable to correct problems that currently are on the AML
    inventory. In this regard, SOAP often serves as an incentive to
    encourage the remediation of AMLs through active remining operations,
    thereby reserving AML moneys for more critical problem areas.
        Thank you for the opportunity to present these views on OSM's
    proposed fiscal year 1998 budget. I would be happy to answer any
    questions that you may have.
                                   footnotes
        \1\ As another rationale for the $500,000 decrease in state Title V
    grant funding from fiscal year 1997 to fiscal year 1998, OSM states
    that the decrease reflects ``anticipated cost savings as States adopt
    the state counterpart to OSM's November 1994 rule on inspection
    frequency.'' Again, OSM provides no specific data to support this
    justification for decreased state funding. Our experience, however,
    tells us that the number of inspections being conducted by the states
    is not expected to decrease significantly because of the inactive and
    abandoned sites rule. In general, reducing the number of required
    inspections does not directly reduce the number of inspectors or grant
    monies needed to support effective inspection and enforcement.
        \2\ 2We should note that the $142.3 million requested by OSM for
    Title IV state grants includes $5 million which has been allocated for
    the Appalachian Clean Streams Initiative (ACSI). This translates to a
    total request of only $137.3 million for state AML grants funding.
    Although we recognize that at least some portion of the $5 million ACSI
    funding will be allocated to the states, the overall trend in state AML
    grant funding is declining once again to unhealthy and unacceptable
    levels.
                                     ______

    Prepared Statement of Bruce Runnels, Chief Conservation Officer of the
                               Nature Conservancy

        Mr. Chairman and members of the subcommittee, thank you for the
    opportunity to submit The Nature Conservancy's thoughts on fiscal year
    1998 appropriations for the Land and Water Conservation Fund and other
    conservation programs under your jurisdiction.
        The Nature Conservancy is an international, non-profit land
    conservation organization dedicated to the long-term preservation of
    biological diversity.\1\ The premise that underlies our work is that in
    order to safeguard imperiled species, we must protect their habitats.
    This is the rationale behind our traditional conservation strategy of
    purchasing and managing lands that are home to rare plants and animals.
    Although this strategy has been largely undertaken through private
    action rather than through political means, the Federal Government has
    been an important partner in working to achieve conservation.
    ---------------------------------------------------------------------------
        \1\ For more than 45 years we have implemented our mission by
    focusing on local, on-the-ground conservation, utilizing the best
    available science, market forces, and partnerships with people and
    groups across the political spectrum. We currently have conservation
    programs in all 50 States and 17 other nations. The Conservancy has
    more than 900,000 individual members and over 1,385 corporate sponsors.
    Our Board of Governors includes renowned scientists such as E. O.
    Wilson and Dan Simberloff; distinguished leaders such as General Norman
    Schwarzkopf and former Deputy Secretary of State John C. Whitehead; and
    corporate officers from major U.S. companies such as John G. Smale of
    Procter & Gamble and Samuel C. Johnson of S.C. Johnson & Son.
    ---------------------------------------------------------------------------
        Successful conservation of biological diversity must be based on
    understanding ecosystems and conserving the critical occurrences of
    biological diversity supported by them as priorities for our attention.
    The Nature Conservancy is scientifically identifying and developing
    strategies to protect priority sites within ecoregions, or large area
    landscapes delineated by biotic factors rather than political
    boundaries. We are aware that most Federal land management agencies are
    also now committed to an ecosystem-based approach. This committee
    should encourage and strengthen this trend through investments in
    acquisition of exemplary high priority ecological sites and leveraging
    conservation dollars through partnerships with other levels of
    government, private landowners, industry and private organizations.
                           acquisition and management
        The Nature Conservancy believes that continued selective
    acquisition of land by the Federal Government is vital if we are to
    ensure that representative pieces of our nation's natural heritage are
    preserved for future generations. Often, the only thing standing in the
    way of species extinction is the purchase of critical habitat, and at
    times the Federal Government is the most appropriate purchaser. It is
    the quality of Federal lands, not the quantity, that is important.
        Land Acquisition.--The Nature Conservancy appreciates this
    committee's past support for the Land and Water Conservation Fund. We
    recognize that in moving government toward a balanced budget, funding
    levels for the LWCF are under increasing pressure, making the
    identification of the ``best'' parcels even more important. Thus, we
    are highlighting several biologically significant projects about which
    have substantial knowledge. This year, these projects total $51.1
    million. We have provided detailed information and discussed most of
    these with committee staff.
    U.S. Fish and Wildlife Service:
        Amagansett NWR (Shadmoor), NY.............................$2,000,000
        Balcones Canyonlands NWR, TX.............................. 4,700,000
        Black River, WA........................................... 1,500,000
        Bon Secour, AL............................................ 3,000,000
        Cape May NWR, NJ.......................................... 3,000,000
        Clarks River NWR, KY...................................... 3,000,000
        Cypress Creek NWR, IL..................................... 2,000,000
        Emiquon NWR, IL........................................... 1,000,000
        Rappahannock River, VA.................................... 2,400,000
        San Diego NWR, CA......................................... 3,000,000
        Stewart B. McKinney NWR, CT............................... 3,600,000
                        --------------------------------------------------------------
                        ____________________________________________________

          Subtotal................................................29,200,000
                        ==============================================================
                        ____________________________________________________
    Bureau of Land Management:
        Otay Mountain/Kuchamaa, CA................................ 1,000,000
        Santa Rosa Mountains, CA.................................. 1,000,000
        Western Riverside HCP, CA................................. 1,000,000
                        --------------------------------------------------------------
                        ____________________________________________________

          Subtotal................................................ 3,000,000
                        ==============================================================
                        ____________________________________________________
    U.S. Forest Service:
        Daniel Boone NF, KY....................................... 2,000,000
        Fodderstack Mountains, NC................................. 1,000,000
                        --------------------------------------------------------------
                        ____________________________________________________

          Subtotal................................................ 3,000,000
                        ==============================================================
                        ____________________________________________________
    National Park Service:
        Cumberland Island, GA..................................... 6,400,000
        Salt River, USVI.......................................... 1,000,000
        Sterling Forest, NY/NJ.................................... 8,500,000
                        --------------------------------------------------------------
                        ____________________________________________________

          Subtotal................................................15,900,000
                        ==============================================================
                        ____________________________________________________
          Total acquisition through LWCF..........................51,100,000

        Stewardship of Public Lands.--A critical component of Federal land
    acquisition is funding for management of those lands. Without active
    management, many of the biological resources we are seeking to protect
    cannot thrive. Some habitats require prescribed burns to maintain
    vegetative diversity, and others require stringent programs for the
    management of exotic species. The Nature Conservancy supports the
    fiscal year 1998 budget requests of the public land management agencies
    for management and stewardship activities. For example, the Bureau of
    Land Management has included in its budget proposal $1.0 million for
    prescribed fire operations and $1.0 million for the prevention and
    control of invasive weed species. Although more funding is needed, this
    is a step in the right direction.
        Land Exchanges.--While continuing to acquire biologically
    significant lands, The Nature Conservancy believes that the Federal
    Government should look for ways to divest itself, through transfers,
    exchanges or outright sales, of Federal lands having little or no
    important ecological function. The Conservancy has a good deal of
    experience with, and is supportive of, land exchanges as a mechanism
    for the acquisition of lands of high biological diversity. We are
    interested in finding ways to make the process less complicated and
    expensive.
        Regional Conservation Initiatives.--The following initiatives are
    setting the standard for regional approaches as they are already
    operating under a regional framework to address their respective
    conservation challenges.
        Natural Community Conservation Plan (NCCP), California.--NCCP is an
    unprecedented partnership among business, conservationists, local
    governments and State and Federal wildlife agencies. In 1991, Governor
    Pete Wilson urged the California legislature to pass the NCCP Act which
    called for the development of comprehensive conservation plans that
    identified key areas for endangered species protection while allowing
    economic growth in other areas. The regional plan covers 6,000 square
    miles and involves five counties, fifty-nine local government
    jurisdictions, and scores of private landowners. The private sector,
    local governments, and the State of California have contributed
    millions of dollars to date to this project--they must be matched by a
    continued strong Federal partnership to fulfill the promise of NCCP.
    The Conservancy supports the Administration's requests for a number of
    NCCP-related programs. For land acquisition, we support $3.0 million
    for the San Diego Refuge; $1.0 million for Otay Mountain/Kuchamaa Area;
    $1.0 million for Western Riverside County; and $1.0 million for Santa
    Rosa Mountains. In the USFWS's Endangered Species program, we support
    $2.0 million in the consultation subactivity for NCCP planning and $6.0
    million in the Cooperative Endangered Species Fund for grants to States
    for land acquisition in support of efforts like NCCP.
        Florida Everglades.--The Florida Everglades are one of the world's
    unique natural systems, originally supporting a remarkable quantity and
    diversity of plant and animal life. The system has now been reduced to
    half its original size by the draining and diversion of water, and the
    remaining Everglades are suffering acute ecological problems. The
    Administration's fiscal year 1998 budget proposes a major investment in
    Everglades restoration, including the establishment within the
    Department of Interior of an Everglades Restoration Fund in the amount
    of $400 million spread over four years to support the most critical
    elements of Everglades watershed restoration. Funding of $100 million
    ($76 million for land acquisition; $12 million for modified water
    deliveries; $12 million for scientific research) is requested by the
    Interior Department for fiscal year 1998 and strongly supported by The
    Nature Conservancy. This money is essential to acquire sufficient land
    for water storage and treatment to save the Everglades. Continuing
    research funds are needed to ensure that solutions are cost-effective.
        California Bay-Delta.--The California Bay-Delta is the largest
    estuary on the west coast, providing habitat for 120 aquatic and
    terrestrial species and supplying water for much of California. In
    September 1996, the President signed the California Bay-Delta
    Environmental Enhancement Act, authorizing $143.3 million per year in
    Federal funding for restoration activities in 1998, 1999, and 2000. The
    Administration's fiscal year 1998 budget includes this request and
    proposes to locate the $143.3 million in an account within the Bureau
    of Reclamation, to be allocated later to participating agencies by
    CALFED, a consortium of ten Federal and State agencies. In addition,
    the request includes $59.5 million for ongoing programs in the Fish and
    Wildlife Service, Bureau of Reclamation, and the USGS. The Nature
    Conservancy is an active participant in the Bay-Delta program and
    strongly supports the budget request.
                          key partnership initiatives
        One of the best conservation investments the Federal government can
    make is to be a partner to other entities, both private and public,
    that are working to achieve like-minded goals. In this way, scarce
    resources can be leveraged to increase the total amount of funds
    available for conservation activities. Within any given ecosystem,
    lands may be owned and managed by any combination of Federal, State, or
    local government, private landowners, industry and conservation groups.
    The Federal Government can be a leading partner in facilitating
    conservation in this context. We recommend that the committee continue
    to fund and promote the following programs and initiatives that are
    excellent examples of partnerships that leverage both private and
    public resources for conservation activities.
        National Fish and Wildlife Foundation.--The National Fish and
    Wildlife Foundation [NFWF] is an excellent example of a Federal program
    that effectively leverages conservation benefits. The Foundation builds
    partnerships between the public and private sectors to support
    activities that are focused on solving environmental problems, and has
    an outstanding record of encouraging and rewarding innovation in
    natural resource management. NFWF consistently exceeds a 2:1 private
    match for every dollar received in appropriated Federal money, making
    scarce Federal dollars achieve results two to three times greater than
    otherwise possible. Over the last decade, it has leveraged
    approximately $43 million of Federal funds into $152 million through
    privately matched challenge grants. The Administration has proposed a
    level of $5.0 million for this program in fiscal year 1998, the same
    level as was enacted last year. We believe NFWF merits at least this
    level of funding to continue to forge innovative partnerships and
    leverage limited Federal resources.
        North American Wetlands Conservation Fund.--The North American
    Wetlands Conservation Fund supports an international grant program
    authorized under the North American Wetlands Conservation Act. A
    variety of partners in Canada, Mexico, and the United States have
    contributed millions of dollars to acquire, restore, and enhance
    wetlands to conserve intrinsic wetlands functions, including providing
    habitat for migratory birds, endangered species, and other wetlands-
    dependent wildlife. Private partners contribute more than two dollars
    for every Federal dollar, also leveraging scarce resources for
    conservation. As a member of the North American Wetlands Conservation
    Council since its inception in 1989, The Nature Conservancy has been
    part of the panel that recommends projects for final approval by the
    Migratory Bird Conservation Commission. The Administration has proposed
    to increase the funding available for this program by $5.25 million, to
    just over $15 million. The Conservancy strongly supports this high-
    leverage increase.
        Incentives for Private Landowners and Habitat Conservation Plans.--
    The Nature Conservancy also supports a number of Federal programs that
    have been successful in creating conservation opportunities for private
    landowners and conservation organizations. Private lands are critical
    in achieving the goals of resource protection, as many rare ecological
    systems and species exist only on private lands or are affected by
    activities on such lands. Often, private landowners are willing to take
    voluntary measures to protect habitat on their lands if some incentives
    are available, and Federal agency programs such as USFWS's Partners for
    Wildlife and the Forest Service's Forest Stewardship and Stewardship
    Incentive Programs can provide that incentive. The Administration's
    fiscal year 1998 request for the Endangered Species Act includes
    funding for improving species conservation on private lands. Of the $78
    million total requested, $4.9 million is to support State and private
    partnership efforts that will keep candidate species off the endangered
    list. In addition, much of the $8.6 million increase for consultation
    will be used to provide technical assistance to private landowners
    developing Habitat Conservation Plans. Last year, the Cooperative
    Endangered Species Fund included a pilot program of grants-to-States
    for land acquisition related to large-scale HCPs. These funds have been
    in high demand, and the Administration has again included $6.0 million
    in its budget to continue this program. The Conservancy strongly
    supports this example of a Federal program that encourages partnership
    initiatives on the ground.
                                     ______

      Prepared Statement of Hon. Jim Geringer, Governor, State of Wyoming

        This testimony supports the President's Recommended fiscal year
    1998 Budget relative to funding for the Bureau of Land Management [BLM]
    to accomplish Colorado River Basin Salinity Control activities
        This testimony supports fiscal year 1998 funding for the Bureau of
    Land Management [BLM] to carry out Colorado River Basin salinity
    control activities. You will soon receive testimony from the Colorado
    River Basin Salinity Control Forum [Forum] on behalf of the seven
    Colorado River Basin States that is being submitted by the Forum's
    Executive Director, Jack Barnett. The State of Wyoming concurs in the
    fiscal year 1998 funding request and justification statements for BLM
    funding 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. 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 most recently in October, 1996 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 and after conferring with BLM
    agency officials, the Council recommends that the BLM expend $4,500,000
    in fiscal year 1998 to accomplish activities that BLM either has
    underway or should initiate in order to further control the
    concentrations of salinity of the Colorado River.
        It is particularly important that the BLM's line-item for
    Management of Lands and Renewable Resources be adequately funded.
    Section 203(b) of the Colorado River Basin Salinity Control Act as
    amended directs the Secretary of the Interior to develop a
    comprehensive program for minimizing salt contributions to the Colorado
    River from lands administered by the Bureau of Land Management. This is
    both important and appropriate because the BLM is the largest manager
    of land in the Colorado River Basin (53 million acres of public lands
    in the Colorado River Basin above Yuma, Arizona) and because salt
    loading reductions on BLM-managed rangelands can be done more
    economically than some of the methods available to and projects being
    implemented by the Bureau of Reclamation and the Department of
    Agriculture.
        The Council and Forum recognize the major role that the Bureau of
    Land Management can have in the Colorado River Basin salinity control
    effort if more attention, effort and focus by the BLM is brought to
    bear on controlling salt discharges from the federal lands it manages.
    Great opportunity exists to decrease salt loading from BLM-managed
    lands to the river system. The Secretary of the Interior is directed by
    the Colorado River Basin Salinity Control Act to give preference to
    those salinity control efforts which reduce salinity at the least cost
    per unit of salinity reduction, e.g. in the most cost-effective manner.
    The Forum and Council have aggressively urged, and will continue to
    encourage, the BLM to identify, plan and develop additional projects
    that will remove, or prevent the loading of, a greater tonnage of salts
    from the River system.
        The State of Wyoming wishes to emphasize the statement found in the
    Forum's testimony that while we are not opposed to BLM's budgetary
    process of focusing on ecosystem and watershed management, it remains
    essential that the expenditure of funds be directed to specific sub-
    activities and that the accounting for expenditures be done in such a
    manner that monitoring can take place on how the funds were used, what
    resources were benefitted and which natural resource concerns
    addressed. Wyoming and the other member states of the Forum have been
    frustrated by BLM's approach of identifying where funds are allocated
    as opposed to what purposes or how they are used to accomplish specific
    activities, objectives and benefits. The same difficulty exists with
    regard to accounting for how allocated funds have been expended. The
    BLM is simply unable at the present time to indicate how much money it
    is spending or where it is being spent to achieve salinity control
    benefits. For this reason, the Forum expressed in its testimony a
    strong desire to have the Congress direct the BLM to implement or
    modify its existing accounting practices to enable the Basin States to
    understand how much money this agency is allocating, and what results
    are being obtained, in carrying out its mandate for implementing a
    comprehensive program to minimize salt contributions from lands it
    administers.
        Again, on behalf of the State of Wyoming, I wish to express our
    concurrence with the testimony that is being submitted by the Colorado
    River Basin Salinity Control Forum. Thank you for the opportunity to
    submit and for your consideration of this statement, and I would
    request that you make it a part of the formal hearing record on fiscal
    year 1998 appropriations for the Bureau of Land Management.
                                     ______

       Prepared Statement of Alice Kilham, Co-Chair, Upper Klamath Basin
                                 Working Group

        An innovative, results oriented approach to resolution of natural
    resource issues began in Oregon in 1995. The Upper Klamath Working
    Group, a community consensus group, is now seeking the support of
    Congress for the appropriation of funding for implementation of
    ecosystem restoration efforts in fiscal year 1998. By funding these
    projects, National pilots will be created that model not only
    cooperation among former competing interests, but demonstrate new ways
    to accomplish protection of National natural resource treasures while
    respecting economic and social needs.
        March 5, 1997, the Upper Klamath Basin Working Group reached
    consensus and identified restoration projects for implementation under
    the $1,000,000 authorized annually under the Oregon Resource
    Conservation Act of 1996 (H.R. 3610). These projects will be matched
    through partnerships which will double the benefits received beyond the
    federal funding. The following are the projects that have been
    identified and benefits expected:
        1. Restoration of the springs in Sprague and Williamson river
    systems, proposed by the Klamath Indian Tribes, $160,000. Restoration
    of the springs will provide improved water quality for endangered
    suckers and they are critical water sources during summer months for
    stream and river flows. This effort will benefit not only the immediate
    springs and tributaries but will benefit the entire watershed area
    including downstream salmon through improved water quality. Federal
    funds could be administered through the Fish and Wildlife Service's
    Partners Program or Endangered Species Recovery Program. The match will
    be provided by the Klamath Tribes.
        2. Pilot field trials to identify alternate pest control methods to
    be implemented in the Integrated Pest Management Plan on Tule Lake and
    Lower Klamath National Wildlife Refuges, proposed by New Horizons
    Technology, contractor to the U.S. Fish and Wildlife Service, $30,000.
    The results of these field trials will provide national leadership in
    implementation of lease land farming on National Wildlife Refuges.
    Federal funding could be distributed through the Bureau of
    Reclamation's Sump Rotation Account. The Klamath Basin Ecosystem
    Foundation would provide the match.
        3. Development of a juniper management program, proposed by Oregon
    Department of Fish and Wildlife & Klamath County Soil and Water
    Conservation District, $100,000. Implementation of a program to
    integrate Best Management Conservation Practices within the juniper
    woodland zone for juniper treatment, livestock grazing, road
    management, prescribed fire, and noxious weed control--all management
    actions that can improve watershed conditions. Furthermore, these
    practices will be applicable to Oregon's 2.2 million acres of juniper
    woodlands. Federal funds could be administered through Department of
    Agriculture's Natural Resources Conservation Service. The match will be
    provided by Klamath County Soil and Water Conservation District,
    landowners, and Oregon Department of Fish and Wildlife.
        4. Riparian fencing and wetland restoration at various locations,
    proposed by Ducks Unlimited Western Regional Office, Rancho Cordova,
    CA, $150,000. This partnership will contribute to the on-going
    restoration to benefit water quality and habitat while stabilizing the
    economy. Federal funds could be administered through the Fish and
    Wildlife Service's Partners program or Endangered Species Recovery
    Program. The match will be provided by Ducks Unlimited, landowners and
    California Department of Fish and Game.
        5. Riparian protection and stream structures on three parcels of
    private lands, proposed by Klamath Soil and Water Conservation
    Districts, $243,350. This partnership would open up a multitude of
    private lands for future restoration and ultimate resolution of
    ecosystem restoration needs. The direct immediate benefits are in water
    quality, fish habitat and recovery of endangered suckers. Federal funds
    could be administered through Department of Agriculture's Natural
    Resources Conservation Service. The match will be provided by
    landowners and the Klamath County Soil & Water Conservation District.
        6. Wetland restoration on Sevenmile Creek, proposed by Water For
    Life, $200,000. This pilot project will demonstrate the ability to
    improve the water quality of agriculture return waters. Presently
    nutrient rich agriculture waters are returned directly to the waters of
    the basin untreated. Federal funds could be administered through the
    Fish and Wildlife Service's Partners Program or Recovery Program. The
    match will be provided by private landowners.
        7. Support for Geographic Information System center at Oregon
    Institute of Technology, $123,000. OIT is willing to utilize its
    present space to meet a critical community need for GIS products,
    training and support. This funding would provide the match to OIT's
    contribution to allow for the acquisition of hardware and software to
    meet this need. This proposal is developed as a cooperative with
    Southern Oregon State University and Humboldt State College in
    California. Benefactors would be local resource agencies, businesses,
    agriculture community and individuals that are in need of accessing
    this information. The Department of Health Education and Welfare could
    be a vehicle to transmit funds. OIT will provide the match.
        8. Implement bull trout restoration strategy and install fish
    barrier to protect bull trout in Sun Creek, proposed by Bull Trout
    Working Group, $70,000. The status of bull trout in the basin is at a
    critical point. Listing as endangered or threatened is possible. A
    Basin strategy needs to be developed to provide direction for work
    ongoing and for future restoration actions. The Bull Trout Working
    Group has provided the leadership to start this process and is a local
    consensus group. Immediate restoration needs to be implemented not only
    to avoid extinction, but also to help resolve the economic and social
    concerns that will result from the continued threat to the species.
    Specifically restoration would be centered on habitat issues that would
    protect existing population segments. Federal funds could be
    administered through the Fish and Wildlife Service's Partners Program
    or Pre-Listing. The match to be provided by Oregon Department of Fish
    and Wildlife, Trout Unlimited, U.S. Timber Lands, Klamath County Soil &
    Water Conservation District.
        The following two projects were also endorsed for funding through
    the Interior Department budget:
        1. $500,000 for the continuing restoration of the Wood River Ranch
    by BLM. This is an ongoing restoration project of 3,200 acres. This
    project would create critical nursery habitat for endangered suckers. A
    partnership between BLM, Oregon Trout, Klamath Tribes, private land
    owners and others provides the kind of community support that sets a
    precedent. This is a continuation of efforts started in fiscal year
    1996.
        2. $1,220,000 for the pilot project for Sump Rotation on the Tule
    Lake National Wildlife Refuge. This is the most innovative approach to
    provide for long-term co-existence between farming and wildlife
    interests on a National Wildlife Refuge system. The program as
    supported by the Working Group has agreement from the farming and
    conservation communities that solution has to be reached to allow these
    two activities to co-exist and prosper. The Refuge benefits to
    migratory waterfowl goes without question, but equally important is
    lease land farming that may be dependent on sump rotation of crops and
    wetlands for its future. The leasing program is an important national
    program generating about $2 million dollars to the national treasury
    each year in use fees. Funding could be through the Fish and Wildlife
    Service's Refuge Administrative Program.
        The Upper Klamath Basin Working Group continues to be supported by
    a wide range of differing interest, Klamath Tribes, Oregon Department
    of Fish and Wildlife, Agriculture, Grazing, Industry, City of Klamath
    Falls, County of Klamath Falls, Conservation Groups, Oregon State
    Governor's Office and Federal Agencies. There is coordination with the
    other Basin restoration entities including the Klamath River Fisheries
    Task Force, The Klamath River Compact Commission and the Trinity River
    Task Force.
        We respectfully request that you appropriate the $1 million, as
    authorized under the Oregon Resources Conservation Act of 1996, for the
    eight restoration projects identified above for implementation in the
    Upper Klamath Basin for fiscal year 1998 and provide additional funding
    to accomplish the Wood River wetlands restoration and sump rotation on
    the Tule Lake National Wildlife Refuge. These restoration efforts will
    provide solutions that can lead to recovery of the endangered suckers,
    down stream salmonids and prevent potential future resource problems.
    They will also help the AG community, the City and County, the Klamath
    Tribes, and the Lower Klamath River commercial interests and tribes.
        Background history: Senator Hatfield first established the Upper
    Klamath Basin Working Group as a volunteer group, the ``Hatfield
    Klamath Basin Working Group'', in early 1995 following a July 6, 1994,
    Senate Hearing in Klamath Falls. Testimony at the Senate Hearing
    demonstrated a strong desire and willingness by the local community to
    resolve its environment/economic issues at the Basin level. The Senator
    felt the local people were knowledgeable about the issues, that they
    were a lot closer to consensus than apart on the issues, and that they
    wanted an opportunity to resolve their own issues. He therefore
    appointed a group of 27 people representing public and private
    interests to serve on the Hatfield Klamath Basin Working Group.
        The Senator's charge to the Upper Klamath Basin Working Group was
    to review issues in the basin and provide to him recommended solutions.
    The Senator specifically requested that the Working Group address: 1.
    Ecosystem Restoration; 2. Economic Stability; and 3. Reducing Drought
    Impacts. The Working Group was asked to identify short term
    recommendations for fiscal year 1996 and long term recommendations for
    out years. The Senator asked the group to work through consensus. Each
    member was chosen because they represent a segment of the community and
    through their consensus actions would provide community support and
    agreement. The Senator then pledged his support to help implement what
    the Working Group developed.
        The Working Group first met April 6, 1995, developed ground rules
    for their consensus process, and on May 17, 1995 the Working Group
    developed six short term projects and sent them to the Senator for
    inclusion in the fiscal year 1996 Budget. From the recommendations the
    Senator obtained $3,500,000 under the Wetland Reserve Program for
    Tulana Farms and $725,000 was added to the Service's Klamath Falls Fish
    and wildlife Service Office for riparian restoration.
        Tulana Farms wetland restoration is one of the nation's largest
    restoration effort to restore a river delta. When completed the
    restoration will put back 4,700 acres of riparian and wetland habitat
    that will benefit the endangered Lost River and shortnose suckers and
    improve water quality and quantity in Upper Klamath Lake. During the
    restoration phase New Earth and PacifiCorp will operate 1100 acres of
    agricultural in holdings to demonstrate the compatibility of farming
    and ecosystem restoration.
        The Tulana restoration project and the riparian restoration effort
    have provided for the development of significant partnerships and
    consolidated efforts of many diverse groups. Included are: The Nature
    Conservancy, Oregon Trout, Water for Life, the Klamath Basin Water
    Users Association, The Klamath Tribes, PacifiCorp, New Earth, Oregon
    Department of Fish and Wildlife, The Natural Resources Conservation
    Service, The Bureau of Reclamation, The Bureau of Land Management, The
    Forest Service, The Fish and Wildlife Service, The National Fish and
    Wildlife Foundation, The County of Klamath, The City of Klamath Falls,
    The Friends of the Winema, The Klamath County Soil and Water
    Conservation District, Industry and interested citizens.
        The Working Group developed a second set of recommendations for the
    fiscal year 1997 Budget that resulted in an additional $5,500,000
    million for restoration of Tulana Farms, $500,000 for BLM wetland
    restoration of the Wood River Ranch and an additional $500,000 for
    restoration by the Klamath Falls Fish and Wildlife Service Office. This
    funding has continued the above partnerships which not only wouldn't
    have been possible two years ago, but which generated a synergy to take
    on projects which would have been beyond the abilities of any one
    group.
        In order to insure the continued restoration of the Upper Klamath
    Basin on a consensus basis Senator Hatfield and Congress in 1996
    created the Upper Klamath Basin Working Group as a pilot public
    advisory committee authorizing $1 million per year for five years. The
    federal funds were to be matched by other funding. This authorization
    was supported by Federal Agencies, and the Oregon Congressional Group.
    The Act also provided for a coordination and communication group to be
    made up of two members each of the Trinity River Task Force, the
    Klamath River Compact Commission, The Klamath Fisheries Task Force and
    the Upper Basin Working Group. That group has met as the Klamath
    Watershed Coordinating Group three times in the last three months, and
    is optimistic about the opportunity to bring the entire Klamath River
    Watershed into a working whole.
                                     ______

        Prepared Statement of Trygve Sletteland, Pacific Rivers Council

        We urge the 105th Congress to take the following steps through
    appropriations legislation to increase the accountability of the Forest
    Service and the Bureau of Land Management for the protection and
    restoration of watersheds which provide clean water and fish habitat to
    the citizens of the west.
        1. Prohibit new roadbuilding on the National Forests and Bureau of
    Land Management public lands by ending any appropriation for new roads
    and by prohibiting the use of purchaser road credits to build new
    roads.
        2. Target fire-prevention funds to those areas where increased fire
    hazard threatens lives and property.
        3. Target ecosystem restoration funds to those locations and
    activities which are likely to have the greatest ecological benefits.
    In many cases, this will mean funding for activities that remove
    existing threats to salmon and trout habitat and water quality.
        4. Prohibit logging and road-building on unstable and potentially
    unstable national forest land. Recent landslides in the West have amply
    demonstrated the ``hidden costs'' to public safety and the environment
    of subsidized logging and road building on steep, unstable slopes.
        5. Link accomplishment of ecological goals to managers' performance
    reviews.
        A brief explanation of our rationale for these requests is provided
    below.
    1. Eliminate roadbuilding subsidies and shift emphasis of roads program
            to obliteration
        We urge the Committee to consider the fiscal and ecological
    benefits of using the appropriations process to prohibit new
    roadbuilding on the National Forests and Bureau of Land Management
    public lands by authorizing zero funding for new roads and by
    prohibiting the use of purchaser road credits to build new roads. We
    note that the President has taken the first step in this direction by
    eliminating purchaser road credits from his budget. At least one half
    of savings should go to targeted road decommissioning projects and
    improvement work designed to address the highest priority risks in the
    most ecologically sensitive watersheds.
        The enduring ecological impacts of reading are many and well-known:
        ``Roads may have unavoidable effects on streams, no matter how well
    they are located, designed or maintained. Roads modify natural
    hillslope drainage networks and accelerate erosion processes. These
    changes can alter physical processes in streams, leading to changes in
    streamflow regimes, sediment transport and storage, channel bank and
    bed configurations, substrate composition, and stability of slopes
    adjacent to streams. These changes have significant biological
    consequences that affect virtually all components of stream
    ecosystems.'' (Federal Ecosystem Management Assessment Team 1993).
        A prohibition on new roadbuilding would implicitly recognize the
    critical need to protect existing unroaded areas. There is an
    overwhelming consensus among natural resource agencies and within the
    scientific community that existing roadless areas are of extremely high
    ecological value. The literature points clearly to at least two
    conclusions which have management implications: (1) roadless areas are
    critical because they are the only undisturbed habitats on an almost
    universally disturbed landscape. As such, they are the de facto refuges
    for numerous aquatic, riparian-dependent and terrestrial species; (2)
    the reasons that these areas are roadless (high elevation, steepness
    and erodibility) are precisely the same reasons that they should be
    protected from reading and other management impacts: in these areas the
    risks to stream habitats from disturbance are extremely high.
        Removing subsidies for roadbuilding also is fiscally responsible
    given that the land management agencies are far from meeting current
    road maintenance needs. Reducing road mileage will decrease road
    maintenance backlogs and, ultimately, permit reductions in agency work
    force.
        As Congress has directed in past years, roads funding should be
    shifted to obliteration and re-engineering which addresses the risks to
    key watersheds and healthy salmon habitat regionwide. Projects should
    be selected which have the greatest impact on factors limiting salmonid
    spawning, rearing and holding habitat including sediment input,
    riparian cover etc. ``Projects which will have the greatest long-term
    positive impact on watershed conditions should be favored over those
    with short-term benefits.'' (House Appropriations Report, June 24,
    1993).
    2. Target fire-prevention funds to those areas where increased fire
            hazard threatens lives and property
        We urge the Committee to provide guidance that carefully targets
    current timber salvage and thinning and other ``forest health''
    management efforts to focus our limited resources on the highest
    priority areas and while minimizing risks. These areas are those within
    the urban-wildland interface. Such targetting would be responsive to
    the desire to reduce the risks to life and property while
    simultaneously minimizing the risks forest health treatment could post
    to aquatic resources. This targeting is fully consistent with, and
    arguably required by, existing policies.
        For example, Agriculture Secretary Glickman's guidelines for last
    year's emergency salvage program directed that salvage sales be
    targeted to areas where forests * * * ``have high fuel loading or
    present a high fire risk and are near communities or occupied
    structures, such as homes * * *.'' Similarly, the interagency Federal
    Wildland Fire Management Final Report (USDA/USDI, December 16, 1995)
    reaffirmed protection of life and property as * * * ``the first
    priority in wildland fire management.'' This report clearly recognized
    that the key role for federal managers' in preventing fires in the
    intermix zone is to reduce fuel hazards affecting populated areas on
    the land they administer.
        The targeting we suggest is supported not only on the basis of
    human risks and values, but on purely ecological grounds as well. The
    conclusions of the blue-ribbon panel of scientists on the Aquatics Team
    of the Interior Columbia Basin Ecosystem Management Project support the
    need for extreme caution in subjecting ecologically sensitive
    watersheds to intensive fire-prevention treatments:
        ``Since past timber harvest activities have contributed to
    degradation in aquatic ecosystems, emphasis on timber harvest and
    thinning to restore more natural forests and fire regimes represents a
    risk of extending the problems of the past. * * * Attempts to minimize
    the risks of large fires by expanding timber harvest risk expanding
    well-established negative effects on aquatic systems. The perpetuation
    or expansion of existing road networks, and other activities might well
    erode the ability of [fish] populations to respond to the effects of
    fire as well as large storms and other disturbances that we cannot
    predict or control. (National Research Council, 1995).'' (Lee et. al.,
    1996, ``A Broadscale Assessment of Aquatic Species and Habitats'' pre-
    publication draft, Chapter VI).
        The Team's findings support an assumption that the ecological risks
    from vegetative manipulation to aquatic systems outweigh the benefits
    in relatively undisturbed (e.g. sparsely roaded) watersheds unless and
    until we have dependable information to the contrary:
        ``In our haste, forest-health treatment projects have been
    justified from all perspectives including the risk of extirpation for
    sensitive aquatic species. There is undoubtedly a point where the risk
    of fire outweighs the risk created by our management. Management
    creates risk of somewhat known magnitude, timing, and extent, whereas
    wildfire potential is less known in each of these respects. Therefore,
    that point needs to be discovered through careful evaluation and
    scientific study. * * * Risks of fire are likely most important for
    aquatic ecosystems that have been seriously degraded and fragmented.
    Watersheds that support healthy populations may be at greater risk
    through disruption of watershed processes and degradation of habitats
    caused by intensive management than through the effects of fire.''
    (emphasis added).
    3. Target ecosystem restoration funds to those locations and activities
            that are likely to have the greatest ecological benefits.
        There is a need for clear guidance to focus watershed restoration
    efforts on those activities that have the greatest known positive
    impact on watershed function and riparian and aquatic habitats. Signals
    now are conflicting, and may lead the agencies to undertake
    experimental vegetative management activities that have little or no
    effect in addressing the most pressing ecological problems. We urge the
    Committee to provide guidance that effectively targets funding for
    ecosystem restoration to those activities with the greatest ecological
    benefits. In most cases, these activities will be those intended to
    protect and restore areas with relatively high water quality,
    relatively healthy salmon and trout habitat and high value for both
    aquatic and terrestrial species.
        In much of the federally managed forested watersheds of the west,
    this kind of targeting will result in funding for road re-engineering,
    obliteration and culvert improvements. On federal rangelands, livestock
    enclosures and riparian revegetation may be the top priority.
        The overwhelming weight of evidence suggests that the highest
    priority for federal lands restoration management in the Northwest is
    addressing road-related threats to streams and native fisheries and
    slope stability. The results of the recent storms have demonstrated
    clearly that logging and associated roads have reduced the ability of
    forested areas to withstand heavy rains. Far too many of our last best
    habitats for salmon, bull trout and other native fish were decimated by
    road-related landslides during the fall and winter of this year. Sadly,
    much of the damage to water quality and fisheries could have been
    prevented by more aggressive implementation of watershed restoration
    programs that already are established under existing federal plans and
    policies. We call on the Committee to meet funding needs, but also to
    provide clear direction to ensure these needs are met.
    4. Permit natural recovery of watersheds by prohibiting logging and
            roadbuilding--particularly post-flood reconstruction--on
            unstable and potentially unstable national forest land. Recent
            landslides in the West have demonstrated the ``hidden costs''
            to public safety and the environment of subsidized logging and
            road building on steep, unstable slopes.
        The story is the same all over the Northwest: hillsides saturated
    with water are giving way, especially where they are weakened by roads
    and logging. In some watersheds, failures are occurring only because of
    roads. Pools and gravel bars, prime habitat for salmon and bull trout,
    are being filled with sediment. Stream channels are being scoured by
    debris torrents.
        In an ideal world, natural disturbances like these wouldn't pose
    any real threat to the survival of species like salmon and bull trout,
    because the effects of high runoff would not be as severe and there
    would be plenty of other habitat to cushion the blow. But today's
    landslides all are too often in some of the last remaining habitat of
    sufficient to sustain our ailing fisheries. There are places like
    Isabella Creek and the North Fork of the Clearwater River, which the
    Forest Service has recognized as ``priority watersheds'' for bull trout
    that are suffering as a result of logging and/or road induced flood
    damage.
        The message is clear: we have managed our lands to the point where
    even the last best places have been littered with time-bomb of our own
    making. In most cases, the bombs are clearcut hillsides and roads which
    have been poorly built and/or have been built in places where they nave
    should have been built at all.
        This committee has an opportunity to demonstrate that we have
    learned from what is happening. Roads exist on steep, unstable slopes,
    where the are sure to fail in heavy rains no matter how fancy the
    engineering. These roads, now blown, should not be rebuilt. Other
    roads, now flooded because of debris dams in streambeds, were built
    along valley bottoms. Instead of listening to the floods and letting
    them heal our rivers, the tendency is for land managers to go in and
    pull out woody debris to keep the channel out of the roadbed and to
    ensure bridge safety. (This was done by managers on the North Fork of
    the Boise River, where wood was removed to facilitate access to timber
    sale units.) In most cases, roads we are attempting to save through
    these measures are suffocating the stream by restriction it to a single
    channel, which prevents the creation of pools and off-channel habitat
    for fish and restricts its ability to handle future flood events. Many
    of these roads too, should not be rebuilt. This will mean that some
    timber sales cannot be harvested using conventional, and perhaps any,
    method, because they will be too expensive to access without roads. But
    the payoffs generated by a healthier watershed will be greater in the
    long run.
        The signals the earth is sending are unambiguous: we have used up
    our margin of safety. Given the high level of disturbance on the
    landscape, where even the most pristine of environments is threatened
    with road blowouts, the best option now is to stop kidding ourselves.
    Rather than trying to control natural disturbances, we should--wherever
    possible--let them play out. Just as forested ecosystems depend on fire
    to maintain their complexity and integrity, rivers depend on the
    irregular patterns of floods and droughts to maintain theirs.
    5. Make Managers Accountable for Meeting Ecological Objectives by
            Making them part of Performance Reviews of Line and Staff
            Officers.
        Performance measures needs to be adjusted to meaningfully reflect
    the accomplishment of ecological goals. If the line and staff officers
    have an incentive to meet goals that are related to the attainment of
    aquatic conservation and other objectives, the decision makers will be
    required to more carefully consider the recommendations of the resource
    experts within the agency.
        Last year's Logging Rider clearly demonstrated the Forest Service's
    lack of accountability: healthy, green forests were logged as ``salvage
    sales,'' water quality was endangered in the name of ``forest health,''
    and no record exists that any of the salvage sales sold under the rider
    generated funds for the U.S. Treasury or improved the ecological health
    of the watershed. As a result of the failure by the Forest Service to
    protect the full range of public lands values, both the ecological
    integrity of our forests and the interests of the taxpayers were
    sacrificed.
                                     ______

      Letter From J. Kevin Lackey, Conservation Programs Director, Rocky
                            Mountain Elk Foundation
                                          Missoula, MT, March 18, 1997.
    Hon. Slade Gorton,
    Chair, Senate Interior Appropriations Subcommittee, Senate Dirksen
            Office Building, Washington, DC.
        Dear Senator Gorton: The non-profit Rocky Mountain Elk Foundation
    (RMEF), a wildlife habitat conservation organization, was established
    in 1984 to ensure the future of elk, other wildlife and their habitat
    through cooperative conservation activities utilizing hundreds of
    government and non-government partnerships.
        The RMEF has efficiently operated with federal partners and would
    appreciate the Senate Interior Appropriations Subcommittee considering
    the following recommendations for the fiscal year 1998 budget:
                              u.s. forest service
        The USFS ``Elk Country'' initiative is part of the agency's
    Wildlife Habitat Management Program commonly known as ``Get Wild.'' The
    RMEF has cooperated with the USFS in this initiative to cumulatively
    accomplish over 685 USFS projects enhancing 806,811 acres of public
    lands. This project activity was completed with $3.2 million of RMEF
    funds and matched by $7.9 million of cooperator funds, including USFS
    and other contributions.
    Wildlife habitat management budget
        The President's fiscal year 1998 budget proposes $29.9 million for
    the USFS Wildlife Habitat Management Program. RMEF recommends an
    additional $10 million for a total of $40 million to accomplish a
    larger portion of the $54 million worth of habitat management
    opportunities identified in current forest plans for the Get Wild
    programs.
    Challenge cost share budget
        The USFS Challenge Cost Share Program (CCS) is a highly successful,
    popular and effective avenue to garner additional private funds for
    national forest fish and wildlife habitat improvement projects. As one
    of the earliest organizations to cooperate with the USFS in the CCS
    program, RMEF believes this program's effectiveness is becoming
    hampered by USFS budget reductions begun in fiscal year 1994. The
    budget decision to fund some operations and maintenance costs with
    wildlife habitat management dollars results in fewer CCS dollars
    available to match RMEF and other non-governmental organization dollars
    for actual ``on the ground'' projects. RMEF encourages the committee to
    appropriate $8 million of the additional recommended $10.1 million to
    the CCS program for the USFS's wildlife habitat management program in
    fiscal year 1998, thereby maintaining the momentum, efficiency and
    popularity this program currently enjoys. The RMEF also recommends the
    committee specify CCS funds be exclusively utilized for ``on the
    ground'' cooperative project activities and not for USFS administrative
    purposes.
    Seeking common ground initiative
        The Seeking Common Ground Initiative (SCG) is a successful national
    partnership effort addressing livestock/big game interaction on western
    rangelands. This endeavor is comprised of the RMEF, USFS, BLM,
    International Association of Fish and Wildlife Agencies, National Fish
    and Wildlife Foundation, American Farm Bureau Federation, National
    Cattleman's Association, Public Lands Council, National Rifle
    Association and the Wildlife Management Institute. The SCG goals are as
    follows:
        1. Improve public and private rangeland condition.
        2. Promote individual stewardship that improves rangeland
    resources.
        3. Improve communications among rangeland users.
        4. Reduce real and perceived habitat conflict between wildlife and
    livestock.
        5. Encourage problem-solving at the local level.
        This program has more potential to advance positive action
    affecting public and private rangelands than any other activity today
    because of the program's emphasis on cooperative action to achieve
    mutually shared goals. RMEF supports the committee providing $250,000
    designated specifically to this program in fiscal year 1998. These
    additional funds would be leveraged to obtain matching funds from other
    private partners, thereby financing expanded activities including SCG
    national demonstration projects. The appropriated funding would best
    serve the SCG program if one-half ($125,000) of the funds were
    allocated to the USFS fish and wildlife program and one-half ($125,000)
    to the range program.
                           bureau of land management
        The BLM has been a much more active partner with RMEF as a result
    of what we recognize as increased attention to fish and wildlife
    programs on public lands. An increased effort on behalf of the agency
    to fund additional wildlife habitat work on its 270 million acres would
    be in line with today's demands for increased wildlife and related
    recreation on public demands. To date, RMEF has contributed $1.1
    million to 206 projects on BLM lands, enhancing 170,912 acres of
    wildlife habitat under BLM jurisdiction.
    National Fish and Wildlife Management budget
        Fish and wildlife habitat management within the BLM is proposed to
    receive a fiscal year 1998 appropriation of $27.7 million. Although
    this amount is an increase over fiscal year 1997 the RMEF would
    encourage the committee appropriate a fiscal year 1998 total of $30
    million for fisheries ($1.15 million additional) and wildlife ($1.15
    million additional) programs to promote habitat work on BLM lands
    identified in the agency's Fish and Wildlife 2000 strategic planning
    document.
    Seeking common ground initiative
        The RMEF also encourages the committee to appropriate to the BLM
    over and above the $30 million an additional $250,000 for the Seeking
    Common Ground effort mentioned above. As a full SCG partner the BLM
    would utilize the funds to secure additional private matching funds for
    the restoration and enhancement of wildlife and livestock habitat on
    public lands. RMEF would suggest the funds be evenly divided between
    the BLM's range and wildlife programs, thereby emphasizing the
    cooperation necessary to continue the program's success.
                         u.s. fish and wildlife service
        RMEF strongly supports a $200 million fiscal year 1998 budget for
    refuge operation and maintenance. RMEF's opportunity to form additional
    partnerships with the USFWS, particularly in those areas of high public
    interest such as the National Elk Refuge in Jackson, Wyoming; can be
    greatly enhanced by the USFWS investing in modern public information/
    education and refuge management facilities.
                     national fish and wildlife foundation
        RMEF recommends the committee provide fiscal year 1998 National
    Fish and Wildlife Foundation (NFWF) funding at $10 million as follows:
    USES: $1.5 million; BLM: $1.5 million; USFWS: $7.0 million). NFWF has
    become RMEF's leading project cooperator by providing over $530,000 in
    matching funds for wildlife habitat conservation. NFWF's aggressive
    matching funds requirements focuses private sector fundraising efforts
    for many organizations and has resulted in effective utilization of the
    appropriated federal dollars. NFWF's effectiveness is key to its
    partner's successes and this formula should be expanded through
    increased funding.
        On behalf of its over 100,000 members, the Rocky Mountain Elk
    Foundation appreciates this opportunity to provide comment to the
    appropriations subcommittee. Thank you for your support.
                Sincerely,
                                               J. Kevin Lackey,
                                        Conservation Programs Director.
                                     ______

     Letter From Warren T. Doolittle, President, International Society of
                            Tropical Foresters, Inc.
                                           Bethesda, MD, March 5, 1997.
    Hon. Slade Gorton,
    Chair, Senate Appropriations Subcommittee on Interior and Related
            Agencies, U.S. Senate, Washington, DC.
        Dear Senator Gorton: As a former Associate Deputy Chief for Forest
    Service Research during the 1970's, I am deeply concerned with the
    Forest Service research budget for 1998. The reduction of line items in
    the budget from four to one line item makes it especially difficult to
    focus on and follow the diverse segments of the overall research
    program. And, the reduction of funding from $193,509,000 for 1995 down
    to the President's budget of $179,786,000 for 1998 is especially
    detrimental to the program. The trend of these reductions has resulted
    in the loss of many important projects and valuable scientists.
        The reductions in funds and in scientists come at a very critical
    time in the need for providing the scientific information and
    technology essential to the protection, management, use, and
    sustainability of the nations 1.6 billion acres of forests and
    rangelands. With the new direction of the Forest Service and other land
    managers to manage natural resources according to the principles of
    ecosystem management, there is urgency to move ahead promptly with a
    blend of new basic research and a continuation of older long-term
    research to meet the needs of people at both the local and national
    levels in providing forest products, diversity, and recreation--with
    sustainably managed forests.
        Forest Service Research describes its program under four broad
    areas:
        1. Vegetation management and protection;
        2. Wildlife, fish, water, and air sciences;
        3. Resource valuation and use;
        4. Forest resources inventory and monitoring.
        The reduction in funding especially hurts the research efforts in
    the first three areas above. Research had 708 scientists in 1985, and
    since that time there has been a gradual attrition of budgets and
    scientists--down to 548 scientists with the proposed President's
    budget. These incremental reductions have resulted in drastic losses of
    key scientists and valuable, long-term research in the so called
    foundation areas--which often require many years for forests to respond
    to experimentation.
        In summary, the research efforts of the Forest Service are going
    down exactly at a time when they should be going up. I implore you to
    reconsider the reductions being made in the research budgets, and
    restore the programs to a level of at least $200 million.
        Please let me know if I can be of any further assistance on Forest
    Service research.
                Sincerely,
                                           Warren T. Doolittle,
                                                             President.
                                     ______

     Letter From Warren T. Doolittle, President, International Society of
                            Tropical Foresters, Inc.
                                           Bethesda, MD, March 5, 1997.
    Hon. Slade Gorton,
    Chair, Senate Appropriations Subcommittee on Interior and Related
            Agencies, U.S. Senate, Washington, DC.
        Dear Senator Gorton: I am writing this letter to you because of my
    deep concern for the international program in the USDA Forest Service.
    My name is Warren T. Doolittle--the elected President of the
    International Society of Tropical Foresters, Inc. [ISTF].
                               background on istf
        ISTF was first organized in 1950 and chartered as a--nonprofit
    scientific society of Washington, D.C., in 1979. ISTF is committed to
    the management, protection, and wise use of the world's tropical
    forests. This commitment is carried out through a network of about 2000
    members in 115 countries--including the tropical, developing counties
    and most developed countries.
        ISTF publishes a quarterly newsletter in English, Spanish, and
    French; publishes an annual Membership Directory; distributes
    publications on tropical forests; sponsors workshops and symposia;
    organizes chapters of ISTF; and generally serves as a source of
    information for ISTF members.
                            tropical forest research
        Over the years, the Forest Service has carried out a modest program
    in tropical forest research with funding included as part of the
    regular research budget with programs for the International Institute
    of Tropical Forestry in Rio Piedras, Puerto Rico; the Institute of
    Pacific Island Forestry in Honolulu, Hawaii; and the Forest Products
    Laboratory in Madison, Wisconsin.
        The research budget for the International Institute of Tropical
    Forestry in Puerto Rico was $3,116,000 in 1995. However, the
    President's budget for 1998 is $2,797,000. This level of funding means
    that research on the social and economic values of tropical forestry
    and on non-traditional forest products will not be continued. And, only
    the more critical issues of ecosystem management, reforestation of
    degraded lands, natural regeneration, and management of secondary
    forests will be pursued with a lesser capability.
        The research budget for the Institute of Pacific Island Forestry in
    Hawaii was $1,667,000 in 1995. And, the President's budget for 1998 is
    $1,650,000. However, for 1997, the Washington office (Research)
    provided another $629,000 (for one year only) to bring the total 1997
    budget to $2,100,000. This enabled the Institute to move ahead with
    research on the restoration and management of tropical forests in
    Hawaii and the Pacific region. It is important that the 1997 level be
    maintained in the budget for 1998.
        The Forest Products Laboratory budget for research in the tropics
    was $925,000 in 1995; it was reduced to $635,000 in the President's
    budges for 1998. This downward spiral in budgeting means that critical
    progress being made on the utilization of lesser known tropical
    hardwoods and work on lumber grades for these species will be greatly
    slowed.
        I recommend that Congress restore the regular international
    forestry budgets of the two institutes and the Forest Products
    Laboratory to the fiscal year 1995 level.
                      international forestry (nonresearch)
        The International Forestry (nonresearch) line item budget for 1995
    was $7,000,000 and the President's budget for 1996 was $10,000,000.
    However, Congressional recisions made in 1995 reduced the $7,000,000
    figure down to $5,000,000, and the line item for 1996 and 1997 was
    zeroed. In place of the line item budget an agreement was reached that
    the Forest Service could spend up to $3,000,000 in 1997 and 1998 from
    the overall Forest Service budget.
        This reduction in budget for international activities could not
    have come at a worse time for forestry. Globally, and especially in the
    tropics, forests are being depleted at an unprecedented rate, and there
    is a great need for solid leadership and demonstration in forestry.
        There is currently a worldwide effort by members of the
    environment, industry, and governments to come up with guidelines and
    assistance to provide sustained management for the world's forests. The
    Forest Service had built up a competent staff and forward looking
    program to face the multiple facets of sustained management; product
    certification; and cooperative research and technical efforts in
    meeting the challenges in forestry. However, Forest Service
    participation has been crippled and reduced at this critical juncture
    of time. Meanwhile environmentalists and others are moving ahead with
    planning and assistance that the Forest Service cannot match with a
    $3,000,000 budget.
        The world's forests provide wood and non-wood products, soil and
    water protection, biodiversity, and sequestration of carbon dioxide as
    a deterrent to global warming. This is no time for the United States to
    allow other interests make critical decisions on forestry.
        I strongly recommend that Congress restore the $7,000,000 budget
    level of 1995--and if possible even raise it to the earlier proposed
    1996 level of $10,000,000.
        Please let me know if I can provide any further information on
    international forestry.
                Sincerely,
                                           Warren T. Doolittle,
                                                        ISTF President.
                                     ______

     Prepared Statement of Andrea L. Colnes, Director, the Northern Forest
                                    Alliance

        Mr. Chairman and members of the Subcommittee, I want to thank you
    for taking testimony on the fiscal year 1998 budget request for natural
    resource programs under your jurisdiction. I am Andrea Colnes, Director
    of the Northern Forest Alliance, a coalition of more than 30 State,
    regional and national organizations representing more than one million
    members who have come together to promote strategies for the protection
    and stewardship of more than 26 million acres of some of America's most
    significant forests across the northern tier of New York, Vermont, New
    Hampshire and Maine.
        This is by far the largest remaining wild forest in the East, and
    is an incomparable natural resource for the people of the region and
    the nation. The vast, contiguous Northern Forest features the highest
    and most rugged mountain ranges in the Northeast; some of the very best
    free-flowing rivers in America; thousands of ponds and lakes that have
    to date escaped the irreversible impacts of development; and a forest
    that, if managed wisely, can provide a steady supply of timber while
    preserving important wildlife habitat and scenic beauty and serving as
    a destination for hunting, fishing, camping, hiking, snowmobiling, and
    other recreation uses.
        We have a unique opportunity to work together to protect the
    region's most important Wildlands; to promote the sustainable
    production of wood products from these forests; and to improve and
    expand resource-dependent local economies and communities. With funding
    provided by this Subcommittee, the Northern Forest Lands Council worked
    over four years with thousands of citizens and organizations
    representing a wide range of interests to develop 37 specific
    recommendations for state and federal action to conserve the Northern
    Forest.
        These recommendations are a reflection of the strong public support
    that exists across the region for protecting the resources, communities
    and way of life that is dependent on sustainable management of these
    forests. One of the key recommendations in the Council's report is
    support for public land acquisition as an essential part of a strategy
    for the future of the region. The Council called public land
    acquisition ``an important tool in protecting components of the full
    range of values in the Northern Forest.'' In response each of the four
    states has either established a land acquisition planning process that
    covers its portion of the Northern Forest, or has engaged in deciding
    strategies to protect important areas in the region. The Council
    recognized, however, that the states will need to work in partnership
    with the federal government to achieve these goals.
        Last Congress the Senate passed the Northern Forest Stewardship
    Act, a bill which would implement many of the recommendations of the
    Northern Forest Lands Council concerning land protection, sustainable
    forest management, and measures to strengthen local and regional
    forest-based economies. If this bill becomes law, it would provide
    explicit authority to the federal govermment--at the request of any of
    the four states--to use either the federal side or the state share of
    the Land and Water Conservation Fund to help finance acquisition of
    important Northern Forest conservation lands. This would provided long
    overdue access to a fair share of LWCF money to the people of New
    England. The Stewardship Act would authorize purchases from willing
    sellers only from the Fund.
        As an important step towards achieving the goals embodied in the
    Northern Forest Stewardship Act and implementing a comprehensive
    strategy to conserve the Northern Forest, the Northern Forest Alliance
    has identified a region-wide system of 10 proposed Wildlands across the
    four states. These areas contain lands vital to the region's forest
    produ. cts and recreation economies. A detailed description and
    discussion of possible protection strategies for these areas is
    attached to my testimony.
        Protecting the following parcels from possible development would be
    a critical forest step towards achieving a longer-term vision for the
    Northern Forest. In particular, seven projects involving more than
    80,000 acres of critical forest lands require immediate funding from
    the Land and Water Conservation Fund and the Forest Legacy Program if
    they are to be protected from imminent sale and development. By making
    this commitment, you would also indicate renewed support for the
    beleaguered Land and Water Conservation Frond which has served the
    people of our country so well for so long. fiscal year 1998 Northern
    Forest acquisition priorities
               fiscal year northern forest acquisition priorities
    Urgent
        Lake Tarlton, NH: 2,000 acres estimated.
        Public acquisition cost: $2.7 million.
        Request for Federal LWCF funds: $2.7 million.
        An appropriation from LWCF in fiscal year 1998 will complete the
    federal portion of this important project, started last year. Federal
    funds will leverage an additional $1.4 million investment from state
    and private sources to help protect the scenic and ecologically rich
    shore of Lake Tarleton and the surrounding forest including three
    lakes--Tarleton, Katherine, and Constance.
    Urgent
        Whitney Estate, NY: 15,000-20,000 acres.
        Estimated public acquisition cost: $25-50 million.
        Request for State LWCF funds: $10 million.
        Fifteen thousand acres of the ``Whitney Estate,'' a 51,000-acre
    tract in the heart of the Oswegatchie Great Forest, has been subdivided
    and offered for sale. This sale would fragment a critical stretch of
    forestland including more than 40 lakes and ponds, some of which form
    the headwaters of the Beaver, Raquette, and Bog rivers and the largest
    private lake in the Adirondacks.
    Urgent
        Long Trail, VT: 1,060 acres.
        Estimated public acquisition cost: $325,000.
        Request for State LWCF funds: $162,500.
        Seven key parcels on the northern section of Vermont's Long Trail,
    the Nation's oldest long-distance hiking trail, are for sale,
    jeopardizing the trail's continuity. These seven parcels, totaling
    1,060 acres, include 3.5 miles of the Long Trail itself, which runs the
    length of Vermont along the crest of the Green Mountains. More than
    200,000 Vermont residents and visitors hike sections of the trail
    annually, contributing significantly to Vermont's tourism economy.
    Urgent
        Fish Creek Watershed, NY: 30,000-40,000 acres.
        Estimated public acquisition cost: $7.5 million.
        Request for forest legacy funds: $5.625 million.
        An opportunity exists to protect 30,000-40,000 acres of
    irreplaceable watershed in the core of New York's Tug Hill Plateau with
    a combination of full fee purchase and conservation easement. The Fish
    Creek watershed lies within the Tug Hill area and provides drinking
    water to several cities and communities, including Rome and Oneida.
    Citing threats from land speculation and development, American Rivers
    has included Fish Creek in its list of the ``Most Threatened Rivers''
    in the Nation for 2 years.
    Urgent
        Green River Reservoir, VT: 6,350 acres.
        Estimated public acquisition cost: $2 million.
        Request for forest legacy funds: $1.5 million.
        Surrounding the 1,000-acre Green River Reservoir, this Forest
    Legacy project consists of more than 6,000 acres of forestland in
    northern Vermont. The property includes the state's longest length of
    undeveloped shoreline, approximately 19 miles, and has been top on the
    state's Forest Legacy list, stalled only by last year's recision of
    Forest Legacy funds.
    Urgent
        Nicatous Lake, ME: 22,000 acres.
        Estimated public acquisition cost: $4 million.
        Request for forest legacy funds: $3 million.
        Nicatous Lake is known for its high concentration of ecological,
    recreational, and economic values. This project would protect more than
    27 miles of shoreline on Nicatous Lake which is listed in ``Maine's
    Finest Lakes'' for its outstanding wildlife, scenic, and shore
    character resources, significant fisheries and cultural features.
    Urgent
        Upper Richardson Lake, ME: 5,122 acres.
        Estimated public acquisition cost: $2.2 million.
        Request for forest legacy funds: $1.65 million.
        The Upper Richardson Lake project presents the Forest Legacy
    Program with an opportunity to ensure that more than 5,000 acres stays
    in timber production and to protect 13 miles of lake shore. Residents
    and recreationists seek out Upper Richardson Lake for its fishing,
    hunting, remote camping, snowmobiling, and outstanding visual beauty.
        Pond of Safety: 9,880 acres
        Estimated public acquisition cost: $2 million.
        Request for forest legacy funds: $1.5 million.
        The Pond of Safety property spans more than 12,000 acres along the
    boundary of the White Mountain National Forest. A Forest Legacy
    Program, easement on 9,880 acres would link two surrounding sections of
    the National Forest, buffer it from development, guarantee continued
    public access for recreation, and protect important timber lands.
        Champion Lands, NY: 95,000 acres.
        Estimated public acquisition cost: $12-15 million.
        Request for forest legacy funds: $6 million.
        Request for State LWCF funds: $3 million.
        Without a combination of funding from the LWCF State Grants program
    and the Forest Legacy Program, extensive, high-value lands owned by
    Champion International along remote, pristine rivers in the northwest
    area of the Adirondack Park may be lost to fragmentation and
    development. LWCF money would be used for outright purchase of river
    corridors. Forest Legacy funds would enable the State to purchase an
    easement on the adjoining forestland, ensuring that the bulk of this
    95,000-acre holding remains in productive timber management.
        Lake George, NY: 400 acres
        Estimated public acquisition cost: $3.5 million.
        Request for State LWCF funds: $1.75 million.
        On the shores of Lake George, the ``Queen of American Lakes,'' an
    incredible 2.5 miles of pristine lake frontage is being offered for
    sale--and is in jeopardy of being developed and permanently closed to
    the public. This tract on the northeastern shore includes more than 400
    acres of forested mountain slopes and is an integral part of the
    undeveloped scenic landscape that supports the region's tourism economy
    which draws tens of thousands of visitors each year.
        Domtar Lands, NY: 105,000 acres.
        Estimated public acquisition cost: $10-15 million.
        Request for forest legacy funds: $6 million.
        In the heart of the Adirondack Park, Domtar Industries is offering
    a conservation easement on 105,000 acres of contiguous, high value
    forestland. While the property has been managed for a continuous flow
    of forest products, the 105,000-acre tract--and the jobs it supports--
    could be lost to fragmentation and development.
        Mattavamkeag Lake: 4,195 acres.
        Mattawameag River, ME: 11,218 acres.
        Moose River, ME: 4,525 acres.
        Estimated public acquisition cost: $2.8 million.
        Request for Forest Legacy Funds: $2.1 million.
        These three projects together contain a high concentration of
    public values including recreational assets, productive forest land and
    wildlife habitat. A total of 38 miles of shoreline would be protected
    from development through Forest Legacy easements which would help
    protect the region's water quality and provide valuable recreational
    resources for anglers and boaters.
    Total requested appropriations
        14 projects: 331,813 acres.
        Fiscal year 1998 priority request:
        Forest legacy program: $11.8 million.
        State LWCF funds: $10.16 million.
        Federal LWCF funds: $2.7 million.
        Total estimated Public Acquisition cost: $107 million.
        I also want to mention that the Alliance is a founding member of
    the new Americans For Our Heritage and Recreation coalition, an
    alliance of national, regional, State, and local organizations
    dedicated lo renewing and strengthening our Nation's investment in
    places that conserve our natural and cultural heritage and provide
    recreational opportunities for all Americans. We are determined to see
    the Land and Water Fund receive the full $900 million authorization
    annually, or to create an alternative that facilitates the protection
    of conservation lands, cultural and historic sites, urban parks, and
    expands outdoor recreation at the State and Federal levels. For fiscal
    year 1998, the coalition seeks an appropriation of $400-500 million to
    fund the top tier of the tremendous national backlog of State and
    Federal LWCF projects. It is particularly important that the state side
    of LWCF be re-vitalized to serve critical land conservation needs of
    urban and rural Americans across the country.
        Mr. Chairman, protection of these outstanding places represents a
    tremendous opportunity to conserve places of extraordinary natural and
    public value. It would also represent the continued commitment of
    Congress to work with the people of Maine, Vermont, New Hampshire, and
    New York to protect the irreplaceable resources of the Northern Forest
    for future generations of Americans. Thank your for considering this
    request.
                                     ______

      Prepared Statement of Daniel R. Dessecker, Forest Wildlife Biologist

        The Wildlife Habitat Management Program of the United States Forest
    Service is that portion of the Wildlife and Fisheries Budget Line Item
    that funds habitat management initiatives on our National Forests for
    wildlife species that are not classified as Threatened or Endangered.
        In 1994, the Wildlife Habitat Management Program was reduced by
    $9.5 million (22 percent). These funds were transferred to the newly
    established Ecosystem Planning, Inventory and Monitoring Program
    [EPIM]. In 1997, the now separate EPIM budget line item totaled $130
    million.
        The transfer of significant funds from well-supported, identifiable
    programs such as the Wildlife Habitat Management Program to EPIM, which
    is sufficiently broad to preclude and/or include virtually any
    expenditures renders it difficult to hold the Forest Service
    accountable for these expenditures. In addition, recent shortfalls in
    support for the Wildlife Habitat Management Program have hampered the
    timely implementation of resource management activities, including
    wildlife habitat management initiatives associated with timber sales,
    important to the conservation community.
        The Ruffed Grouse Society and other conservation organizations have
    long supported the Wildlife Habitat Management Program and have
    provided both technical and financial assistance to the Forest Service
    to capitalize on potential cooperative opportunities. Such
    opportunities are becoming increasingly scarce as reduced funding for
    this Program has forced the agency into the unenviable position of
    refusing partnerships and associated contributions.
        The Ruffed Grouse Society encourages the Interior Appropriations
    Subcommittee of the Senate to give serious consideration to returning
    funds to the Wildlife Habitat Management Program that have, since 1994,
    been diverted to EPIM. This return of approximately $10 million would
    translate into increased agency accountability and increased on-the-
    ground habitat management accomplishments.
                                     ______

       Prepared Statement of Steve Holmer, Campaign Coordinator, Western
                            Ancient Forest Campaign

        Chairman Gorton, thank you for this opportunity to testify on
    Forest Service Appropriations. The Western Ancient Forest Campaign
    represents organizations and individuals nationwide who are dedicated
    to protecting forest ecosystems on the National Forests.
        Working in conjunction with over forty other organizations, we have
    developed a Grassroots Forest Appropriations Initiative intended to
    outline a series of steps that we hope will help protect forest
    ecosystems and at the same time, help restore accountability to the
    U.S. Forest Service.
        Increasing evidence demonstrates that over the past two decades,
    our National Forests have suffered too much logging and too much
    roadbuilding with little concern about the impact these activities have
    on our clean water supplies, fish and wildlife, recreational
    opportunities and the numerous other values our public lands provide.
        Under the Salvage Logging Rider which suspended environmental laws
    and a citizen's right to have those laws enforced and participate in
    how their own lands were being managed, we witnessed the logging of old
    growth forests that had been protected by the courts. Under the rider,
    the guise of logging dead and dying trees was used to log large, green
    trees. Unroaded areas, which represent some our nation's last
    unprotected wilderness were entered and logged. The government's own
    Interagency Report on the Implementation of the Rider confirmed these
    abuses. And to their credit, the Administration's Glickman Directive
    halted some but not all of these abuses.
        In the aftermath of the rider, several lessons are clear. Our
    environmental laws and public processes should never again be
    suspended. Ancient Forests, roadless areas and riparian zones need
    permanent protection. And the U.S. Forest Service needs to be reformed
    and made more accountable.
        We offer The Grassroots Forest Appropriations Initiative to
    identify some specific ideas to help restore accountability to the
    agency and help stop the abuses that continue to threaten our forest
    heritage. Here are the four points in the initiative:
       the grassroots forest appropriations initiative (fiscal year 1998)
        The Timber Logging Rider clearly demonstrated the Forest Service's
    lack of accountability: healthy, green forests were logged as ``salvage
    sales,'' water quality was endangered in the name of ``forest health,''
    and no record exists that even a dime from any of the salvage sales
    sold under the Rider made its way to the U.S. Treasury. As a result of
    the failure of the Forest Service to protect the full range of forest
    values in the National Forests under their management, both the
    ecological integrity of our forests and the well being of federal
    taxpayers were sacrificed.
        We urge the 105th Congress to take the following steps to restore
    the accountability of the Forest Service and protect the interests of
    both taxpayers and our natural environment:
        1. Prohibit new roadbuilding on the National Forests by ending any
    appropriation for new roads and by prohibiting the use of purchaser
    road credits to build new roads.--The elimination of purchaser road
    credits in the President's budget is a good first step.
        2. Prohibit logging and road-building on unstable and potentially
    unstable national forest land.--Recent landslides in the West have
    demonstrated the ``hidden costs'' to public safety and the environment
    of subsidized logging and road building on steep, unstable slopes.
        3. Restore accountability by reforming or abolishing off-budget
    funds.-- There is a growing consensus that the various off-budget
    funds--the Knutson-Vandenberg (KV), Brush Disposal and Salvage Funds--
    must be either reformed or abolished. The Green Scissors Coalition
    urges abolishing the Salvage Fund and the Clinton Administration
    proposes new limits on this fund in the 1998 budget. The Administration
    has also proposed the creation of a new fund for ecosystem restoration
    called the Forest Ecosystem Restoration and Maintenance Fund (FERM).
    While we support the intent of the new FERM fund, as currently
    envisioned it would only perpetuate the same perverse incentive to log
    that plague the other funds. Instead, we support the Administration's
    request for $30 million of appropriated funds for restoration
    activities and urge Congress to appropriate necessary funds for
    restoration rather than creating another off-budget fund.
        4. End money-losing timber sales.-- The annual report of the White
    House Council of Economic Advisors shows that the Forest Service spent
    $234 million more than it collected in timber receipts in 1995.
    ``Generally, the Forest Service subsidizes timber extraction from
    public lands by collecting less timber sale revenues than it spends on
    timber program costs,'' the report says. According to the Government
    Accounting Office (GAO) the timber sale program lost nearly $1 billion
    from 1992-1994. For the sake of both the environment and the taxpayer,
    it is time to end subsidized logging on the National Forests. This
    initiative has been signed by over one hundred groups including Sierra
    Club, The Wilderness Society, California Wilderness Coalition, Federal
    Forest Reform, Headwaters, Inland Empire Public Lands Council, Klamath
    Forest Alliance, Northcoast Environmental Center, Oregon Natural
    Resources Council, Northeast Ohio Sierra Club, Northwest Ecosystem
    Alliance, Oregon Natural Resources Council and the Western North
    Carolina Alliance.
        To implement this initiative in the Interior appropriations bill we
    urge the Committee to:
        1. Eliminate funding for new timber roads and include language to
    direct the agency to prohibit timber sales in Ancient Forests, roadless
    and riparian zones.--In testimony before the Senate Energy Committee on
    February 25, 1997, Chief of the Forest Service Michael Dombeck
    testified, ``The unfortunate reality is that many people presently do
    not trust us to do the right thing. Until we rebuild that trust and
    strengthen those relationships, it is simply common sense that we avoid
    riparian, old growth and roadless areas.'' We urge the Committee to
    support Chief Dombeck's effort to reform the agency and restore the
    public's trust by adopting his common sense recommendation.
        2. Include language to prohibit logging and roadbuilding on
    unstable and potentially unstable National Forest land.
        3. Support the Administration's $30 million request for prescribed
    fire and restoration activities, provided that these activities be
    limited to non-commercial pilot projects to guide future restoration
    efforts.--While we recognize that there is a substantial backlog of
    needed forest rehabilitation work, there is substantial evidence that
    the agency is not spending current restoration or prescribed fire
    dollars in an appropriate fashion. For example, some restoration money
    is being spent removing logging slash which should have been cleaned up
    by logging companies as part of the timber sale. There is also concern
    that prescribed fire has been inappropriately used to convert forest
    types in violation of restrictions placed on type conversion found in
    the National Forest Management Act.
        We urge the committee to be very specific in how the restoration
    money is to be spent as occurred on the watershed restoration money
    appropriated under the Northwest Forest Plan. Further, we urge the
    committee to prohibit restoration activities that subsidize or in any
    way further logging operations by the agency.
        4. Oppose the creation of any new off-budget fund for the agency.--
    The other off-budget funds have been consistently abused by the agency
    and have created strong incentives to log even when other activities
    may be more appropriate.
        5. Prohibit the agency from offering any timber sales that will
    cost more than the agency can expect to receive in receipts for the
    sale.--The timber sale program lost $445 million in 1995 according to
    an independent analysis. According to the White House Council of
    Economic Advisors and the Government Accounting Office the program
    loses money. It is time to end this subsidy to the timber industry.
        Thank you again for this opportunity to testify, we look forward to
    working with the Subcommittee to realize these needed environmental and
    fiscal reforms.
                                     ______

     Prepared Statement of Lauri G. Aunan, Executive Director, Friends of
                               the Columbia Gorge

        Mr. Chairman and Subcommittee Members, thank you for the
    opportunity to submit this testimony in support of appropriations for
    vitally needed U. S. Forest Service land acquisition and payments to
    local governments in the Columbia River Gorge National Scenic Area.
    This testimony is submitted on behalf of Friends of the Columbia Gorge
    (``Friends'') and its approximately 1,700 members in the Northwest and
    throughout the country.
        In 1986, the Congressional Delegations of Oregon and Washington
    State worked in tandem to pass legislation creating the Columbia River
    Gorge National Scenic Area. When President Reagan signed that
    legislation into law on November 17, 1986, he finalized the
    establishment of one of the most unique federal designations for one of
    the most spectacular places in the world.
        Since the enactment of the Scenic Area Act 10 years ago, Congress
    has worked diligently in a bipartisan way to meet its commitments and
    fund the programs authorized under the Act. These programs include land
    acquisition, economic development, payments to local governments,
    development of recreational facilities, and protection of cultural
    resources. We applaud the courageous stand originally taken by Congress
    to create the Scenic Area and its diligent efforts to implement the
    law. Much more, however, remains to be accomplished.
        To continue the legacy of commitment to both the natural and human
    resources of the Columbia Gorge National Scenic Area, we strongly
    recommend two funding priorities for the Scenic Area for fiscal year
    1998. The first priority is adequately funding the Scenic Area land
    acquisition program by providing at least $4.9 million through the Land
    and Water Conservation Fund. The U.S. Forest Service Scenic Area office
    has identified at least this amount of funding as necessary to meet
    land acquisition needs for fiscal year 1998, and Friends will be
    working with the Forest Service and landowners to provide a final list
    of priority lands and funding. The second priority is continuing the
    appropriations begun in fiscal year 1997 to provide payments to local
    governments.
        Both of these programs will protect the significant federal
    investment already made in the Gorge and continue building on the
    progress that Congress, through this Subcommittee, has made over the
    years to fulfill all dimensions of the Scenic Area Act, from economic
    development to environmental protection.
                 background: unique resources, unique solutions
        As I believe the Subcommittee is aware, the Columbia Gorge is a
    national treasure that is like no other place in the country.
    Stretching 85 miles along the Columbia River, this deeply carved sea-
    level channel through the Cascade range is home to a remarkable
    diversity of public resources. From the dry eastern Gorge to the dense
    conifer forests and surging creeks of the west, dazzling wildflower
    displays, including species found nowhere else on earth, cover
    hillsides and plateaus along the river. The corridor is rich in
    history--figuring prominently in the journals of Lewis and Clark and
    the Oregon Trail settlers--and in Indian prehistory, with ancient
    petroglyphs and village sites bearing witness to thousands of years of
    Indian life and commerce.
        Among the countless waterfalls that spill from high hanging valleys
    is Multnomah Falls, one of the tallest in the United States and the
    single most visited attraction in the entire National Forest system.
    Along with awe-inspiring geologic features that include towering
    monoliths, pillars, stone arches, these resources comprise a world-
    class experience for those who live in the Gorge and the many thousands
    of visitors who come from across the country and around the world to
    enjoy the spectacular scenery, recreation, and natural and historical
    heritage.
        After completion of the Columbia Gorge Scenic Highway in 1916,
    state and county parks in Oregon and Washington were established to
    meet recreational demand, provide scenic vista points, and protect
    important natural features. A portion of the Gorge lands also fell
    under the jurisdiction of the Mt. Hood National Forest. But by far the
    majority of Gorge lands, including many of the most resource-rich areas
    and most prominent view sheds, remained unprotected or at best partly
    protected. Much privately held land was completely unzoned, raising an
    increasing threat of scatter-shot, unplanned development that would
    have irreparably destroyed the rural way of life and natural and
    cultural heritage of the Columbia Gorge. This sort of development, in
    such key scenic areas as the Multnomah Falls view shed and the Mt.
    Pleasant highlands at the western ``gates of the Gorge,'' was on the
    drawing boards in the late 1970's. In response, the Department of the
    Interior prepared a study, and Congress considered legislative
    proposals in the early 1980's to maintain the Gorge's special character
    while also supporting the capacity of towns in the Gorge to maintain
    economic development and appropriate growth.
        In 1986, the legislation creating the Columbia River Gorge National
    Scenic Area was enacted, establishing a new partnership approach for a
    complex area that is a mixture of urban, rural and wild lands with
    various federal, state, county and private ownerships. Under the Scenic
    Act, cities within the Scenic Area are targeted for economic
    development and growth, and are administered by city governments. Many
    of the most critical resource lands are included in ``Special
    Management Areas'' in which public land consolidation and stewardship
    are primarily the responsibility of the Forest Service. For other
    areas, county governments are relied on, through zoning and planning,
    to ensure that private land uses are consistent with the Gorge's rural,
    agricultural character and heritage.
        protecting the gorge through land acquisition--progress to date
        Friends greatly appreciates the Forest Service's demonstrated
    commitment, with the support of this Subcommittee, in securing the most
    critical recreational, natural and scenic lands on an as available
    basis through its land acquisition program. Land acquisition
    appropriations in previous years have allowed the Forest Service to
    make substantial progress in securing some of the Gorge's most special
    resources, from the rare plants and hiking trails of Burdoin Mountain
    and Rowena Dell to the pastoral Mt. Pleasant Highlands and the
    undisturbed Archer Mountain. These federal efforts have combined with
    private conservation work and state acquisitions (in such crucial areas
    as Beacon Rock State Park and the beautiful 6,000 acre Dalles Mountain
    Ranch in Washington) to move further toward comprehensive protection of
    the crown jewels of the Gorge.
        But a number of private properties remain in these areas of
    consolidation, including lands that could be developed among otherwise
    protected landscapes. Public and private investment in the conservation
    of these areas, and the good work to date toward comprehensive public
    management, will be jeopardized unless these parcels can be secured
    from willing sellers.
        Toward this end, Friends is developing a list of specific
    properties to be acquired, in conjunction with the landowners who have
    willingly offered these properties for sale, the U.S. Forest Service,
    and the Columbia River Gorge Commission. This coalition of landowners,
    land managers and land protection advocates all agree on the importance
    of this level of funding and of acquiring these parcels in a timely
    fashion. A preliminary list of properties has already been identified
    and outlined by the Forest Service which identifies $4.9 million in
    needed land acquisition funding. As soon as a final list is agreed to
    by all parties, we will transmit it to the Subcommittee as soon as
    possible.
        Some examples of key parcels which will almost certainly be on this
    list include the following:
        Catherine/Major Creek, WA.--For the past ten years, the Forest
    Service has acquired numerous fee interests to protect the scenic
    quality and natural heritage of this one-of-a-kind landscape in the
    eastern Gorge in Klickitat County, Washington. Along an approximately
    20-mile stretch of the Columbia River are rare oak grasslands and
    native wildflowers unique in the world. Several prominent properties
    here have been offered by landowners for public purchase.
        Cape Horn/Mt. Pleasant, WA.--The Forest Service has also acquired
    numerous fee and conservation easement interests to protect these
    spectacular pastoral and forested cliffs and fields, signature
    landscapes of the western Gorge and only a short 20-minute drive from
    Vancouver, Washington. Due to these lands' proximity to Clark County,
    Washington--one of the fastest growing counties in the country--these
    properties are at extremely high risk of sprawling development and
    timber harvest. Several prominent properties in this area have been
    offered by landowners for public purchase.
        These are examples of key properties that need to be acquired to
    realize the vision and protect the national investment in this special
    area. Failure to take advantage of these offers from landowners will
    result in inconsistent development that would frustrate the years of
    effort and investment.
                   meeting commitments to county governments
        The second funding priority is to continue the effort begun in
    fiscal year 1997 to provide Gorge county governments with payments to
    compensate for lost tax revenue due to federal land acquisition. In
    1986, Congress recognized that private land would need to be purchased
    in order to protect the ecological and cultural resources of the Gorge.
    It also realized, through its experiences creating such legislation as
    the Payments in Lieu of Taxes Act of 1976, that putting private land
    into public ownership can put a strain on the operating budgets of
    county governments. When the Gorge Act was considered in 1986, however,
    the PILT program did not provide payments to counties for lands newly
    transferred into public ownership. Only lands in public ownership when
    PILT was originally passed actually received payments. Therefore,
    Congress included in the Gorge Act a provision for $2 million to be
    authorized for five years of PILT-type payments to Gorge counties for
    lands newly acquired, and taken off the tax rolls, by the Forest
    Service.
        Unfortunately, no money was appropriated for this program until
    fiscal year 1997--$250,000. Friends believes this commitment to the
    counties has gone unmet long enough and supports an appropriation of
    $215,000 in fiscal year 1998 for continuing this program, an amount
    identified by the Forest Service as necessary to meet its commitments
    under this authorization.
                      protecting the gorge--the next steps
        In the land acquisition category, the Catherine/Major Creek and
    Cape Horn/Mt. Pleasant properties are among a number of available lands
    in the Columbia Gorge for which we are told the Forest Service will be
    requesting at least $4.9 million. This request is clearly a recognition
    of the national importance of this program. We believe that at least
    $4.9 million is needed this year to help complete the vision that has
    come so far in the past 10 years. We hope the Subcommittee will be able
    to provide this amount.
        In addition, we hope the Subcommittee will provide the small amount
    identified by the Forest Service for the payments to counties
    authorized under the Act. These payments will assist these governments
    with providing services to Gorge residents, as well as the area's
    rapidly growing number of visitors, most of whom come to experience the
    magnificent vistas, waterfalls, wildflowers and recreational
    opportunities of the National Scenic Area.
        We appreciate all of the support you have given this program in the
    past. With the funding we are requesting, we believe the Forest Service
    can make significant progress toward realizing the goals of the
    National Scenic Area Act, and protecting the heritage of the Columbia
    Gorge.
        Thank you very much for your consideration of this testimony.
                                     ______

     Prepared Statement of James Earl Kennamer, Ph.D., Vice President for
             Conservation Programs, National Wild Turkey Federation

        The National Wild Turkey Federation [NWTF] urges the United States
    Senate to increase funding of the U.S. Forest Service Challenge Cost
    Share Program, hire additional wildlife biologists for our National
    Forests and increase funding of wildlife management programs thus
    allowing the private sector to increase our commitment of resources on
    our National Forests.
        The NWTF is an international nonprofit conservation organization
    centered in the United States. Our 132,000 members are dedicated to the
    conservation of the wild turkey and the preservation of the turkey
    hunting tradition. Our 800 volunteer chapters work closely with state
    and Federal conservation agencies to manage the wildlife resources on
    public and private lands. The NWTF cooperates with the U.S. Forest
    Service to cost share projects on National Forests through the ``Making
    Tracks'' program.
        While the NWTF supports the Federal government's commitment to
    ecosystem management and wildlife conservation on the National Forests,
    we are particularly concerned with the continued reduction in the level
    of funding for wildlife management programs and projects. This
    reduction in funding has seriously impeded the management of both game
    and nongame species on many National Forests. Similarly, the reduction
    in the number of trained and experienced wildlife biologists on many
    forests has reduced the level of expertise to the point that there are
    simply not enough qualified people to do the job. This reduction in
    force has occurred at a time when the wildlife related workload (legal
    appeals, threatened and endangered species concerns, wetland issues and
    ecosystem management planning) have increased dramatically. This
    increase in wildlife related work will continue in the foreseeable
    future.
        At a recent meeting with the U.S. Forest Service in Washington, DC,
    the gravity of the situation became apparent.
        The USFS Wildlife Habitat Management budget has decreased 7 percent
    since 1993 and is 23 percent below the 1993 agency request.
        Currently 15 forests of 119 reporting do not have forest level
    wildlife biologists.
        All forest-level wildlife and fisheries staff officers have been
    eliminated from the Southwestern Region.
        Technicians, rather than biologists, now do most of the wildlife
    work in the Southeast.
        Less Challenge Cost Share funds are reaching the ground at a time
    when more money is available from the private sector.
        Since 1986, The USFS, the NWTF and the state wildlife agencies have
    completed over 542 projects for a total expenditure of $3.75 million on
    the National Forests. The NWTF has contributed $1.24 million or
    approximately 33 percent of these funds. The down-sizing of the Federal
    Government was supposed to increase the number of partnerships. The
    opposite is true since less dollars and manpower are available to
    develop projects and cultivate partnerships.
        The National Forests produce some of the pulp and much of the saw
    timber that this country needs. The forests also protect water quality
    and while these uses are important they are overshadowed by the value
    of the forests for wildlife habitat and as recreational areas. In a
    1993 USFS study of the economic impact of the National Forests on Gross
    Domestic Product, approximately $105 billion or 85 percent was
    attributable to recreation including hunting, fishing and wildlife
    viewing.
        The National Forests can and should provide timber and wildlife
    benefits to the nation. These two uses are interdependent, not mutually
    exclusive. However, the reduction of the wildlife budget is so great
    that the USFS can no longer be expected to do ``more with less''. They
    can only do ``less with less'' and our National Forests and their
    valuable timber and wildlife resources are beginning to show the
    strain.
        The NWTF applauds the effort this administration and the Congress
    have made to reduce the national debt. However, the wildlife resource
    and the recreational users are being adversely impacted
    disproportionate to their value to the nation. Partners such as the
    NWTF are willing and able to help fund projects through the Challenge
    Cost Share Program, but the USFS needs the matching funds and the
    trained professionals on the forest to help us spend our volunteer's
    funds wisely.
        The NWTF urges Congress to increase funding of the Challenge Cost
    Share Program, hire additional wildlife biologists and increase funding
    of wildlife management programs thus allowing the private sector to
    increase our commitments on our National Forests.
        Thank you for this opportunity to comment on this most important
    issue.
                                     ______

     Prepared Statement of Lonnie L. Williamson, Vice President, Wildlife
                              Management Institute

        Mr. Chairman: I am Lonnie L. Williamson, vice-president of the
    Wildlife Management Institute. Established in 1911, the Institute is
    staffed by professional wildlife scientists and managers. Its purpose
    is to promote the restoration and improved management of wildlife in
    North America.
                              u.s. forest service
        Wildlife habitat.--WMI recommends that the U.S. Forest Service
    wildlife account, referred to in the agency as the ``Get Wild
    Program.'' be increased in fiscal year 1998 to $40 million, which would
    be $10 million more than requested by the administration. And, we
    recommend that $8 million be earmarked for the Challenge Cost-Share
    Program.
        The Service's Wildlife Habitat program was drawn in fiscal year
    1994 and has been in the process of being quartered ever since. The
    President's request of $28.3 million for fiscal year 1998 is 27 percent
    below the fiscal year 1993 appropriation of $38.9 minion. For an
    already seriously underfunded effort, this is a particularly savage
    blow. Wildlife is suffering from inattention as the number of wildlife
    biologists eases down and those that remain are reassigned non-wildlife
    duties. On the Ouachita National Forest, for example, there is only
    $128,000 in wildlife funds to cover 1.75 minion acres. Ouachita's
    wildlife program is surviving only with the use of KV funds, which may
    or may not be available in any given year. If this inequity is not
    corrected, wildlife uses will have to be curtailed, causing significant
    social and economic distress. Under this scenario, we now can make the
    same mistakes in all Forest Service regions as were ineptly
    accomplished in the Pacific Northwest, which is now costing a fortune
    to correct.
        Indicative of the Forest Service's lost ability to take proper care
    of the public's wildlife is the Challenge Cost-Share Program, which
    matches non-federal contributions to implement wildlife habitat
    improvement projects on national forests. Forest Service partners
    participating in the program consistently provide more than their share
    to this effort because the agency does not have funds to match those
    donated. In fiscal year 1993, the Service had but $4.5 million to match
    $6.6 million provided by partners. In fiscal year 1994, it was $6.2
    million for the Service and $7.4 for the partners. In fiscal year 1995,
    it was $5.6 million to $7.4 million. Last year, the partners began
    diverting funds from the national forests because of the lack of
    matching by the Service. In the Pacific Northwest, more than $200,000
    were retrieved from the table by partners because the Service had no
    matching money.
        Inland fisheries.--WMI supports the administration's request of
    $17.157 million for inland fisheries on national forests. We further
    suggest that $3.4 million be earmarked for Challenge Cost-Share
    projects.
        Anadromous fisheries.--WMI supports the Administration's request of
    $22.521 million for anadromous fisheries. And, we recommend that $3.1
    million be earmarked for Challenge Cost-Share projects.
        Threatened and endangered species.--WMI supports the
    administration's request of $27.218 million for T&E species. That is $5
    million more than fiscal year 1997. This is about one third of what the
    Forest Service says that it needs for T&E species. And that is no
    mystery, considering the scant attention given to the vast majority of
    national forest species which are not endangered. By not making the
    investments in the Wildlife Habitat account, we assure a continued
    march of species into the T&S category, where huge amounts of money are
    needed to protect and/or extricate them. WMI also recommends that $5.1
    million of T&F funds be earmarked for Challenge Cost-Share projects.
        Rangeland management.--WMI supports the administration's request
    for an additional $7.4 million to improve range conditions. Despite
    progress, 23.5 million acres of the 99 million acres of grazed national
    forest remain in unsatisfactory condition. This program has been sorely
    underfunded for years. Its budget could be doubled without taking care
    of all the needs.
        Seeking common ground.--WMI recommends that $300.000 of the Forest
    Service's budget be earmarked for Seeking Common Ground ($150,000 from
    wildlife and fish and $150,000 from range management). SCG is the most
    successful range restoration program to date. It is directed and funded
    by the Forest Service, Bureau of Land Management, National Fish and
    Wildlife Foundation, American Farm Bureau Federation, Rocky Mountain
    Elk Foundation, and Wildlife Management Institute. It features local
    groups solving local problems at the local level in the national
    interest. We encourage the committee to become familiar with this
    effort. A speech that I gave on the beginnings of SCG is attached for
    the committee's information.
        Forest stewardship and stewardship incentive.--WMI supports the
    President's request of $23.380 million and $10.230 million respectively
    for the Forest Stewardship and Stewardship Incentive programs. Forest
    Stewardship fosters constructive interdisciplinary partnerships between
    state foresters and state wildlife agencies. For example, this program
    shares the costs with state wildlife agencies of hiring professional
    wildlife managers to work closely with foresters in writing multiple
    purpose forest management plans. This cooperative effort helps ensure
    that nonindustrial private forests are managed to meet resource
    objectives of landowners who want to integrate wildlife habitat with
    forest product production. Stewardship Incentive provides cost-share
    funds to help NIPF landowners implement forest plans produced under the
    Forest Stewardship program.
        Forest and rangeland research.--WMI recommends that Forest and
    Rangeland Research be increased $2 milling to $181.781 million, so that
    the Service may have about the same amount (in inflated dollars) as in
    fiscal year 1997.
        Ecosystem planning, inventory, and monitoring.--WMI recommends that
    the increases recommended above may be offset by taking money from the
    EPIM account. Ground-level resource management activities, including
    fish, wildlife and range have suffered in great part because funds were
    taken from those efforts to finance this account, which is not
    justified in the budget. We have not been informed on how the EPIM
    money is being spent, nor have we seen the benefits of that
    expenditure. We can but conclude that on-the-ground management
    activities are more important to the National Forest System and its
    customers.
                           bureau of land management
        Wildlife, fisheries and T&E species.--WMI is most disappointed with
    the administration's request for $44.573 million to fund fisheries,
    wildlife and T&E species on BLM's 270 million acres. The wildlife
    account is essentially the same as in fiscal year 1997 and remains
    about 10 percent below the fiscal year 1991 level. BLM reported
    recently that its lands and waters now harbor more than 300 species
    either listed as T&E or proposed for listing. T&E species on BLM land
    has been increasing about 20 species annually during the past several
    years. And that is no wonder, considering the meager wildlife
    management resources available.
        By denying wildlife a seat at the table when land management
    decisions are made on livestock grazing, timbering, mining and the
    like, we are perpetuating a very efficient model that creates
    endangered species. WMI recommends that this budget item be increased
    by $7 million above the administration's request, up to $51.573
    million. We recommend that the wildlife account be increased to $24
    million, which better reflects the funding called for in BLM's Fish and
    Wildlife 2000 document. We also support a $1 million increase in the
    fisheries account to get it nearer the Fish and Wildlife 2000 level.
    And, we recommend that the T&E account be upped by $2 million for the
    same reason. As with the Forest Service, we note that adequate
    investments must be made in the nonendangered species to keep them out
    of the T&E category and from disrupting multiple uses of the land.
        Rangeland management.--WMI supports the administration's request
    for $54.342 million to finance the rangeland management program.
    However, we recommend that $150,000 be added for the purpose stated
    below.
        Seeking common ground.--WMI recommends that $150,000 of our
    proposed add-on to Wildlife, Fisheries and T&E Species, and the
    $150,000 proposed add-on to Rangeland Management, be earmarked for
    Seeking Common Ground.
                         u.s. fish and wildlife service
        Endangered species.--WMI supports the administration's request of
    $11.4 million. We further recommend that the Cooperative Endangered
    Species Conservation Fund be budgeted at the $14.1 million dollar level
    enacted in fiscal year 1997. Endangered and threatened species
    conservation, management, and recovery activities were impaired by
    Congressional action in the last Congress, and the backlog of proposed
    listings and recovery actions must be erased. We are disappointed that
    the administration proposes to reduce the Section 6 funds available to
    the states for T&E conservation projects to $14 million from the fiscal
    year 1997 level of $14.1 million. The management action necessary to
    conserve T&E species, and to conserve candidate species prior to
    listing, is best taken by the various states.
        Habitat conservation.--WMI supports the Administration's request of
    $57 million for Habitat Conservation. The Partners for Wildlife Program
    is extremely popular with private landowners, and by providing cost-
    sharing, gives landowners the incentives and the capability to
    implement conservation practices on private lands, often reducing or
    eliminating important causes of wetland and other habitat degradation.
    Similarly, the Project Planning activity saves millions of dollars in
    habitat restoration needs by assuring that planned projects are
    designed from the outset to minimize adverse environmental
    consequences.
        Refuge operation and maintenance.--WMI recommends an appropriation
    of $220 million for Refuge Operation and Maintenance. The maintenance
    needs of National Wildlife Refuges have been consistently neglected to
    the point of jeopardizing the ability of some refuges to accomplish
    their mission. There is currently a maintenance backlog of $428 million
    on National Wildlife Refuges. We recommend the administration's budget
    request of $192 million be increased to $220 million, with the
    additional $28 million earmarked for reduction of maintenance backlogs.
        Congress requested information regarding the use of animal traps on
    National Wildlife Refuges in the fiscal year 1997 Appropriations
    Conference Report. Some question the use of certain types of traps.
    However, there are no other suitable trapping devices to use as yet,
    even though USDA-APHIS-ADC and a coalition in Vegreville, Alberta,
    Canada continue research for alternatives. The U.S. Fish and Wildlife
    Service has not contributed to either of these research efforts. Given
    the significant role trapping plays in the management of National
    Wildlife Refuges, we recommend $200,000 be added to the Fish and
    Wildlife Service budget and earmarked for methods development research
    at USDA's National Wildlife Research Center at Fort Collins.
        Migratory bird management.--WMT supports the administration's
    request of $17.1 million. Monitoring migratory bird populations, both
    nongame and game species, is necessary to detect population declines
    and address them before species become rare and may require listing as
    T&E species. Increased funding for the North American Waterfowl
    Management Plan not only benefits waterfowl, but leverages federal
    dollars through partnerships with states, organizations, and
    individuals, and also provides habitat conservation and restoration
    benefits to a whole suite of other wetland birds and amphibians.
        Wildlife conservation and appreciation fund.--WMI supports a $1
    million appropriation for the Wildlife Conservation and Appreciation
    Fund. This fund leverages federal expenditures by serving as a match
    for external contributions, and provides the states badly-needed money
    to manage species which are neither harvested nor listed as threatened,
    endangered, or candidate species. In most states, there is little or no
    other funding source for managing such species.
        North American wetlands conservation fund.--WMI recommends
    appropriation of the full amount authorized by Congress of $30 million.
    This highly successful program returns $2 of nonfederal funds for each
    $1 of federal funds, and has attracted more than 600 paying partners.
    The program consistently receives more proposed partner cost-sharing
    each year than can be covered by the full $30 million. Millions of
    dollars of nonfederal funds are being lost each year.
        National Fish and Wildlife Foundation.--WMI supports a fiscal year
    1998 budget of $7.5 million for the Foundation. The National Fish and
    Wildlife Foundation has raised more than $2 non-federal for every
    federal dollar expended. Over 11 years, more than 1,800 grants have
    advanced management of wildlife, fish and their habitats. Increased
    appropriation will assist the government in doing more for wildlife
    with less federal money.
                    u.s.g.s.--biological resources division
        The Wildlife Management Institute supports the administration's
    proposed budget of $145 million for the Biological Resources Division
    of the U.S. Geological Survey. The Biological Resources Division (BRD)
    of the United States Geological Survey comprises nearly the entire
    biological research capacity of the Department of the Interior (DOI).
    Prior to the formation of the National Biological Survey, scientists
    and programs of BRD were located in the land management agencies of DOI
    (U.S. Fish and Wildlife Service, Bureau of Land Management, National
    Park Service). Removal of scientists and programs from the land
    managers critically impairs the communication of research needs from
    managers to scientists and the communication of research results from
    scientists to managers. The result is that the scientific information
    needs of land managers are less well met. The important work of BRD
    includes research in support of federal land management, research on
    endocrine disrupters in the environment, research on restoration of
    degraded lands, research on restoration of Great Lakes fisheries,
    development of scientific information management technology and making
    scientific data accessible to users, and the Cooperative Fish and
    Wildlife Research Units.
        The Cooperative Research Units are particularly important. State
    fish and wildlife agencies depend on the Cooperative Research Units to
    deliver scientific information needed for effective fish and wildlife
    management. The Units also train the next generation of fish and
    wildlife scientists, and are an efficient use of federal dollars since
    those dollars are leveraged by contributions of the state fish and
    wildlife agencies and universities. There are currently 22.5 vacant
    positions of Unit Leader and Assistant Leader. A high priority of BRD
    should be to fill those vacant positions over the next few years. We
    support that priority emphasis, and support the administration's
    requested increase of $1 million earmarked to reduce the number of
    vacant positions at the Cooperative Fish and Wildlife Research Units.
                                     ______

            Letter From Jean Hocker, President, Land Trust Alliance
                                        Washington, DC, April 14, 1997.
    Hon. Slade Gorton,
    Chairman, Subcommittee on Interior and Related Agencies,
    Committee on Appropriations, U.S. Senate, Washington, DC.
        Dear Chairman Gorton: On behalf of the Board of Directors and
    members of the Land Trust Alliance (LTA), I am sending this letter to
    be included in the record of testimony on the fiscal year 1998
    appropriation to the Department of the Interior.
        The Land Trust Alliance serves more than 1,200 land trusts across
    the country. These are independent grassroots organizations dedicated
    to protecting land and the quality of life in their communities through
    private, voluntary action. Working within a cooperative, incentive-
    based strategy, these groups have helped save more than 4 million acres
    of wetlands and wildlife habitat, productive farm and forest lands, and
    other significant resources.
        Land trusts have worked with several programs under the committee's
    jurisdiction to conserve land valuable to communities across the
    country, usually leveraging the private funding that is the key to the
    success of these programs. They have formed partnerships with local
    landowners and the Partners for Wildlife program to protect valuable
    privately-owned habitat. They have helped preserve valuable working
    timberland by arranging easements under the Forest Legacy program. They
    have helped make possible land conservation plans that have used
    acquisition funding under the federal Land and Water Conservation Fund
    (LWCF) appropriation. They have worked with state and local governments
    to target state-side LWCF funding to the best purposes.
        Though clearly effective, these programs are suffering from chronic
    underfunding. The LWCF appropriation has fallen to a level far too low
    to meet even the most urgent federal land acquisition priorities. State
    LWCF funding, so important to community conservation efforts, has been
    eliminated. Partners for Wildlife, an extremely responsible and cost-
    effective program of public-private partnerships was also recently
    threatened with elimination. Forest Legacy, an innovative program that
    has suffered from unnecessary administrative delays, is now funded at a
    level so low as to barely make it a viable national program.
                    federal land and water conservation fund
        The lack of funding from the Land and Water Conservation Fund is
    bad public policy since the government collects these funds under a law
    that intends them to be used for conservation purposes. The diverting
    of the vast majority of these funds to other purposes, while perhaps
    understandable given fiscal constraints, is nevertheless at odds with
    the intent of the law establishing the fund, and it all but creates a
    situation in which the government is collecting fees under a false
    pretext. The appropriation committee can begin to return the use of
    LWCF to its original purpose by appropriating a larger percentage of
    LWCF funds for the purposes for which they are collected. An increase
    in this appropriation will encourage land trusts to carry out more
    important land conservation projects as they have in the past.
        For example, a $10.5 million LWCF appropriation made possible the
    acquisition of 1,227 acres of land bordering the Golden Gate National
    Recreation Area in San Mate, California. Because of the appropriation,
    the Peninsula Open Space Trust was able to leverage $10.5 million in
    private contributions to purchase the tract which was subsequently
    transferred to the National Park Service for the enjoyment of all
    Americans.
        In addition, a $1.4 million LWCF appropriation enabled the
    Wilderness Land Trust to purchase and protect a 1,320 acre inholding in
    the James Peak Roadless Area. Situated near Rocky Mountain National
    Park in Colorado, this U.S. Forest Service high-priority acquisition
    could not have occurred without the trust's involvement. Because of the
    appropriation and the trust's excellent and on going relationship with
    the landowner, the largest private inholding in the James Peak Roadless
    Area is now in public ownership and the area may finally achieve long-
    sought wilderness designation.
        President Clinton's fiscal year 1998 request for $167 million from
    the LWCF is inadequate. LTA recommends that the committee provide
    funding at a level more consistent with the demonstrated need. A more
    appropriate level would be almost triple the President's request, to
    $450 million, which would be only slightly more than half of the level
    Congress appropriated twenty years ago: in fiscal year 1978, Congress
    appropriated $805 million from the LWCF, $314.1 million of which was
    directed to state matching grants.
                  state-side land and water conservation fund
        Congress also needs to fulfill its legal responsibilities under the
    LWCF to provide matching grants to states. State LWCF grants leverage
    at least an amount equal to federal conservation funding, and therefore
    have a positive impact far in excess of the amount appropriated. State-
    side LWCF funding has suffered a dramatic reduction over the past five
    years: at this point, the program is all but shut down. There is no
    fiscal year 1997 money for state grants, nor does the Administration
    propose any for fiscal year 1998. It is unfortunate that a program that
    has historically been very successful in promoting community and
    nonprofit involvement in conservation activities should suffer from
    such neglect.
        Grants to states from LWCF spawned a fruitful partnership between
    the State of New Hampshire and the state's largest land trust, the
    Society for the Protection of New Hampshire Forests. The Society has
    been successful in acquiring several properties that the state has
    deemed as desirable for park land. The Society's nongovernmental status
    has allowed it to move quickly and decisively to protect land for state
    parks--land that might have otherwise been developed. The Society then
    transfers the land to the state after the state has received its state
    LWCF funding. Without these grants, the people of New Hampshire's would
    not have as many state parks to enjoy, and their right to have adequate
    outdoor recreational opportunities would be compromised.
                             forest legacy program
        The Forest Legacy program is another example of a highly leveraged
    program that gets a tremendous value for each federal dollar
    appropriated to it. It provides partial funding of conservation
    easements on working timberland. This program has in the past been
    plagued by administrative delays, but the 1996 farm bill amended the
    program to allow for direct state grants in the hope that this would
    help to streamline the process and make Forest Legacy more efficient.
    Even before this new administrative provision, land trusts formed
    successful partnerships with the U.S. Forest Service through the Forest
    Legacy program to protect thousands of acres of forestland threatened
    with conversion.
        For example, the Rangeley Lakes Heritage Trust worked with the
    Forest Legacy program to protect 1,272 acres of pristine Maine
    forestland. As a result of the Forest Service's decision to supply
    $840,000 for the acquisition of a conservation easement on the
    property, the trust was able to raise over $400,000 to cover the
    remaining amount needed to purchase and protect the tract. The result
    was the protection of 3.4 miles of lakefront that represented a
    critical link in 12 miles of continuous undeveloped lakeshore. It also
    contributed to more than 40 miles of protected shorefront in the
    Rangeley Lakes chain which encompasses over 33,000 acres of public
    access conservation lands.
        In a wooded area on the outskirts of Boston, the purchase of a
    permanent 73-acre conservation easement by the Forest Service helped to
    facilitate the protection of nearly 1,200 acres in the historic
    Estabrook Woods of Concord and Carlisle. A favorite haunt of Henry
    David Thoreau, the Woods have come under increasing development
    pressure. The Forest Service's willingness to purchase the easement
    served as the catalyst that allowed several area land trusts to
    complete negotiations on the protection of the adjoining woodlands.
        LTA recommends an increase of funding for the program because of
    the need to protect timberland and because of the growing number of
    states qualified to participate in it. An appropriation at least three
    times the President's request of $4.006 million--and substantially
    increased over last year's level of $2 million--is required to allow
    the program to function as an effective, national program to protect
    private working timberland.
                             partners for wildlife
        With some reluctance, LTA supports the President's fiscal year 1998
    level funding requests for Partners for Wildlife of $22.513 million,
    although it is inadequate to meet the need in these areas, as
    acceptable given current budgetary constraints.
        Thank you for considering the views of the Land Trust Alliance on
    behalf of the 1,200 private citizen conservation organizations that
    make up the nation's burgeoning land trust movement as you make your
    funding decisions for the coming fiscal year.
                Sincerely,
                                                   Jean Hocker,
                                                             President.
                                     ______

      Letter From Daniel P. Beard, Senior Vice President for Policy, the
                            National Audubon Society
                                        Washington, DC, March 31, 1997.
    Senator Slade Gorton,
    Chairman, Subcommittee on Interior Appropriations,
    U.S. Senate, Washington, DC.
        Dear Senator Gorton: On behalf of the National Audubon Society's
    more than half a million members and our 515 chapters in communities
    throughout the United States, I am writing to you regarding the
    Department of Interior and Related Agencies appropriations bill for
    fiscal year 1998. National Audubon is dedicated to the protection of
    birds, wildlife, and their habitat for the benefit of all Americans and
    for future generations. Proper stewardship of our public lands and
    wildlife requires adequate levels of funding. To that end, we have
    identified below a number of priorities that support our goal of strong
    stewardship of our national lands and wildlife. We would appreciate it
    if your office would include this letter in the public record.
                        preservation of migratory birds
        In the United States more than 60 million people identify
    themselves as birdwatchers, contributing more than $20 billion annually
    to the U.S. economy. Yet year after year the U.S. government fails to
    sufficiently fund programs that protect nongame birds, despite the fact
    that it makes good economic sense. In conjunction with Partners in
    Flight, Audubon recently published the WatchList; it includes 90 bird
    species, primarily nongame, that are in decline. Funding for the
    conservation of these birds today will halt their decline and preclude
    the need for expensive emergency measures later to prevent their
    extinction. In recognition of the economic and environmental importance
    of this natural resource, we urge you to fully fund the following
    programs.
        The Office of Migratory Bird Management (MBMO) provides scientific
    information and management advice on migratory birds to federal land
    managers. We believe that the President's budget request of $17.11
    million for this key program is inadequate to meet current needs. The
    budget request includes $600,000 to monitor and implement conservation
    measures for the 120 Species of Management Concern identified last
    year. This initiative, which is designed to prevent future listings of
    migratory birds under the Endangered Species Act, needs an additional
    $600,000 to fully implement the program. We also support increasing
    MBMO's budget by $500,000 to allow the FWS's seven regional offices to
    hire one additional nongame bird coordinator. These offices currently
    lack sufficient staff to advise federal land managers and implement
    nongame programs. We also request additional funding to support the
    MBMO's ongoing effort to develop national guidelines for the issuance
    of permits to take migratory birds, and to create a database for
    tracking the cumulative regional and national take of individual
    species. These activities will improve FWS's customer service and
    response time to individual permit requests.
        We also support the activities of the U.S. Fish & Wildlife Service
    International Programs (International Conservation line-item), and in
    particular the Western Hemisphere Program, which trains protected area
    managers in Latin America and makes small matching grants for education
    and grassroots conservation. This is one of the few U.S. programs that
    benefits North America. Audubon urges Congress to support an increase
    of $1 million for funding this important program.
        We also support game and nongame bird habitat acquisition programs
    such as the North American Wetlands Conservation Fund ($15 million),
    the Land and Water Conservation Fund (see below), and the Partners for
    Wildlife Program ($22.5 million).
        Audubon urges Congress to recognize the economic importance of
    nongame bird species, and to fully fund programs that benefit these
    species.
                        land and water conservation fund
        Recent reductions in appropriations for the Land and Water
    Conservation Fund will have a long-lasting negative impact on America's
    natural resources. LWCF funding protects wilderness, wetlands, beaches,
    and other open spaces for the protection of wildlife and the enjoyment
    of future generations. In many cases, direct fee acquisition from
    willing private sellers, facilitated by use of the LWCF, is the best
    way to accomplish long-term protection of priority lands. The
    Administration's $166.6 million request will not meet current needs and
    should be significantly increased.
        The LWCF state program provides funding for the conservation
    priorities of individual states. This matching grant program allows
    states to complete conservation projects at the local level and the
    matching requirement ensures that states and communities are fully
    committed to these projects. Eliminating the acquisition funding for
    state side projects in fiscal year 1996 interrupted ongoing state
    projects by removing a vital source of funds. We urge this Subcommittee
    to fund acquisition grants to states in fiscal year 1998, meeting at
    least fiscal year 1995 spending levels of $30 million. We have
    submitted our acquisition priority list separately.
                                   everglades
        As Everglades National Park approaches its 50th birthday, it also
    nears a crossroads that will determine much of the fate of its next
    fifty years. The National Audubon Society urges the Subcommittee to
    seize this opportunity and fully fund the Administration's Everglades
    Watershed Restoration budget request.
        The President has requested $139.5 million for the Department of
    the Interior's fiscal year 1998 Everglades Watershed Restoration
    programs. NAS strongly supports the proposed budget, particularly the
    $100 million requested as an initial deposit into the Everglades
    Restoration Fund (ERF).
        The ERF would provide $76 million for land acquisition, $12 million
    for research, and $12 million for modified water deliveries. It would
    be funded by royalties from oil and gas leasing on the Outer
    Continental Shelf. The use revenues generated from non-renewable
    resources to fund the protection of natural resources is long-standing
    policy, and we urge the Subcommittee to use this funding source to
    fully appropriate the ERF.
        We reiterate our appreciation to the 104th Congress for the
    discretionary funding included in the Freedom to Farm Act. While we are
    concerned with the slow expenditure of these funds, we are very
    optimistic that most, if not all, of the remaining balance will be
    allocated by October 1, 1997. Therefore, we caution the Subcommittee to
    separate the funds included in the Farm Bill from its decisions with
    respect to the fiscal year 1998 Interior appropriations bill.
                       biological resources division/usgs
        National Audubon urges Congress to pass a sustainable level of
    funding for the Biological Resources Division of the United States
    Geological Service (BRD). BRD provides sound, unbiased scientific
    information to federal agencies, state and local governments, private
    industry, and the public, which in turn use this information to make
    informed natural resource and land management decisions. To ensure the
    future of these vital programs, the President's request of $145 million
    should be increased to fiscal year 1994 levels ($166 million). We urge
    Congress to include an earmark of $300,000 for research on the impacts
    of commercial fishing on seabirds in the Pacific.
        BRD programs include 60 science centers, such as the National
    Wildlife Health Center in Madison, Wisconsin, which responds to
    outbreaks of wildlife diseases including rabies and avian cholera, and
    the Patuxent Research Center in Maryland, which monitors the health of
    the Chesapeake Bay ecosystem and the wildlife that depend upon it. BRD
    monitors waterfowl population and fisheries research programs which
    collect vital data that is used by states and the USFWS to set fishing
    catch limits and hunting bag limits, and to determine the length of
    hunting seasons. BRD is the only federal bureau that is dedicated both
    to collecting biological scientific data and to sharing that
    information with FWS regional and field offices and the States. BRD
    scientists conduct nearly one hundred percent of federal research on
    nongame birds and a significant amount of research on game birds. We
    urge you to fund BRD at $166 million so that vital, unbiased,
    scientific information continues to guide the decisions of federal and
    state natural resource managers.
                           bureau of land management
        We support full funding of Secretary Babbitt's proposal to
    reintroduce wildland fire to our forest ecosystems. Wildland fire is a
    natural and necessary component of forest ecosystems. Occasional fires
    burn excessive undergrowth, and are also necessary for many fire-
    dependent species.
                                 forest service
        We oppose funding for construction of more logging roads, whether
    by direct appropriation or through the device of ``purchaser credits.''
    Road building is one of the most environmentally destructive of all
    Forest Service activities. The Administration's proposal to discontinue
    timber purchaser credits and to alter the cost of road-building to a
    direct cost is a step in the right direction, but does not fully
    address the issue: taxpayers would still be forced to subsidize
    additional and unnecessary road-building. Audubon supports funding for
    road obliteration and for maintenance of existing roads to reduce
    stream sedimentation and prevent mud slides.
        Audubon supports a funding level of $121 million for the Forest
    Service Wildlife and Fisheries Habitat Management Program. This program
    supports restoration and improvement of important habitats, including
    old-growth, riparian, and watershed habitats.
        We oppose the Administration's proposed Forest Ecosystem
    Restoration and Maintenance Fund (FERM) as it is currently written.
    Although we support the intention to supply more funding for
    restoration, we feel the activities and funding mechanisms permitted
    under FERM are open to abuse.
                        national wildlife refuge system
        Although the National Wildlife Refuge System represents a vitally
    important investment by the American public in our nation's precious
    wildlife resources, the operating budget for the Refuge System
    represents a tiny fraction of federal spending. Approaching its 100th
    anniversary in 2003, the refuge system includes more than 92 million
    acres and over 500 refuges, offering habitat for a quarter of the
    country's threatened and endangered species, and providing vital rest
    stops, breeding grounds, and staging areas for migratory birds. In
    addition, the Refuge System offers tremendous opportunities for public
    outdoor education, wildlife viewing, hiking, hunting, and fishing and
    other compatible recreational activities. Inadequate operations and
    maintenance funds have degraded refuge habitat; consequently, refuges
    are less productive for wildlife and associated recreational
    opportunities.
        As part of its Wildlife Refuge Campaign, Audubon has recently
    launched the Audubon Refuge Keepers program (ARK) that establishes
    volunteer support groups for individual refuges. These groups provide
    support for wildlife refuges through volunteerism and educational
    outreach. Although Audubon volunteers and others can help refuges meet
    a variety of unfulfilled needs, we cannot expect volunteers on refuges
    to supplant federal O&M funding.
        In 1993, Interior's Inspector General issued a report that
    documented a $323 million backlog in maintenance projects. This figure
    has grown to $428 million, jeopardizing the integrity of the entire
    Refuge System. The President's budget proposes $192 million for refuge
    operations and maintenance, including new activities such as public
    awareness campaigns and the development of comprehensive management
    plans. As a member of the Cooperative Alliance for Refuge Enhancement
    (CARE), National Audubon supports the objective of incrementally
    increasing O&M funds for the Refuge System over the next six years (as
    outlined in Dr. Rollin Sparrowe's CARE testimony). While the CARE
    proposal will not meet desired funding levels, it will go a long way
    toward meeting the bird and wildlife conservation objectives that we
    support for the System. For fiscal year 1998, we support a funding
    level of $220 million for Refuge Operations and Maintenance.
                             endangered species act
        The Endangered Species Act was intended to prevent the decline of
    our nation's biological resources and to recover those species
    threatened with extinction. We urge you to pass adequate funding levels
    for these programs to ensure the uninterrupted operation of vital
    species recovery programs.
        The Fish and Wildlife Service is under a court order to list a
    number of candidate species by the end of this year. The $5.16 million
    requested for listing activities is barely adequate to address this
    backlog, which will cost an estimated $5 million, leaving little for
    dealing with new petitions or other listing needs. We urge you to
    increase funding for listing of species. We also support increased
    funding for the Cooperative Endangered Species Conservation Fund to
    assist states with their species conservation priorities.
        The President's request includes increased funding for the rapidly-
    expanding Habitat Conservation Plan program (HCP). In 1992, the federal
    government had approved fewer than one dozen HCPs; as of November 1996,
    they had approved 197, with another 200 in development. The federal
    government has obligations to monitor and enforce these plans, and to
    respond in the event that unforeseen circumstances require modification
    of plans. The nominal increase requested by the President is inadequate
    to fulfill these obligations.
                     national fish and wildlife foundation
        The National Audubon Society supports the Administration's request
    of $7.5 million for the National Fish and Wildlife Foundation. This
    increase of $2.5 million will allow the Foundation to address the
    growing need for partnerships to solve difficult conservation issues.
    The Foundation leverages its federal appropriations through the use of
    challenge grants. An increase in appropriations will fund the
    implementation of the Partners in Flight North American Bird
    conservation strategy.
        Thank you for your consideration of our priorities for funding for
    the Department of the Interior. With your strong leadership of this
    Subcommittee we believe that our nation's resources will be fully
    protected.
                Sincerely,
                                               Daniel P. Beard,
                                      Senior Vice President for Policy.
        Attachment.
                                     ______

         National Audubon Society LWCF Priorities for Fiscal Year 1998

                                federal projects
    Fish and Wildlife Service
        Archie Carr NWR, FL; Balcones Canyonlands NWR, TX; Bayou Savage
    NWR, LA; Black River NWR, WA; Canaan Valley NWR, WV; Chincoteague NWR,
    VA; Ding Darling NWR, FL; Don Edwards San Francisco Bay NWR; Edwin B.
    Forsythe NWR, NJ; Grasslands Wildlife Management Area, CA; Great Swamp
    NWR, NJ; Hakalau Forest NWR, HI; John Heinz NWR, PA; Klamath Forest
    NWR, OR; Lake Wales Ridge NWR, FL; Lake Woodruff NWR, FL; Long Island
    Complex, NY; Lower Rio Grande NWR, TX; Montezuma NWR, NY; Nisqually
    NWR, WA; Oregon Coastal Refuges NWR, OR; Ottawa NWR, OH; Patoka River
    NWR, IN; Pelican Island NWR, FL; Red Rock Lakes NWR, MT; Sacramento
    River NWR, CA; San Joaquin River NWR, CA; Silvio O. Conte NWR, CT;
    Stewart B. McKinney NWR, CT; Stillwater NWR, NV; Tualatin River NWR,
    OR; Upper Mississippi NWR, MN; San Diego NWR, CA; Waccamaw NWR, SC;
    Wallkill NWR, NY.
    U.S. Forest Service
        Columbia River Gorge National Scenic Area, WA; Gifford Pinchot NF,
    White Salmon/Klickitat National WSR, OR; Green Mountain NF, Glastenbury
    Tract, VT; Olympic NF, Rayonier Old-Growth Tract, WA; San Bernadino NF,
    CA; Siskiyou NF, Kalmiopsis Wilderness, OR--Silver Creek, Lloyd
    Property, Brown Mining Claim, Alleman property.
    National Park Service
        Everglades National Park, FL; Jean Lafitte National Historical Park
    and Preserve, La; Sterling Forest.
    State-side acquisitions
        Adirondack National Park--Whitney Property; Arlecho Creek, WA;
    Highlands National Forest Preserve, NJ; Rodman Ranch and Slough, CA;
    Tug Hill, NY.
                                     ______

       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-govemmental 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.
                         u.s. fish and wildlife service
        The Association generally supports the Administration's fiscal year
    1998 budget request for the U.S. Fish and Wildlife Service. The funds
    requested demonstrate a strong commitment to the nation's fish and
    wildlife resources. Presented below are the specific Association
    recommendations for the fiscal year 1997 USFWS budget.
        General Comments.--We recognize that because of the need for defect
    reduction, Congress will take steps to reduce appropriations for some
    agencies. Programs will be controlled, reduced or eliminated. A serious
    test for any program will be whether or not it fits the basic mission
    of the Service and provides substantial public benefits. The
    Association believes the programs that offer the following
    characteristics are consistent with the basic mission of the Service
    and afford the highest benefit to fish and wildlife resources and the
    cooperating state agencies: (1) establish true state/federal
    partnerships; (2) offer significant leverage of non-federal funds
    through cooperative programs; (3) support efforts to prevent species
    and their habitats from becoming threatened or endangered; (4) provide
    fish and wildlife associated outdoor recreation opportunities including
    hunting and fishing which serve a large number of people each year; (5)
    provide important economic and environmental benefits to large segments
    of the American people; (6) reinvest and enhance existing public land
    holdings/refuges; (7) empower states to best determine priority
    management action ad the state level; and (8) provide adequate
    flexibility for local program adjustment.
        We encourage Congress to measure programs against these criteria
    and to ensure that programs which measure up are funded.
        Wallop-Breaux and Pittman-Robertson.--The Association urges
    Congress to continue to protect the integrity of the Wallop-Breaux and
    Pittman-Robertson user pay/user benefit programs from diversion from
    their intended purpose. Public support of user fee programs will
    continue if the funds provided are used only for the purposes for which
    they were established. The Association strongly supports the
    reauthorization of the authority (which expires at the end of fiscal
    year 1997) to dedicate the motorboat fuel taxes from the ARTF to the
    Boat Safety Account, which funds Boating Safety Grants to the States.
    The Association also strongly supports reauthorization of the authority
    (which expires at the end of fiscal year 1997) to transfer receipts
    collected on small engine fuels from the Highway Trust Fund to the
    Aquatic Resources Trust Fund. Finally, the Association strongly
    supports reauthorization of the Clean Vessel Act (which expires at the
    end of fiscal year 1997) to continue to dedicate up to $10 million from
    the SFRA to boat pumpout programs and $10 million to boating safety.
    The Association is disappointed that the Administration is not
    supporting reauthorization of this program, which is contributing
    significantly to address the problems of overboard sewage contamination
    of inland waters.
        Based on the success of these model user-benefit/user-pay programs,
    the Association has been shepherding an effort similar to Pittman-
    Robertson and Wallop-Breaux to expand user fees on other outdoor
    recreation products. Under the Teaming With Wildlife proposal funds
    would thus be provided for a broader fish and wildlife conservation,
    recreation, and outdoor education programs in the States. This is a
    user-benefit/user-pay, incentive based program that is now supported by
    more than 1,700 organizations including both traditional fish and
    wildlife organizations and a wide array of bird watchers,
    photographers, hikers, etc.
        Through the cooperative partnerships between the state fish and
    wildlife agencies and the private sector created by these programs, we
    can begin to develop preventive, comprehensive, and broad scale
    management to ensure the vitality of fish, wildlife and plant species
    and their habitats. Taking prudent actions to prevent endangerment
    simply makes good ecological and economic sense.
        These efforts will also provide expanded outdoor recreation and
    educational opportunities for Americans to enjoy wildlife in natural
    settings and to increase their knowledge of fish and wildlife and their
    life needs and habited requirements. Public demands for these
    activities continue to increase and are unmet under existing programs.
        North American Wetlands Conservation Act Activities.--The
    Association recommends that the North American Wetlands Conservation
    Act be funded at the full authorization level of $20 million. This
    cooperative program that requires at least a 1:1 non-federal match is a
    highly successful, non-regulatory, incentive based program that has
    shown substantial results in restoring waterfowl and other migratory
    bird populations. While the $15 million requested in the budget is very
    encouraging it remains well below the authorized level of $20 million.
    The tremendous success of this program in generating in excess of a 2:1
    match from non-federal sources plus the acreage secured or enhanced
    warrants its full appropriation.
        The Association is pleased to recognize the Administration's
    continuing commitment to the implementation of the North American
    Waterfowl Management Plan, including support for the 11 United States,
    3 Canadian, and 1 International Joint Ventures. The Association
    continues to recognize the need for additional funds to enable the Fish
    and Wildlife Service to provide adequate assistance for the Joint
    Ventures. Joint Ventures are the ``engine'' of plan implementation, and
    these partnerships need to be supported.
        The Association continues to recommend that Congress appropriate an
    additional $5 million to collect data and monitor 16 priority goose and
    brant populations across North America as part of the Arctic Goose
    Joint Venture. Currently there are no operational breeding population
    surveys or pre-harvest banding programs on populations of Arctic geese.
    This information is needed for management of these migratory,
    international resources.
        The Association believes that evaluation of on-the-ground wetland
    habitat enhancement activities under the North American Plan, Farm Bill
    and other programs is extremely important to be sure which activities
    are most effective and to guide long-term efforts. We recommend that a
    minimum of $80,000 per year be allocated for a 10-year period to
    conduct essential evaluation work.
        Endangered Species.--The Association was disappointed that the
    Administration's request for Cooperative Endangered Species grants to
    the States was not higher than $7.5 million, resulting in a reduction
    of $85,000 from the fiscal year 1997 enacted. The Association requests
    a $3 million increase in the budget dealing with the state grants under
    the Cooperative Endangered Species Conservation Fund. While the
    Association recognizes the merits of and supports the additional
    requested $6 million in the fund for land acquisition under HCPs, the
    Association recommends that the increase for assistance in this fund be
    made available to the states through the cooperative agreement process
    with the individual states deciding the best mix of inflammation,
    incentives and acquisitions to achieve habitat conservation and
    recovery objectives, and not dust for fee title acquisition.
        The Association supports the $6.1 million increase in consultation
    and this increase should be available to the states for direct support
    of state nongame/wildlife diversity program data services which are
    used in designing conservation plans.
        Wildlife Nongame Grants to States.--The Association strongly
    advocates Congressional support through appropriation of the full
    authorized funding level for both the 1980 Fish and Wildlife
    Conservation (Nongame) Act (authored at $5 million) and the 1992
    Partnerships for Wildlife Act (titled the Wildlife Conservation and
    Appreciation Fund authorized at $6.25 million). This remains a high
    funding priority for state fish and wildlife agencies in fiscal year
    1998; the Association has supported federal-state nongame funding for
    many years. Without a prevention strategy for these species, we will
    continue to see species move into the threatened or endangered species
    category with all the expenses and disruption that entails.
        The Association is disappointed that the Administration's request
    of $800,000 for the Partnership for Wildlife Act is only level with the
    fiscal year 1997 enacted. Because increases in federal funds are
    matched equally by both state and private monies, this is a very
    effective program. We expect these cooperative proposals to increase
    dramatically in the years ahead. The Association recommends an
    additional $1.2 million be appropriated for this program.
        Migratory Bird Management.--Association commends the Service for
    the $1.5 million increase but remains concerned that the base budget
    for the management of migratory birds is still below an adequate level.
    Inflation and increased operating costs have escalated and any enhanced
    funding in recent years has been earmarked. Additional funding is
    needed to facilitate meeting program objectives for migratory bird
    conservation. The Association recommends an additional increase of $1
    million to address this need.
        In audition, the Association supports the Service's commitment to
    Adaptive Resources Management but stresses that strengthening data
    bases is necessary. Adaptive Resource Management offers excellent
    potential for strengthening federal/state relations.
        The Association is supportive of efforts to amend the U.S./Canada
    Migratory Bird Convention. We are pleased that an agreement has been
    reached and amendments successfully completed. Since part of the
    agreement focuses on the need for proper monitoring, the Association
    feels strongly that funds must be available to properly monitor
    subsistence harvest in Alaska.
        Nongame migratory bird populations need additional monitoring to
    assure that management of declining species precludes having to rely on
    the Endangered Species Act. Monitoring would target marshbirds and
    other bird groups in order to develop the same quality data available
    for waterfowl. The Association supports the request for an additional
    $1.5 million for this effort. Many of these efforts are conduced in
    partnership with state fish and wildlife agencies, particularly through
    the Partners in Flight program for the conservation of songbirds and
    raptors that migrate between our temperate forests and grasslands to
    the tropical regions in Lain America. This is a class example of acting
    now to conserve many of these declining species thereby preventing them
    from becoming endangered. This is a cost efficient way to conduct our
    conservation efforts.
        Since the early 1980's, there has been little effort devoted to
    correcting data deficiencies related to the management of webless
    migratory game birds. There is a demonstrated need for better
    population and harvest survey information for species such as woodcock,
    mourning doves, sandhill cranes and rails. The Association wishes to
    stress the importance of webless migratory game bird management as an
    integral part of the Services' programs and responsibilities, and as
    this program evolves, necessary budgets must increase as well.
        Management for migratory game birds needs additional funding to
    fully implement the Harvest Information Program, which will add 28
    states in 1998; and Adaptive Harvest Management, which was initiated in
    1996 to enhance monitoring capabilities in support of waterfowl and
    migratory webless gamebirds. These funds would enhance management
    capabilities to balance competing objectives of population growth and
    responsible recreational uses. The Association requests $1.5 million
    for these programs.
        Refuses and Wildlife.--The Association recognizes and supports high
    priority land acquisition for Wildlife Refuges for the purpose of
    protecting nationally important wetlands, and fish and wildlife habitat
    (including threatened and endangered species) for public use and
    enjoyment. However, in years of continued budget shortfall and
    underfunding of the operation and maintenance activities of existing
    Refuges, we question the wisdom of continued land acquisition of new
    Refuges without providing adequate funding for existing refuge
    operation and maintenance. The Association strongly supports the $13.8
    million increase requested for the operation and maintenance of the
    National Wildlife Refuse System.
        The Association continues its long history of support for an
    increase in the funding requested for operation and maintenance of the
    National Wildlife Refuge System. Upkeep activities addressing the
    critical needs of the refuge system are vitally important. High
    priority should be given to maintaining refuge maintenance and
    operations at a level that adequately protects wildlife resources and
    provides for wildlife dependent recreational uses. The Association also
    encourages Congress to consider the appropriate chances in legislation
    to permit funding of operation and maintenance requirements from the
    Land and Water Conservation Fund. The Association supports the pilot
    changes in the collection and disbursement of recreation/entrance fees
    charged on refuses. All of the fees collected would be available for
    refuge operations and maintenance on the Refuges where they are
    collected.
        The Association recommends full funding for the Refuse Revenue
    Sharing Fund; the fiscal year 1998 budget request is only an estimated
    62 percent of the full funding level. These funds are used to offset
    the loss of tax revenues to state and local governments. Full funding
    will ease financial burdens to counties containing refuges, thus
    fulfilling the governments obligations pursuant to the Refuse Revenue
    Sharing Act.
        In the fiscal year 1997 Appropriations Conference Report, Congress
    requested information regarding the use of annual traps on National
    Wildlife Refuges. While some question the use of certain types of
    traps, no widely applicable alternative trapping devices are available,
    in spite of pioneering research being conducted by USDA-APHIS-ADC at
    their Fort Collins Research Center, and by a coalition of interests in
    Vegreville, Alberta, Canada. The U.S. Fish and Wildlife Service has not
    contributed to either of these research efforts. Given the significant
    role trapping plays in the management of the National Wildlife Refuge
    system, the Association recommends that $100,000 be added to the
    Services' budget for a portion of the methods developments research at
    USDA's National Wildlife Research Center at Fort Collins.
        Private Lands Program.--The Association recognizes that
    partnerships with private landowners are essential in advancing fish
    and wildlife conservation and supports the $266,000 increase in the
    Partners for Wildlife targeted to specific areas of primary federal
    concern such as migratory birds, wetlands, and threatened and
    endangered species. The Association also urges these funds to be an
    additional increase, and not to redirect funds from an already
    established source within the base budget. The Association urges the
    Fish and Wildlife Service to cooperate with and be responsive to the
    needs identified by state fish and wildlife agencies In implementing
    these programs. In the past the Association has voiced concerns about
    adequate coordination of the Partners for Wildlife Program with ongoing
    efforts of the states to provide assistance to private landowners. The
    Association believes that planned expenditures in the Partners for
    Wildlife program involving private land should be targeted for
    enhancement of habitat such as wetlands that primarily benefits
    migratory birds. There are many opportunities for wetland enhancement
    projects that would benefit waterfowl and other migratory birds.
        Fisheries.--The Association is pleased to see the Administration's
    budget reflect an increasing dedication to the Fish and Wildlife
    Service's fisheries programs, particularly, an increase in the fish and
    wildlife management line item within the fisheries division budget.
    Additionally, the Association applauds the recognition by the Service
    of the need for financial support for whirling disease research under
    the Biological Resources Division of the USGS and work in partnership
    with the Great Lake states and the Canadian government to conduct
    genetic and other research on lake trout and sturgeon stocks and to
    mitigate the impact of nonindigenous species. In the Service's fiscal
    year 1997 budget request, these proposals were included within a
    broader initiative which also addressed the needs of coastal fisheries
    on the Atlantic and Gulf of Mexico coasts. The IAFWA recognizes that,
    though not in the President's fiscal year 1998 request, the needs of
    Atlantic and Gulf anadromous and riverine fisheries management will
    continue to exist through the next fiscal year, as well as the
    Service's authority and responsibility to meet those needs. Working in
    partnership with the states and interstate fish commissions, the IAFWA
    recommends an additional $2 million for research, management and
    enforcement of anadromous coastal fisheries programs by the Fish and
    Wildlife Service.
        Other Fish and Wildlife Service Budget Items.--Recognizing the
    essential and important research and field work that the Service has
    conducted concerning contaminants through the Natural Resource Damage
    Assessment Program, the Association supports the increase of $628,000
    for fiscal year 1998. Because of the reliance by States and tribes on
    information from this program, this increase will improve the Service
    program and those of its partner States and tribes. Given that the
    program is the backbone for all federal damage assessment programs
    within USDI, however, the Association strongly supports an additional
    $1.4 million in funding for this program.
        The Washington State Ecosystem Project, which is entering its
    seventh year, is designed to evaluate innovative approaches to reverse
    the decline in farmland wildlife, wetlands and riparian areas in the
    state of Washington. It shows promise of substantial benefits to a wide
    variety of fish and wildlife by providing habitat diversity on private
    lands. The Association supports the continuation of this project at
    $1.483 million for fiscal year 1998 and recommends that $500,000 be
    appropriated to continue the South Carolina Coastal Ecosystem
    Initiative. The Association also strongly supports a $1.7 million
    increase to the Fish and Wildlife Service to implement the South
    Florida Ecosystem Restoration Initiative.
        The Northwest Forest Plan is a comprehensive approach to managing
    forests in the Pacific Northwest. The U.S. Fish and Wildlife Service
    participates with other federal and state agencies in carrying out this
    program. The Service's responsibilities under this plan focus on
    endangered species and habitat restoration concerns. It is essential
    that the Service continue to be funded to be able to participate as a
    full partner in this integrated program. The Association supports the
    request for an increase of $1.6 million to meet its responsibilities
    under the Northwest Forest Plan.
        The Association supports the Administration's request of $5 million
    to support the National Fish and Wildlife Foundation. In the last 11
    years the Foundation has funded nearly 1,800 fish, wildlife and plant
    conservation projects many of which have been done in cooperation with
    state natural resources agencies. These projects have leveraged over 2
    non-federal dolled for every federal donor appropriated. Further, the
    Foundation utilizes no federal money to fund its administration.
        The Association supports FWS' continued production of the
    ``Wildlife Review'' and ``Fishers Review'' publications vital to
    research and management of natural resources.
        The Association appreciates the increased request of $750,000 for
    hydropower licensing and mitigation studies. This reflects the huge
    burden placed on the Service by the many FERC relicensing studies
    required as a large number of licenses expire and must be relicensed.
    The Association strongly urges Congress to provide this additional
    funding to allow the Service to adequately review and propose
    hydropower licensing/relicensing requirements. Adequate information is
    essential before long-term licenses are granted.
        The Association recommends that the Bears Bluff Field Station be
    rehabilitated as Bears Bluff Fisheries Coordination Office to serve as
    a National focus point for Service operations in the restoration and
    recovery of the endangered shortnose sturgeon and the protected
    Atlantic sturgeon. The unique culture expertise and ability to produce
    sturgeon can be used to complement state and management group interest
    in restoration and protection of depleted sturgeon resources. The
    Association recommends the addition of $1 million for site
    rehabilitation and construction and $1 million for collaborative
    culture and fisheries studies with state partners of North Carolina,
    South Carolina, Georgia, and Florida.
        Border 21.--At the February 1997 Mexico, Canada, and United States
    Trilateral Commission meeting, 15 high priority Border XXI projects
    were targeted for implementation. Geographically, these projects are
    widely distributed along the entire United States/Mexico Border and all
    13 projects have been identified by individual United States-Mexico
    states as being border-wide issues. At this time, there is no funding
    identified in the U.S. budget for projects. The Association recommends
    that $1 million be appropriated to initiate high priority international
    projects in 1998. This increase should be made in the General Activity
    Portion of the Service budget under ``Border 21.''
        NAFTA Projects (Borderlands).--Over the past three years,
    collaboration between the U.S. Fish and Wildlife Service (FWS) and
    Mexico's Director General for Wildlife (DGW) has achieved important
    objectives in the conservation and management of Mexico and United
    States wildlife and protected areas. The NAFTA initiative continues to
    support habitat for many species shared by the United States and
    Mexico. These are species whose habitats would continue to decline in
    number and habitat quality without this support. NAFTA funds have in
    the past been leveraged at a 1:4 ratio with an apportionment of
    $702,260 resulting in the development of over $3 million in non-U.S.
    match.
        The Association recommends that NAFTA initiative funding levels be
    increased to $850,000 which, combined with existing funds, covers only
    50 percent of the amount requested by project proposals. This increase
    should be made in the General Activity portion of the Service budget
    under ``International Conservation.''
                        bureau of land management [blm]
        The BLM budget with minor exception is a continuation of last years
    efforts. Reductions in staff have resulted in increased demands and
    fewer reports on accomplishments. Consolidation of accountable budget
    categories from 48 to 19 has made it increasingly difficult for state
    fish and wildlife partners to obtain adequate information on specific
    programs. The Association is concerned about these changes, and
    particularly concerned that funding for such programs as BLMs riparian
    initiative and Challenge Cost Share moneys may suffer in the
    competition for funds if such moneys are not dedicated at the activity
    level. The Association continues to believe that it is important that
    BLM track and report annual performance objectives and accomplishments
    on these critically important sub-activities in their budget.
        The BLM has made special efforts to communicate its management
    objectives through such documents as Fish and Wildlife 2000 and
    national habitat management plans. These plans establish measurable
    objectives for fish and wildlife programs on public lands managed by
    BLM. While progress has been made in the 1998 budget to improve habitat
    and aquatic performance indicators and to list natural resource
    opportunity projects by state, the current budget structure is still so
    broad it fails to tie these objectives directly to the budget process.
    The Association continues to believe that it is essential that BLM
    clearly relate its management goals to a specific, usable budget
    structure and site specific measurable performance objectives.
        Land Resources.--The emphasis on Rangeland Restoration efforts
    throughout the west is essential to bring these lands back to their
    full productive capacity, and the Association is pleased to note the
    emphasis on this program. Similarly, the Association strongly supports
    BLM's commitment to increase cooperative efforts between the United
    States and Mexico under the North American Free Trade Act of 1994.
    Additionally, the management of Wild Horses and Burros has been an
    ongoing concern of the Association, and prior budgets have, in our
    opinion, been inadequate to allow BLM to successfully implement its
    Strategic Plan for Management of Wad Horses and Burros, which calls for
    achieving proper management levels of these species by 1998. The
    Association is therefore pleased with and commends BLM for its fiscal
    year 1998 budget request, and fully supports the recommended increase
    of $2.8 million in this budget to control the growth of the wild horse
    and burro populations that compete with native wildlife population and
    can cause serious range deterioration.
        Wildlife and Fisheries.--The Association commends BLM on continuing
    to identify the Wildlife and Fisheries Program as a budget activity
    separate from Threatened and Endangered Species. The Association
    recommends an increase of $500,000 to implement fisheries management
    and BLM's share of the Recreational Fisheries Initiative because we
    feel the proposed 1998 budget request of $500,000 is inadequate to
    address current demand. Public demand is strong for continuing
    fisheries habitat improvement on the public lands through such high
    priority partnership agreements as the Lake Havasu project, in
    conjunction with the Bureau of Reclamation, the states of California
    and Arizona, and private groups including Anglers United. This type of
    effort benefits a large segment of the public, and provides maximum
    return on federal expenditures. Additionally, the BLM is working
    closely with state fish and wildlife agencies on both Partners in
    Flight (terrestrial nongame birds) and watchable wildlife efforts. We
    urge continuation of these important conservation programs that address
    species and habitat needs before significant declines require further
    efforts. We continue to be very concerned with riparian habitats and
    support the intensive riparian inventory progress of 76 percent made to
    this point. However the progress made to directly improve identified
    degraded riparian habitats is woefully inadequate. The Association
    recommends an increase of $1 million to begin to adequately address the
    significant backlog of riparian habitat recovery opportunities.
        Threatened and Endangered Species.--Management of a number of
    candidate and federally listed fish populations in the Columbia and
    Snake River Basins of Oregon, Washington, and Idaho continues to be
    critical to avoid further declines and potential listing of some
    species, and to reduce or mitigate impacts to others. These efforts
    fall largely under the agreements resulting from the Pacific Northwest
    Salmon Summit of 1992. BLM efforts to improve resource conditions in
    this region and to implement interagency agreements is strongly
    supported. The Association supports the fiscal year 1998 identified
    species priorities including Desert Tortoise in Arizona, bull trout in
    Idaho and Montana and swift fox and mountain plover in Montana and the
    fiscal year 1997 effort made towards California Condor reintroductions
    but does recommend an additional $400,000 to fully implement the BLM
    portion of the Desert Tortoise Recovery Plan in cooperation with Clark
    County, Nevada and the Nevada Habitat Conservation Plan.
        Recreation Management.--The Association commends BLM proposals to
    coordinate Interior agency management of public lands protected under
    the California Desert Protection Act.
        Finally the Association strongly supports the BLM's participation
    in such interagency efforts as the Eastside Ecosystem Management
    Project in the Columbia River Basin. Interagency efforts to identify
    resource concerns and management options at that level should provide
    significant benefits to decisionmakers as they strive for balance
    between competing land uses. The Association strongly endorses BLM
    participation in these interagency efforts, and firmly believes that
    efforts such as these will result in improved understanding of
    alternatives facing decisionmakers concerning the wise stewardship of
    public lands. More specifically, the Association supports funding for
    the Seeking Common Ground (SCG) effort of the BLM at a level of
    $250,000. This nationally sponsored partnership includes the
    Association, the BLM, USFS, NFWF, the American Farm Bureau, the
    National Rife Association, Rocky Mountain Elk Foundation and the
    Wildlife Management Institute. SCG partners goals include the support
    for demonstration projects that: Improve rangeland conditions; promote
    individual stewardship that improves resources; improve communications
    between rangeland users; reduce conflict between livestock and
    wildlife; and encourage problem solving at the local level.
                           u.s. forest service [usfs]
        The Association urges Congress provide a balanced budget for the
    Forest Service, reflecting the full range of needs as identified in the
    forest plans. The public benefits economically and environmentally as a
    result of equal consideration for all National Forest resources. In
    1995, wildlife and fish related recreation on national forests resulted
    in $3.68 billion of net public benefit. That equals a $37.27 return on
    each dollar invested in fish and wildlife.
        National Forest System.--Funding for fish and wildlife habitats on
    National Forests has languished for more than three years. Considering
    the increasing amount of private matching funds made available to this
    program since 1986, the President's budget for fiscal year 1998 is very
    disappointing. The Association supports additional investments in
    wildlife and range programs that will result in significant economic
    and social benefits.
        Get Wild Program.--This program focuses on terrestrial and semi-
    aquatic wildlife and serves as an umbrella for 10 national wildlife
    emphasis areas. In the President's fiscal year 1998 budget, funding for
    this program is increased only $1.637 million from fiscal year 1997
    enacted. Thus, the program would remain more than $9 million below the
    fiscal year 1995 level. It is estimated by the Forest Service that full
    implementation of these opportunities wound cost $54.447 million in
    fiscal year 1998. This is a true habitat protection and restoration
    program that maintains wildlife populations and improves rangelands by
    providing the proper mix of several multiple uses on federal lands. The
    Forest Service's effort is to ensure the sustainability of terrestrial
    species and the habitats on which they depend. The Association supports
    this program and recommends that Congress provide a funding level
    consistent with fiscal year 1995 at $38 million.
        Challenge Cost-Share Program.--The Fish and Wildlife Challenge
    Cost-Share Program, a cooperative partnership effort, is funded at
    $17.2 million for fiscal year 1998, which is nearly $4 minion less than
    the Service's cooperators contributed in fiscal year 1997. This is a
    very successful program, with non-federal fish and wildlife
    organizations providing considerably more than the Service for habitat
    improvement projects on national forests. The Association strongly
    supports increasing the Service's share of this program to the fiscal
    year 1997 cooperators' level of $21 million.
        Threatened and Endangered Species Programs.--The Association urges
    Congress to continue supporting this program by approving the
    President's request of $27.218 million for fiscal year 1998. Assuring
    compliance with the Endangered Species Act creates significant impact
    on the states. Consequently, funding should be provided to help support
    state Endangered Species Act consultation with the Forest Service. The
    Association urges that current funding be used to help support state
    fish and wildlife agency efforts so that more of the national priority
    needs can be met.
        Inland Fisheries.--The Association supports funding this program at
    least at the fiscal year 1998 level recommended by the President of
    $17.157 million. These funds would provide for habitat initiatives that
    protect and restore inland fish habitat that will enhance the
    productivity of National Forest System aquatic resources.
        The Association recommends that the anadromous fisheries program be
    funded in fiscal year 1998 at the requested level of $22.521 million.
        Rangeland Management.--This continues to be one of the most
    underfunded of Forest Service programs. Therefore, we strongly support
    the proposed increase of $7.376 million and urge that the increase be
    used to complete NEPA analyses, where they are needed, compliance
    monitoring, and the completion of improvements that alleviate riparian
    and other rangeland Grazing problems.
        Forest Research.--Scientific studies provide information and
    technology needed to protect, manage, use, and sustain the natural
    resources of this nation. The Association urges Congress to fund forest
    research at the proposed fiscal year 1998 level of $179.7 mullion.
    Funding at this level will continue to provide natural resource
    decision makers with a wide variety of information to make natural
    resource use and management decisions.
        The Association agrees that there is a need to provide an
    appropriate level of funding for the Forest Service Ecosystem
    Management Program. However, during past fiscal years, millions of
    dollars have been transferred from the Wildlife and Fisheries and Range
    programs into Ecosystem Management. It is not at all clear how these
    funds will be used for the planning, monitoring and survey work
    required for viable fish, wildlife and range programs. In the past,
    these activities were funded directly from the individual budgets which
    were readily identifiable. In Ecosystem Management, the goals and
    objectives are not identified. The Association cannot support such a
    vague approach to planning and monitoring. We recommend that the
    Ecosystem Management division be directed to: (1) identify its goals
    and objectives; (2) determine its needs and institute an evaluation
    system; and (3) inform cooperators on how the funds will be spent and
    on what programs. Unless this is done, support will continue to erode.
        State and Private Forestry.--The Association continues to be
    strongly supportive of programs that assist private landowners and
    states to improve and enhance fisheries and wildlife habitat, protect
    watershed values and contribute to the economic and environmental well
    being of urban and rural America. Therefore, we support proposed
    funding levels for Forest Stewardship, Stewardship Incentives, Urban
    Forestry, Forest Legacy, and Cooperative Lands Fire Management. We also
    remain supportive of Forest Health programs, but suggest that Forest
    Health programs should include a wider array of components, such as
    forest health from a fish and wildlife perspective and ensure forest
    health protection for state and private lands.
        Seeking Common Ground.--The Association supports funding the
    Seeking Common Ground effort in the Forest Service at $250.000. This
    nationally sponsored partnership includes the Association, the Forest
    Service, Bureau of Land Management, National Fish and Wildlife
    Foundation, American Farm Bureau Federation, National Rifle
    Association, Rocky Mountain Elk Foundation, and Wildlife Management
    Institute. SCG goals include support for demonstration projects that:
    improve rangeland condition; promote individual stewardship that
    improves public and private resources; improve communications among
    rangeland users; reduce conflict between livestock and wildlife;
    encourage problem-solving at the local level.
                         bureau of indian affairs [bia]
        The Association continues to be concerned by the wholly inadequate
    wildlife and parks budget of the Bureau of Indian Affairs. We are,
    however, pleased that the wildlife and parks base request of $28.105
    million for fiscal year 1998 demonstrates a positive move away from the
    traditional process of requiring that the tribes request individual
    Congressional add-one to meet on-going year-to-year wildlife and parks
    base budget needs. The Association strongly supports the base request
    in fiscal year 1998 of $26.105 million.
        The fiscal year 1998 budget includes $372,000 for fish hatchery
    maintenance, an amount which barely recognizes the $14 to 15 million
    backlog in required hatchery maintenance. The Association strongly
    recommends an increased funding level for fiscal year 1998 and out
    years with the objective of eliminating the fish hatchery maintenance
    backlog by fiscal year 1999
        The Association has in the past strongly supported the
    Administration's request for fish hatchery rehabilitation to
    rehabilitate tribal fish hatcheries and replace capitalized equipment
    for the highest priority projects. While the Administration has not
    requested any money in fiscal year 1998, the Association strongly
    recommends that Congress appropriate continued level (to fiscal year
    1995) funding (approx. $1.5 million) for this effort in fiscal year
    1998 to replace failing systems and modernize tribal fish hatcheries to
    enable them to optimize fish production. This funding would help
    satisfy vital tribal fishery needs.
        The Association believes that tribal lands are integral to the
    maintenance and recovery of threatened and endangered species.
    Presently, the majority of tribes are unable to be parties to candidate
    species studies and conservation agreements due principally to lack of
    funding. The Association strongly supports an increase of $400,000 to
    the central operations line item for the tribes to participate in all
    phases of the endangered species recovery process. This would enable
    tribes to begin to address listed species needs and recovery of species
    that all Americans benefit from.
        While the Association is opposed to diversion of federal aid funds,
    it is committed to adequate federal funding to provide for professional
    management of tribal fish and wildlife resources. The Association
    believes that Native American tribes have identified legitimate funding
    needs for fish and wildlife on millions of acres of tribal lands and
    that adequate funding will preserve and enhance the cultural heritage
    of Native American Tribes while providing positive economic benefits,
    and ensuring the conservation of significant fish and wildlife
    resources.
                      biological resources division, usgs
        The Association supports the stated goals for the BRD, but we are
    concerned that inadequate progress has been made to refine the mission
    to provide the applied research necessary to complement existing state
    programs and emphasize partnerships. The Association wishes to
    reemphasize the importance of developing a partnership between BRD and
    state fish and wildlife agencies. A meaningful, co-equal partnership
    with the state fish and wildlife agencies is essential if the BRD is to
    achieve its goal of facilitating natural resources conservation based
    on sound applied science. The proposed fiscal year 1998 budget
    principally reflects an emphasis on meeting the needs identified by
    Department of Interior land management bureaus, units of the federal
    government that manage only 20 percent of the land area of the United
    States. Biological research needs for the 80 percent of the land area
    of the United States managed by states are largely ignored.
        The proposed budget includes $6.5 million for new initiatives while
    proposing reductions in areas of critical concern to states, in
    particular research on warm water fisheries, wetlands, and waterfowl.
    In addition, no increases are proposed within the following BRD program
    categories: Migratory Game Birds, Wildlife Disease, Chemical and Drug
    Registration, Partnership for Public Aquaculture, and Research on
    Endangered Species. While we support the increase to exotic invasive
    species, noxious weed management, salmon habitat research, and Great
    Lakes fisheries, the Association recommends that the BRD be directed to
    consult with state fish and wildlife agencies to insure adequate
    attention is directed to these other research needs and that no
    reductions in funding or the quality of service be permitted.
        Cooperative Research Units.--The Association strongly supports the
    Coop Units. The Coop Units continue to be one of the best examples of
    cooperative research for wildlife and fisheries in our nation. This is
    at the heart of goals of providing scientific data that is essential
    for land management decisions. The proposed budget includes a $1
    million increase for the Cooperative Fish and Wildlife Research Unit
    program. While we applaud this increase, it represents restoration of
    only half of the reductions from the previous 2 fiscal years. The
    Association recommends that sufficient funding intended for new
    initiatives be reprogrammed to the Coop Unit program to fill all 21
    currently vacant positions and provide adequate support for these
    positions. The Association supports the creation of new Cooperative
    Research Units with the understanding that existing units will be fully
    staffed and funded. We recommend that these Units be cart of the
    fisheries and wildlife programs and that they work with State fish and
    wildlife agencies to carry out applied research on fisheries and
    wildlife issues.
        The BRD bird banding laboratory and migratory bird research office
    at Patuxent is critical to the multi-government and non-government
    Partners in Flight effort. The Association recommends continuing
    support.
        One area where state-BRD cooperation is critical is in the
    registration of fishery therapeutants. The BRD has received $500,000
    for this work and needs to make every effort to use these funds in
    cooperation with state contributions. This effort will take at least
    five years and will require the support of state and private interests
    to support BRD research.
        The Association is disappointed that cooperation with the State
    fish and wildlife agencies in identifying critical research needs to
    solve on the ground resource problems continues to be minimal. We have
    reminded BRD that over 80 percent of the Programs now within BRD were
    originally in the U.S. Fish and Wildlife Service. The Association
    recommends that BRD be directed to work with state fish and wildlife
    agendas to identify and address issues impacting fish and wildlife. The
    Association further recommends that state fish and wildlife agency
    personnel be included in developing the research program of BRD,
    including serving as members of the Science Board of BRD. Otherwise,
    the BRD research program will almost surely not serve the applied
    research needs of fish and wildlife agencies.
                          national park service [nps]
        The Association is encouraged by the proposed $65.714 million
    increase in Operations of the National Park System but is disappointed
    that no funds are requested for state grants for the Land and Water
    Conservation Fund in fiscal year 1998. We strongly encourage Congress
    to restore at least fiscal year 1995 level funding at $30 million for
    this important partnership effort. The federal-state cooperative effort
    to provide outdoor recreation opportunities though the Land and Water
    Conservation Fund is seriously undermined when only the federal portion
    is funded.
        The Association supports full implementation of and the progress
    being made in concessions reform providing those funds Reduced remain
    available to the National Park Service. Likewise, we support continued
    revision of fee polices to allow establishment of service fees on the
    basis of facility usage and operational requirements. As with
    concessions reform, monies generated by fee restructuring should
    continue to be available to the National Park Service for specific on-
    the-around activities.
        The Association recognizes the importance of the South Florida
    ecosystem and supports funding for restoration efforts in the
    Everglades National Park, the Big Cypress National Preserve, and the
    South Florida Restoration program. We support the proposal to fund the
    NPS share of the Everglades Watershed Restoration project ($100
    million) as supportive of fish and wildlife and other resource
    interests. We recognize it may not be feasible to fully fund this
    initiative.
        The Association generally supports the proposed National Park
    Service Land Acquisition budget ($69.9 million), but recognize that
    budget reduction may prevent this level of funding.
        The Association supports proposed funding of natural resource
    initiatives (approximately $9 million) including air, water quality,
    habitat, and plant and wildlife distribution assessments provided the
    National Park Service closely coordinate these programs with state
    resource management agencies.
                                     ______

    Prepared Statement of Ken Poynter, Executive Director, Native American
                            Fish & Wildlife Society

        Mr. Chairman and Distinguished Committee Members: My name is Ken
    Poynter, current Executive Director of the Native American Fish &
    Wildlife Society (Society) and an enrolled member of the Passamaquoddy
    Tribe of Maine. I would like to thank you, on behalf of the Society,
    for the opportunity to provide testimony to the Appropriations
    Subcommittee on the Interior. I will be requesting appropriations from
    the Department of the Interior, Bureau of Indian Affairs (BIA),
    Wildlife & Parks budget (under Other Recurring Programs) for continued
    funding at the organization's fiscal year 1997 level of $488,000.
        The Society is a national non-profit organization dedicated to the
    sound management and prudent use of tribal fish and wildlife resources.
    The organization serves as a network among tribes throughout the
    country, including Alaska and provides training and technical
    assistance to tribes in natural resource planning and enhancement.
        The Society includes a membership of 136 tribes, which includes 32
    Alaskan Native villages and non-profit corporations, 1,200 individuals,
    numerous regional Commissions and Native organizations who are
    supportive of tribal fish and wildlife development and of the Native
    American Fish & Wildlife Society. All Society members share the common
    goal of protecting tribal sovereignty in the management and use of fish
    and wildlife resources.
        Due to our effective method of providing technical assistance,
    periodic trainings and general support to our members, the Society had
    an increase of 22 new member tribes to the organization in 1996. This
    represents a 17 percent increase in tribal memberships in fiscal year
    1996 and a 110 percent increase since 1995 and attests to the strong
    tribal support and the positive impact the organization has made in
    Indian Country. It is noteworthy to mention that because of our. large
    tribal membership base, the funding received through the federal
    appropriations process serves, at a minimum, 136 separate tribal
    governments.
        To date (in fiscal year 1996), the Society has provided technical
    services and assistance to over 133 tribes, 22 non-profits, 14 states
    and 11 different federal agencies in the areas of fish and wildlife
    management, education and environmental protection. Seven regional
    conferences, including Alaska, were held with associated technical work
    group meetings including: one national conference; four summer youth
    practicums; workshops on natural resource program development;
    development of fish and game codes, integrated resource management;
    fisheries; wildlife; wildlife management modeling, mutual gains
    negotiations, grant writing, ecosystem management, and environmental
    and conservation law enforcement. In conjunction with these activities,
    four quarterly newsletters (with a circulation of over 1,200 each), an
    annual report, promotion publications, informational management
    brochures and resource funding brochures were distributed nationwide.
        The Native American Fish & Wildlife Society represents a wealth of
    experience and information regarding management of fish and wildlife
    resources on Indian lands. Society members embody a diverse group of
    lay people, fishery biologists, wildlife biologists, foresters,
        conservation law enforcement officers, and land use managers and
    planners who currently manage tribal land bases throughout the country
    including Alaska.
        The concept of the Society is based on the necessity for an
    organization to assume a leadership role to maintain the technical
    proficiency of tribal fish, wildlife and natural resource programs.
    Because of its organizational structure, the Society is able to
    efficiently respond to specific requests from tribes for technical
    assistance regarding the development, enhancement and wise use of their
    natural resources.
        Members of the Society are involved in technical initiatives
    sponsored by the Society, as well as development of tribal technical
    fisheries, wildlife and recreation management initiatives critical to
    the preservation and protection of tribal resources. In addition, the
    Society continues to respond to the needs of its members in the area of
    technical assistance and program support.
        The Society has developed an organized structure to assist in
    documentation of tribal fish and wildlife management efforts from the
    tribal perspective, and the techniques currently being used
    successfully by tribal governments. Our members have immediate access
    to technical assistance gleaned from an extensive in-house natural
    resource library, a computerized data base entitled ``Tribal Watershed
    Forum'' (containing information on the number and variety of water
    related programs that have been initiated nationally on Native lands)
    and the Technical Services Office which is dedicated to assisting
    tribal governments and individual members with their technical needs.
        Collectively, American Indian tribes have a land base of
    approximately 94,000,000 acres, that includes thousands of miles of
    streams and rivers, and 730,000 lakes and impoundments. The wise use
    and management of these vast resources will only ensure that they
    remain intact for many generations to come. And because our work is so
    important, it is essential that we continue to receive funding so that
    we can carry on our goal to improve the general welfare of Indian
    people through charitable, educational, and other fish and wildlife
    related activities.
        The Society is currently the only national Native American
    organization that provides technical assistance to American Indian
    tribes, federal, state and local governments as well as private
    industry to develop and implement sound policies, ordinances,
    regulations, and laws to protect, preserve, conserve and prudently use
    and manage fish, wildlife and other natural resources. In addition, it
    supports and conducts natural resource and conservation law enforcement
    trainings as well as annual educational opportunities for Native
    American youth.
        fiscal year 1996 marked the fourth year that the Society has
    initiated the most pro-active budget in the organization's 16-year
    history. Funding has been set aside for each region to identify and
    conduct trainings and workshops in various aspects of natural resource
    management. Each region identifies its training needs and the logistics
    of the workshop is coordinated and funded by the Society's national
    office.
        Regional conferences feature forums and seminars that share
    information between tribal entities and programs as well as focusing on
    current trends in resource management. Such efforts have had a
    recognizable as well as a positive affect on the tribal resource base.
        Regional and National Youth Practicums are conducted by the Society
    for Native students who are interested in natural resource management
    careers. Such youth programs are an effective and unique method of
    providing hands on experience and instruction to these promising young
    people. The intent of these programs is to encourage their pursuit of
    further education and careers in natural resource management. To attest
    to the program's value and effectiveness, nine past Practicum students
    are currently in universities and colleges throughout the country
    pursuing degrees in natural resource management.
        As mentioned in both our oral and written testimony of 1995 and
    1996, the Society, in recognition of potential future funding cuts and
    an over-all lack of federal funding for tribal natural resource
    management, has aggressively moved forward and established the Native
    American Fish & Wildlife Foundation. It is important to note that our
    assertion to form this new entity was not mere rhetoric, but a sincere
    desire to actively work to become a self sufficient organization.
        The Society has shown its commitment to this endeavor by conducting
    grass roots fund raising activities and investing those funds
    exclusively to the project. To date, approximately $191,000 has been
    raised and utilized to hire a full-time Foundation Coordinator with the
    remainder being used to establish a permanent endowment.
        The Foundation has since been incorporated in the state of Colorado
    and has received IRS tax exempt status from the Internal Revenue
    Service. The new entity's Board of Trustees are currently being
    recruited and selected. Major fund raising activities continue on an
    on-going basis with an emphasis on securing large donations from the
    private sector (major corporations, foundations and the public at
    large).
        With the establishment of the Foundation, and once the 10 million
    dollars for the permanent endowment has been raised, the Society will
    no longer require federal funding and will, at the same time, be in the
    position to provide funding to tribes, via a small grants program, for
    their natural resource management efforts. It is important to note that
    once this is accomplished, the Society will be the first national
    Indian organization in the history of this country to become totally
    self supporting.
        At this time, and until we reach our goal of self sufficiency,
    Congress should view the federal funds appropriated to the Society as
    an investment which will be offering a return in the future via grants
    to tribal governments for natural resource management from the
    Foundation. It is critical that the Society continue to receive our
    current level of funding so that our important work with tribes,
    states, federal agencies and the private sector is not diminished while
    we work towards self sufficiency.
        Due to the current level of funding, the organization is in a
    position to better meet the needs and address the issues facing fish
    and wildlife management in Indian Country. The Society has been able to
    increase its outreach efforts (which is evident in the 110 percent
    increase of tribal memberships realized since fiscal year 1995), double
    the size of the annual Native American Environmental Awareness Summer
    Youth Practicum, more than double the number of trainings conducted in
    each Region, and provide adequate support for the seven regional
    conferences including the annual national conference. To reiterate, the
    Society is requesting a Total of $488,000 for fiscal year 1997.
        The Society is appreciative of the support and funding that we
    received for fiscal year 1997. Reinstatement of the organizations
    funding, back to the fiscal year 1995 level of $488,000, by both the
    House and Senate attests to the strong support and indispensable need
    for an organization, like the Society, to be working with Indian
    Country.
        The fact that the current level of funding ($488,000) allows the
    organization to deliver those services and technical assistance to the
    many individual members and member tribes as requested, the Society is
    not asking for additional dollars for fiscal year 1998. Instead, we
    request that our current level of funding be sustained for fiscal year
    1998 so that we may continue to support tribes in the area of natural
    resource management while we diligently work towards becoming self-
    sufficient.
        In addition, the Society encourages legislation that allows tribes
    to participate in Federal Aid Funding and including tribes in any
    proposed future legislation addressing the Federal Aid program.
        The Society supports the White Mountain Apache Tribal Wildlife and
    Outdoor Recreation Program funding request for the following programs:
    Conservation Law Enforcement in the amount of $511,000; and Endangered
    Species Management in the amount of $180,000.
                                     ______

      Letter From Robert D. Brown, President, the National Association of
                   University Fisheries and Wildlife Programs
                                   College Station, TX, March 17, 1997.
    Senator Slade Gorton,
    Chairman Senate Appropriations Subcommittee on Interior,
    U.S. Senate, Washington, DC.
        Dear Senator Gorton: The National Association of University
    Fisheries and Wildlife Programs (NAUFWP) submits this statement in
    support of more adequate appropriations for important research and
    other essential activities to be carried out through the Biological
    Resources Division (BRD) of the U.S. Geological Survey.
        Members of the NAUFWP include 55 Universities. We seek to enhance
    public understanding of the needs for improving natural resource
    management and to advance the science and practice of sustainable uses
    and management of the resource base. Our efforts focus on cooperative
    work with partners and customers to advance research, education,
    extension and management to benefit people and communities throughout
    the country.
        Results from the Roper Starch fifth annual survey of adult
    Americans, prepared for the National Environmental Education and
    Training Foundation and released in December 1996, illustrate pressing
    needs for BRD's research, education and outreach programs. Key findings
    of adult views on natural resources provide an overall context in which
    to consider the specific figures in the President's proposed fiscal
    year 1998 budget. Adult Americans believe: Environmental resources
    should be conserved in ways that balance economic growth while
    protecting the environment and human health; natural resources can be
    managed in ways that protect wildlife and ecosystems while humans
    benefit from their planned use; Federal government spending should be
    shifted to environmental programs from other areas; and concerns for
    the environment and management of natural resources can be responded to
    by expanding education programs designed to raise current low levels of
    knowledge about the environment, such as to maintain and improve water
    quality.
        Within this context of public views and needs for research,
    education, extension and management, the NAUFWP supports continuing and
    strengthening BRD programs. Stronger programs are required to be more
    responsive to needs of the public and resource managers. Four specific
    recommendations are offered for the fiscal year 1998 appropriations for
    the BRD.
        1. Continue to support levels of funding that allow the BRD to
    respond to pressing needs to generate information on natural resources
    and their uses to (1) prevent adverse impacts on the resource base, (2)
    strengthen resource management, (3) educate and train students and
    adults, especially resource managers, (4) perpetuate sustained
    ecological, economic and social benefits, and (5) enhance the quality
    of life. Positive responses to citizens needs would be timely.
        2. Provide at least $145 million and 1,699 FTEs for the BRD in
    fiscal year 1998, as proposed in the President's budget. Regrettably,
    even this amount will not permit filling all vacancies in existing
    Cooperative Research Units. As you know, the states have public trust
    responsibilities for wild living resources within their boundaries.
    Both timely information and graduates from the Units are essential to
    help the states respond effectively to their responsibilities.
    Similarly, improved responses are required to support science that
    enhances the management of federal lands, restores Great Lakes
    fisheries and their habitats, and improves management of natural
    resources in other geographic locations.
        3. Provide firm support for the Cooperative Research Units, with
    their enviable track record of invaluable products and services
    generated for more than 60 years, as well as the essential Bird Banding
    Laboratory and Breeding Bird Survey. This unique Laboratory and Survey
    provide helpful scientific information available from no other source.
        4. Support research on the toxicity of various endrocrine-
    disrupting compounds. Improved understanding of these compounds is
    required to prevent further adverse impacts on living creatures,
    including people.
        Please make this statement a part of the official hearing record of
    the Subcommittee on Appropriations for Interior.
                Sincerely,
                                               Robert D. Brown,
                                                             President.
                                     ______

        Prepared Statement of Wayne Pacelle, Vice President, Government
            Affairs, the Humane Society of the United States [HSUS]

        The HSUS requests funding recommendations for the Fish and Wildlife
    Service [FWS] as follows: The Administration's $78.8 million request
    for implementing the Endangered Species Act [ESA] is inadequate; $1
    million and $400,000 are recommended for the African Elephant
    Conservation Act and the Rhino and Tiger Conservation Act,
    respectively; $830,000 for Land Acquisition; $100,000 for the Wild Bird
    Conservation Act; $500,000 for the Exotic Bird Conservation Fund; and
    $13.85 million for law enforcement. The Bureau of Land Management [BLM]
    requires $18.7 million for the Wild Horse and Burro Program and
    $300,000 specifically for wild horse immunocontraception.
                  fish and wildlife service/endangered species
        The HSUS emphatically supports a strong and generous
    reauthorization of the ESA. We believe that many of the ESA's supposed
    deficiencies can be blamed on inadequate funding. Consequently,
    generously funding the ESA will significantly improve its success at
    saving species and preventing or solving potential conflicts. We
    believe that the Administration's request for $78.8 million for
    implementation of the ESA by the Fish and Wildlife Service is
    inadequate, especially with respect to funds for listing new species.
    There is a backlog of literally hundreds of species for whom
    consideration of listing has been dangerously delayed, threatening the
    species themselves and leaving land owners in a state of perpetual
    uncertainty. The FWS now is also carrying growing responsibilities for
    monitoring endangered and threatened species on federal lands and for
    designing and implementing Habitat Conservation Plans.
        The HSUS supports funding for the African Elephant Conservation Act
    at the Administration's requested level of $1 million. However, we
    would strongly recommend that the Fish and Wildlife Service use this
    money strictly for elephant conservation and not to support programs,
    such as Zimbabwe's CAMPFIRE program, that promote elephant hunting and
    reinstatement of the international commercial trade in ivory, both
    which harm elephant populations.
        The HSUS also supports funding for the Rhino and Tiger Conservation
    Act at the Administration's requested level of $400,000.
                   fish and wildlife service/land acquisition
        The HSUS recommends the earmarking of $830,000 for direct
    acquisition and conservation easements for Red Rock Lakes National
    Wildlife Refuge. This magnificent refuge is the heart of Montana's
    Centennial Valley, a paradise for waterfowl and large mammals, as well
    as a critical corridor between populations of threatened grizzly bears
    and, potentially, endangered gray wolves. Red Rock Lakes is under
    immediate threat of development on its boundaries, development that
    will degrade its wetlands and sharply reduce its value to wildlife.
            fish and wildlife service/office of management authority
        The HSUS believes that additional funding in the amount of $100,000
    is needed for the Service's Office of Management Authority for
    permitting activities related to the Wild Bird Conservation Act [WBCA].
    Implemented in 1992 after a unanimous vote by the Congress, the WBCA
    promotes the conservation of exotic birds in trade by ensuring that
    imports into the United States do not jeopardize wild populations.
    Prior to its enactment, the U.S. was the world's largest importer of
    birds and a contributor to the decline of many species in the wild. The
    implementation of the WBCA in fiscal year 1998 requires, among other
    things, the monitoring of trade levels and the biological status of
    species in the wild, the approval of sustainable use management plans
    submitted by foreign countries, and the processing and granting of
    import permits and petitions for actions pursuant to the WBCA.
        We also request $500,000 for the Exotic Bird Conservation Fund
    established by the WBCA. These funds would be used to assist other
    countries in the conservation of their indigenous wild birds. Funding
    this initiative will provide the FWS with an additional tool to
    encourage conservation of exotic birds in their countries of origin.
                   fish and wildlife service/law enforcement
        Additional funding in the amount of $13.85 million is required to
    improve the FWS's ability to effectively monitor wildlife trade,
    intercept illegal trade, and improve the effectiveness of the Clark R.
    Bavin National Fish and Wildlife Forensics Laboratory.
        Millions of animals, and their parts and products, travel through
    U.S. ports each year. The United States is the world's largest wildlife
    trading country, importing $773 million and exporting $256 million each
    year. The illegal trade into and out of the U.S. is estimated to be
    worth between $100 million and $250 million annually. The FWS is
    supposed to monitor this trade, and intercept illegal trade, by
    physically inspecting wildlife shipments. About 77,000 shipments are
    processed annually.
        A December 1994 U.S. General Accounting Office (GAO) report gave
    the Service poor marks for monitoring wildlife trade and intercepting
    illegal wildlife trade. The report found that only about 25 percent of
    wildlife shipments are physically inspected, and, as a result, only
    about 10 percent of illegal shipments are detected. Under staffing and
    limited resources were cited as causing the Service's poor performance.
    Consequently, we believe that an additional 60 Special Agents, 12
    Wildlife Inspectors, and appropriate support staff are needed to
    adequately administer the law enforcement program.
        In addition, the Bavin Laboratory, which provides wildlife
    forensics for the Service, has experienced an over-whelming increase in
    caseload since its inception and will need to double its current staff,
    an increase of 30 persons, and will need $6 million for construction of
    additional facilities.
        We request an increased allocation to the FWS's Washington Office
    Division of Law Enforcement for the purpose of funding special
    investigations by the Branch of Special
        Operations. Investigations of complex international and domestic
    wildlife crimes, which are multi-regional, as well as multi-national,
    particularly cases relating to violations of the Endangered Species
    Act, Convention on International Trade in Endangered Species of Wild
    Fauna and Flora (CITES), Marine Mammal Protection Act and other
    relevant laws, can only be conducted by the Branch of Special
    Operations. As the most productive unit within the Division of Law
    Enforcement, the Branch of Special Operations experienced numerous
    successes in 1996, which resulted in the sentencing of wildlife
    smugglers.
       bureau of land management/wild horse and burro program/fertility
                                control research
        Recent public and press attention has focused on the serious
    deficiencies of the Bureau of Land Management's Wild Horse and Burro
    program. We believe that, in principal, this is a highly valuable
    program: America's wild horses are a public trust greatly beloved by
    the American people, and any indication that these animals are being
    treated inhumanely generates immediate public outrage. Consequently,
    The HSUS recommends that the Administration's budget request of $18.7
    million for the Wild Horse and Burro program be fully funded. Within
    the program, however, funds should be shifted from the adoption program
    to on-the-ground management of horses and their range, especially wild
    horse monitoring, range monitoring, and habitat restoration.
        The BLM currently spends more than $1,000 for each wild horse that
    is removed from public lands and processed through the Adopt-a-Horse
    program. Even at that level of spending, the Bureau cannot guarantee
    humane treatment and adequate care to the 4,000 or more wild horses
    adopted each year.
        The HSUS believes that fertility control, if used as part of a
    scientifically-based and equitable range management plan, can reduce
    human-caused stress on wild horses and burros, improve care for animals
    entering the adoption program, and reduce the costs of wild horse and
    burro management. The National Park Service is already using
    immunocontraception to control feral horse herds at Assateague Island
    National Seashore, and has proposed its use at two other sites.
        Funds appropriated by Congress in fiscal year 1993-97 have made
    significant contributions to the development of a one-shot
    immunocontraceptive vaccine to prevent pregnancy in western wild horses
    for at least one full year, and provided principal support for two
    successful field trials on Nevada wild horses. In the first (1992)
    field trial, 131 mares were contracepted; in the 1996 field trial, 267
    mares were treated with either one-or two-shot vaccine preparations,
    with an apparent success rate of about 95 percent for both
    preparations.
        We remind Congress that every foal not born potentially saves the
    Bureau over $1,000 in adoption costs, and thus, that, even in the
    research phase, the vaccine is highly economical. Consequently, we
    request $300,000 from Congress in fiscal year 1998 to support further
    research in wild horse immunocontraception. These funds would support
    the refinement of a one-shot vaccine that is effective for at least two
    years, long-term studies needed before the immunocontraceptive vaccine
    can be used on a broad scale, and at least two additional field
    projects that should reduce wild horse population growth, reduce the
    number of horses that enter the Adopt-a-Horse program, and thereby
    recover the cost of the research.
        The HSUS offers the following recommendations for modifications to
    the Wild Horse and Burro Program that will alleviate the troubling
    problems that exist in its current implementation:
        (1) Allocate a 50-percent increase in funding for contraception.
        (2) Raise the adoption fee to a minimum of $250 for a horse or
    burro and allow competitive bidding.
        (3) Reverse the current trend toward reducing the number of wild
    horses on the range. Reductions in wild horse numbers in recent years
    are threatening the viability of many herds.
        (4) Restore the voice of the public in influencing decisions. The
    BLM has been using the ``full force and effect'' regulation, which was
    primarily intended for emergency situations, to effectively remove the
    public's opportunity to influence decisions to remove horses from the
    range.
        (5) Include in title transfers a contractual, binding agreement
    stating that the horse or burro will not be sold for slaughter and
    prohibit slaughter plants from accepting BLM freeze branded horses.
        (6) Implement a post-adoption, voluntary monitoring system using
    the national network of humane societies.
        These reforms will benefit the program in general, the animals
    themselves, and the public. The HSUS stands ready to work with the BLM
    on this issue.
                                     ______

    Prepared Statement of Christine Stevens, Secretary, Society for Animal
                             Protective Legislation

                                    wildlife
        The urgency of an increase of at least $7 million for the Law
    Enforcement Division of the U. S. Fish and Wildlife Service has become
    more serious this year than ever before. The enormous increase in
    organized crime directed towards wildlife makes it absolutely essential
    that the Congress provide effective deterrents. This means the Special
    Agents, with the necessary backup, must be increased so that criminals
    do not have a free run.
        Please don't forget that importation of drugs is intimately tied
    with importation of live wildlife, much of it endangered, and products
    from animals illegally killed for the trade. The United States is
    facing unprecedented attack by professional smugglers tied in with such
    groups as the Chinese Triads, the Russian Mafia and the Japanese
    Yakuza, as well as our home-grown organized criminals, and we must
    fight back.
        I respectfully urge this Subcommittee, which has funded Interior
    over the years, to recognize the crisis and give Fish and Wildlife
    Service Law Enforcement the tools it so desperately needs to stem the
    flow of criminally acquired and smuggled wildlife.
                                   elephants
        This Subcommittee provides funds for the African Elephant
    Conservation Act under which grants are made to American and foreign
    groups. Unfortunately a foreign group known as CAMPFIRE (Communal Areas
    Management Programme For Indigenous Resources) in Zimbabwe is trying to
    overturn U. S. policy with respect to the African elephant.
        In 1989, the U.S. played a leading role in obtaining Appendix I
    (endangered) status for the African elephant? whose populations had
    been decimated by poachers and smugglers for the ivory trade. The large
    majority of African nations demanded Appendix I status because they
    were being robbed of the elephants who lived within their borders.
        The Convention on International Trade in Endangered Species of Wild
    Fauna and Flora (CITES) first tried to curb this criminal activity
    through the use of quotas, but after several years of utter failure,
    the nations belonging to CITES voted to end the international trade in
    ivory by placing the elephant on Appendix I. But Zimbabwe's CAMPFIRE,
    egged on by Africa Resources Trust (ACT), a trophy hunting organization
    based in London, has lobbied in this country to overturn the ban on
    international trade in elephant parts and products. Rhodesia, a
    formidable colonial power named for the British explorer Cecil Rhodes,
    became Zimbabwe in 1980, but Rhodesia lives on in the ART Board.
        We urge this distinguished Subcommittee to omit any funding for
    CAMPFIRE or organizations such as Safari Club International which
    donate to CAMPFIRE under the African Elephant Conservation Act. Not
    only is CAMPFIRE funded under this Act, but by USAID in separate
    government funding which is now under serious investigation.
        With the scheduled tenth meeting of the CITES Parties in Zimbabwe
    June 9-20, 1997, it is essential that the United States uphold its
    established policy with respect to the African elephant and other
    Appendix I species currently being eyed by the commercial ivory trade
    and commercial trophy hunters.
        Projects funded under the African Elephant Conservation Act, which
    falls into your jurisdiction, must not be geared to overturning
    American policy.
                            steel jaw leghold traps
        I wish to commend the Subcommittee on its wise 1996 Report language
    relating to steel jaw leghold traps. It is most regrettable that the
    proposal envisaged was preempted by the Fish and Wildlife Service.
        The Service compounded this egregious behavior by advising and
    encouraging USDA's Animal Damage Control operatives to use an enormous,
    sensationally cruel steel jaw leghold trap with teeth on a pathetic
    six-month-old wolf pup who is part of the scheme to reintroduce wolves
    to Yellowstone National Park. The reintroduction scheme was paid for by
    U.S. taxpayers, as was the trap and the ill-advised, ill-conceived and
    basically cruel actions of Fish and Wildlife Service employees. The
    American public does not want its taxes to be used for such a purpose.
    In a November 1996 public opinion poll conducted by Caravan Opinion
    Research Corporation of Princeton, New Jersey, 74 percent of the
    American public said they want steel jaw leghold traps banned.
    Certainly they should not be compelled to contribute to their use.
        Here are notes on the cruel suffering of the wolf pup, documented
    by a veterinarian and a government employee:
        July 11.--``* * * foot severely swollen from carpus down, puncture
    wound with pus flowing out at distal carpus, severe bruising and soft
    tissue trauma.''
        July 14.--``* * * still not eating.''
        July 15.--``* * * swelling still pronounced * * * more necrotic
    tissue present.''
        July 16.--``Still not eating.''
        July 17.--``Much tissue loss and self mutilation of toes (gone).
    Foot dead. Foot should be removed or wolf put down.''
        July 18.--``* * * food not eaten.''
        July 19.--``Removed left front leg * * *''
        We urge you to adopt Report language denying funds for any use of
    steel jaw leghold traps under the wolf reintroduction scheme so that
    further inhumane treatment of introduced wolves is not repeated by Fish
    and Wildlife Service personnel. This young wolf was subjected to
    intense torture for at least 30 hours during which there was no
    inspection of the trap. Most states require at least 24-hour
    inspection, but the inept judgment of these wolf transplanters and
    their tolerance for the pain of animals led to this typical result of
    the use of steel jaw leghold traps. It is rare for a trapped animal to
    be kept under veterinary surveillance for a week after having been
    trapped, so this record gives us an idea of what this most cruel of all
    traps inflicts on its victims. I trust you will take the action which
    lies within your jurisdiction. You can be sure the vast majority of
    your constituents will welcome a humane decision.
                                     ______

          Prepared Statement of Susan H. Gunn, Director of Budget and
                     Appropriations, the Wilderness Society

        The Wilderness Society appreciates this opportunity to present our
    views on the fiscal year 1998 funding needs of natural resource
    programs within the Committee's jurisdiction. The Wilderness Society
    has made increased funding of the four land management agencies and the
    Land and Water Conservation Fund one of its highest priority issues for
    the upcoming years. The following document outlines an initiative to
    increasing the 602(b) allocation to the Interior Appropriation
    Subcommittee by $570 million in fiscal year 1998 to meet critical
    environmental needs within these programs.
                        public lands funding initiative
    Introduction
        The public lands of the United States--our National Parks, Forests,
    Grasslands, and Wildlife Refuges--are held in trust for current and
    future generations of Americans. Since the election a number of
    organizations from the environmental, recreation, and conservation
    community have been meeting to coordinate an initiative to address the
    funding needs of America's public lands. The public lands community
    plans to make this a long-term campaign that will help frame the budget
    debate while focusing on the message that we can balance the federal
    budget without abandoning America's public lands.
        We plan to convince a majority in Congress that this is an area
    where additional cuts are not justified, and further, that incremental
    increases in the public lands budget are necessary to protect the
    nation's forests, parks, refuges, and wildlife. A successful effort
    will mean that we can maintain accessibility to these lands and improve
    their ecological health.
        This proposal establishes annualized budget goals for several
    Department of Interior agencies and the U.S. Forest Service. The
    environmental, conservation, and recreation community will also be
    working toward eliminating ecologically damaging federal programs and
    subsidies.
    Budgetary growth: an incremental approach
        The following table depicts needed increases above the fiscal year
    1997 spending levels for the 602(b) Interior and Related Agencies
    Budget Allocation. The table identifies the budgetary increases
    necessary to accommodate public land management over a 6-year period.
    Under this scenario, much needed funding for currently unmet public
    land conservation needs can be achieved by fiscal year 2003 through
    annual increases in the 602(b) budget allocation.
        The fiscal year 1997 Interior Appropriation, less emergency funds,
    is $12.4 billion in budget authority. The first line in the table
    (Resulting Allocation) presents, in real dollars, the recommended
    annual funding increases relative to fiscal year 1997 and not the total
    allocation for Interior and Related Agencies Subcommittee. The second
    line represents the funding additions to fiscal year 1997 levels for
    the agencies and programs specified in this document.

      INCREASED 602(b) ALLOCATIONS: AN INCREMENTALAPPROACH TO BUDGET GROWTH INCREASES OVER FISCAL YEAR 1997 FUNDING
                                                         LEVELS
                                                  [Billions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                               Fiscal years--
                                                      --------------------------------------------------------------
                                                         1997     1998     1999     2000     2001     2002     2003
    ----------------------------------------------------------------------------------------------------------------
    Resulting allocation.............................   $12.40   $12.97   $13.33   $13.68   $14.04   $14.39   $14.68
    Yearly 602(b) increase...........................  .......    $0.57    $0.36    $0.35    $0.36    $0.35    $0.29
    Increase from prior fiscal year (percent)........  .......     4.60     2.78     2.63     2.63     2.49     2.02
    Total 602(b) increase............................  .......    $0.57    $0.93    $1.28    $1.64    $1.99    $2.28
    ----------------------------------------------------------------------------------------------------------------

        The proposal speaks to the funding needs and program areas of the
    agencies and programs identified herein only. It does not account for
    or anticipate changes in funding levels for other agencies or programs
    that also receive funding through the Interior and Related Agencies
    Appropriations bill. Nor does it anticipate specific cost savings or
    budget offsets that may be achieved through reductions in other
    programs areas within the Interior and Related Agencies Appropriations
    bill. It further does not address funding needs for natural resource
    and environment programs and agencies which receive funding through
    appropriation bills other than Interior and Related Agencies.
    Increased funding needs
        In developing our recommendations, we examined budget priorities
    for the four federal land management agencies: Fish and Wildlife
    Service, National Park Service, U.S. Forest Service, and the Bureau of
    Land Management. In addition, we considered Land and Water Conservation
    Fund needs. Increases outlined for each allocation are to be achieved
    over a six-year period.
                Fish and Wildlife Service: proposed increase of $495
                        million.
        Increases are needed for the Fish and Wildlife Service in National
    Wildlife Refuge System (NWRS) Operations and Maintenance (O&M) and
    Endangered Species activities.
        The National Wildlife Refuge System is the only federal public land
    system dedicated primarily to the conservation of fish and wildlife.
    Chronic underfunding of Refuge Operations and Maintenance has led to
    the degradation of refuge habitat and wildlife populations and put at
    risk popular wildlife oriented recreation programs. The Fish and
    Wildlife Service has identified a $440 million maintenance backlog and
    an annual operations deficit of $150 million.
        More than 200 refuges have no staff and 97 percent of refuges
    operate at minimum funding levels with substantial maintenance
    backlogs. Exotic species, inadequate water supplies, and other problems
    plague many refuges, undermining the ability to meet wildlife
    objectives. Programs to help recover endangered, threatened, and
    candidate species, restore habitats, and address resource threats are
    left unaccomplished on an increasing number of stations. Continued
    failure to address this severe funding shortfall will jeopardize the
    integrity of the NWRS.
        Funding for the Endangered Species Act has been chronically
    inadequate and the Agency has experienced an increase in tasks related
    to endangered and threatened species. For example, the Fish and
    Wildlife Service has become increasingly responsible for scientific
    monitoring for the conservation of endangered and threatened species on
    federal lands in addition to the increased costs related to designing
    and implementing Habitat Conservation Plans. The Fish and Wildlife
    Service has been sharply criticized for failing to complete its duties,
    yet it has never been given adequate funds to accomplish its goals. The
    result is implementation that is sometimes scientifically weak or
    frustratingly slow for permit applicants.
        Adequate funding will promote speedier, less costly recovery, and
    smooth implementation, ultimately minimizing conflict surrounding ESA.
    In addition, it is important to note that the anticipated
    reauthorization of the Endangered Species Act could result in new
    obligations under the law. The funding recommendations herein cover
    only current obligations and may require adjustment pending the outcome
    of reauthorization.
                Bureau of Land Management: proposed increase of $150
                        million.
        The BLM needs increased funding for Management of Lands and
    Resources. Because of the scope and diversity of its land base, the BLM
    faces the opportunities and challenges of managing for over 3,000
    species of vertebrates and 25,000 plant species in habitats ranging
    from the Pacific sea coast to the arctic tundra to the Sonoran Desert.
    BLM lands offer a variety of recreational opportunities and cultural
    resources and generate significant associated revenues. Yet, many
    species in each of these habitats are experiencing degraded habitats
    and declining populations. Likewise, many public land recreational
    opportunities are either hampered by degraded resource conditions or
    are themselves the cause of public land resource damage.
        Ecological and cultural resource monitoring, restoration, and
    protection must be elevated to a top priority for the BLM. To that end,
    funding for riparian restoration and protection, fish and wildlife
    management, and wilderness management must be increased, as well as
    funding for the management of cultural resources and recreational
    activities including staff support on public lands.
                Forest Service: proposed increase of $225 million.
        Estimates of Forest Service funding needs include Recreation,
    Ecosystem Research, Fish and Wildlife, and Trails. Funding in these and
    other critical areas fell short in fiscal year 1997, and estimates
    indicate a need for incremental increases in funding for trails,
    recreation, and ecosystem research. Fish and Wildlife activities are
    also underfunded including migratory bird management, and Partners in
    Flight. The condition of the trails, campgrounds, restrooms, and other
    recreation facilities at our nation's forests is key to the public's
    experience outdoors. Maintenance and reconstruction funds have not kept
    up with increased use. For example, the Forest Service estimates that
    the value of the backlog of trail reconstruction work has climbed to
    over $267 million.
        The Forest Service's trail system is larger than all the other
    trail systems in the nation with over 124,000 miles of trail. Because
    of inadequate funds, the Forest Service has been deferring 20 to 30
    thousand miles of trail reconstruction every year since the 1980s.
                National Park Service: proposed increase of $600 million.
        The National Park system today faces tremendous threats and
    challenges, including degradation of cultural, scenic, and natural
    resources, air and water pollution, internal and external development,
    and overcrowding. These threats have a direct impact on the quality of
    the National Park experience and the National Park Service's ability to
    protect and manage America's Park resources.
        The Park Service's ability to adequately address these threats is
    limited by insufficient funding for monitoring, scientific assessment,
    research, resource protection and interpretation, and staff support. In
    constant dollars, the total National Park Service congressional
    appropriation declined by more than $200 million between 1983 and 1997.
    At the same time, Congress assigned the Park Service more than 400
    additional construction projects than it requested--costing more than
    $867 million. In addition, Congress designated nine new heritage areas
    at the end of the 104th Congress without appropriating money to fund
    them. Finally, the Agency needs sufficient funds to enable it to
    address ongoing operations and maintenance needs and certain backlogged
    maintenance needs as well.
                Land and Water Conservation Fund: proposed increase of $750
                        million.
        Congress has provided for an annual revenue stream of $900 million,
    funded primarily from OCS receipts, for federal and state land
    acquisition and recreation projects. Yet the average funding for these
    purposes over the last seventeen years has been approximately one-
    fourth of the authorized level.
        Full appropriation of the Land and Water Conservation Fund is
    critical to provide for investment in natural and cultural resources
    conservation, watershed protection, wildlife habitat, and recreational
    resources. Unrestrained development and dramatic population increases
    threaten the quality of existing public lands. The need to purchase and
    conserve additional available land and water resources is increasingly
    urgent. This is true at the federal and state level, and the Congress
    should recommit to statewide assistance by funding the State Grant
    Program.
                USGS Biological Resources Division: proposed increase of
                        $60 million.
        Increases are needed to supply the science support necessary to
    understand the biological resources located on federal lands, to assess
    the environmental changes impacting on these biological resources, and
    to develop recommendations for management actions necessary to conserve
    the lands for the future. No integrated monitoring strategy for Federal
    Lands exists which can inventory critical biological species and
    communities at the local level and suggest solutions to land managers
    for conservation of these resources. Additionally, Federal trust
    resources such as migratory birds and endangered species, common to all
    Federal lands are coming under additional pressure through degradation
    of wildlife habitats; more emphasis on science support for adaptive
    management recommendations for system management in aquatic resources,
    and integrate biological information with geologic, hydrologic, and
    demographic databases.
    General
        Particularly where the BLM and Forest Service are concerned, there
    are any number of environmentally beneficial cost savings and budget
    offsets that could be achieved by increasing revenues for extractive
    uses (mining, grazing) and by eliminating costly subsidies. In
    addition, commercial user fees and concession fees are also potential
    sources of revenue and cost offsets.
        While it is clear that substantial savings and budgetary offsets
    can be achieved through these types of reforms, the purpose here is not
    to develop a comprehensive package of recommended budget cuts and
    offsets, but to identify the unfunded and underfunded spending
    priorities that are being targeted by the public lands community.
                                     ______

    Letter From Andy Sawyer, Chapter Chair, Sierra Club Mother Lode Chapter
                                        Sacramento, CA, April 11, 1997.

    Re Fiscal year 1998 land and water conservation fund appropriations/
            Stone Lakes National Wildlife Refuge.

    Hon. Slade Gorton,
    Chairman, Interior Appropriations Subcommittee,
    U.S. Senate, Washington, DC.
        Dear Chairman Gorton and Subcommittee Members: The Mother Lode
    Chapter of the Sierra Club, on behalf of its 14,000 members and 10
    affiliated local groups, respectfully requests that the Subcommittee
    appropriate $5.5 million dollars for land acquisition at the Stone
    Lakes National Wildlife Refuge in fiscal year 1998 (fiscal year 1998).
    In addition, we urge the Subcommittee to increase overall
    appropriations from the Land and Water Conservation Fund (LWCF) in the
    fiscal year 1998 Interior and Related Agencies Appropriations Bill.
        The Mother Lode Chapter (MLC) of the Sierra Club encompasses much
    of central and eastern Northern California, including the northern
    portions of California's Central Valley and Sierra Nevada. MLC and its
    members have long been active in preserving open space and critical
    habitats throughout this area. We therefore appreciate the efforts of
    your subcommittee to secure funding important land acquisition projects
    through the LWCF. Your efforts have helped ensure the conservation of
    thousands of acres of open space, recreation lands, and wildlife
    habitat highly valued by our members. These resources will provide
    invaluable recreational and educational benefits to future generations
    of Northern Californians.
        We know that your work demands difficult choices and that you have
    always given conservation needs the highest consideration. MLC is
    concerned, however, that if funds available from the LWCF are limited
    to levels most recently appropriated available funds will be
    insufficient to meet the growing public recreational and wildlife
    habitat requirements associated with increasing human population
    pressures. We fear that without adequate funding, conservation
    opportunities may be lost. We therefore recommend that appropriations
    from LWCF be increased substantially over last year (fiscal year 1998)
    and eventually reach the Fund's mandated level of $900 million per
    fiscal year. Only in this way can important public acquisitions keep
    pace with increasing public needs.
        In our region we are dealing with these issues through local
    efforts to preserve open space and habitat at the Stone Lakes National
    Wildlife Refuge (NWR). Stone Lakes NWR is located in southern
    Sacramento County, only a few miles from urban Sacramento. Since its
    inception in 1994, Stone Lakes has been able to offer limited hiking,
    canoeing, wildlife viewing and conservation education opportunities to
    the two million residents of the Sacramento metropolitan region.
        The Refuge, which is adjacent to the Sacramento River, contains
    remnants of the Central Valley's once vast complex of permanent and
    seasonally flooded wetlands flanked by riparian forests, oak woodlands,
    and annual grasslands. The Central Valley region is projected to
    experience 40 percent of the growth in the state's expected tripling of
    population by the year 2040; the already intense development pressures
    on remaining natural areas will only increase, rendering future land
    acquisitions prohibitively expensive. If appropriations are postponed
    the opportunity to purchase property at an acceptable cost will be
    lost. The MLC urges the Subcommittee to appropriate $5.5 million
    dollars from LWCF in fiscal year 1998 for U.S. Fish and Wildlife
    Service property acquisitions from willing sellers within the Stone
    Lakes NWR authorized area. The appropriations will protect essential
    wildlife habitat that would otherwise be lost to land speculation and
    development. We also believe these acquisitions eventually will enable
    the USFWS to expand the wildlife-compatible recreational and
    educational opportunities available to the public at Stone Lakes NWR.
        Thank you for your consideration of these comments. We are grateful
    for this opportunity to include our written testimony in the official
    hearing record.
                Sincerely,
                                                   Andy Sawyer,
                                                         Chapter Chair.
                                     ______

         Letter From Gary O. Fregien, President, California Parks and
                            Conservation Association
                                        Sacramento, CA, April 10, 1997.

    Re Fiscal year 1998 funding for Stone Lakes National Wildlife Refuge.

    Hon. Slade Gorton,
    Chairman, Senate Interior Appropriations Subcommittee,
    U.S. Senate, Washington DC.
        Dear Senator Gorton: By this letter, the California Parks and
    Conservation Association (CalParks) is asking for your support for the
    proposal to provide the Stone Lakes National Wildlife Refuge with $12.8
    million in funding for fiscal year 1998. This is the amount sought by
    the refuge's principal citizen support group, the Stone Lakes Refuge
    Alliance.
        As you may know, Sacramentans have been working for the protection
    of this valuable land for more than twenty-five years. Once the site of
    a proposed Corps of Engineers flood control project, then the target of
    a private developer's 50,000-resident ``new town'' proposal, this
    relatively small but immensely valuable property is now one of the
    newest national wildlife refuges.
        CalParks seeks substantial funding for fiscal year 1998 because the
    refuge is in need of significant support in its early years. Located
    just south of the City of Sacramento, it lies in the path of new
    urbanization that can only increase land values and thus inflate the
    cost of expanding the refuge to the boundaries called for in the
    approved 1992 plan.
        The $5.5 million which we seek for land acquisition in fiscal year
    1998 will go only for land purchased from willing sellers, people who
    the Fish and Wildlife Service needs to deal with quickly before they
    (the owners) get discouraged at government delays and are courted by
    developers offering more for their land than they are asking today. You
    should know that this refuge ranked third in the nation on the Fish and
    Wildlife Service's land acquisition priority list for 1998. Nationwide,
    this acquisition is very important, very high in priority.
        The $0.3 million requested for operations and management will be
    used not only for the day-to-day activities which keep the refuge
    going, it will also be used to fund programs to enhance the
    productivity and carrying capacity of the refuge lands so as to
    increase their value for native and migratory wildlife. Even today, the
    refuge's modest operations budget has allowed limited public use of the
    facility, with an emphasis on educational programs for local school (K-
    12) groups.
        The $7 million sought for the construction of a conservation
    education facility will allow the refuge to provide educational and
    recreational opportunities for an estimated 200,000 visitors annually.
    This facility will educate the public in conservation and environmental
    matters and, to some degree, bolster the local economy through the
    expenditures of non-local people who visit the refuge and the facility.
        You may be assured that this refuge has widespread support in the
    Sacramento region, from public officials, organizations and
    individuals. We urge the support of you and your subcommittee to
    continue the development of this important wildlife refuge.
                Sincerely,
                                               Gary O. Fregien,
                                                             President.
                                     ______

           Letter From Patrice Cox, President, Sacramento Open Space
                                        Sacramento, CA, April 10, 1997.

    Re Fiscal year 1998 funding for Stone Lakes NWF.

    Hon. Slade Gorton,
    Chairman, Senate Interior Appropriations Subcommittee,
    U.S. Senate, Washington, DC.
        Dear Senator Gorton: By this letter, Sacramento Open Space is
    asking for your support for the proposal to provide the Stone Lakes
    National Wildlife Refuge with $12.8 million in funding for fiscal year
    1998. This is the amount sought by the refuge's principal citizen
    support group, the Stone Lakes Refuge Alliance.
        Sacramentans have been working hard for the protection of this
    valuable land for more than twenty-five years. Once the site of a
    proposed Corps of Engineers flood control project, then the target of a
    private developer's 50,000-resident ``new town'' proposal, this
    relatively small but immensely valuable property is now one of the
    newest national wildlife refuges.
        Sacramento Open Space seeks substantial funding for fiscal year
    1998 because the refuge is in need of significant support in its early
    years. Located just south of the City of Sacramento, it lies in the
    path of new urbanization that can only increase land values and thus
    inflate the cost of expanding the refuge to the boundaries called for
    in the approved 1992 plan.
        The $5.5 million which we seek for land acquisition in fiscal year
    1998 will go only for land purchased from willing sellers, people who
    the Fish and Wildlife Service needs to deal with quickly before they
    (the owners) get discouraged at government delays and are courted by
    developers offering more for their land than they are asking today. You
    should know that this refuge ranked third in the nation on the Fish and
    Wildlife Service's land acquisition priority list for 1998. Nation-
    wide,this acquisition is very important, very high in priority.
        The $0.3 million requested for operations and management will be
    used not only for the day-to-day activities which keep the refuge
    going, it will also be used to fund programs to enhance the
    productivity and carrying capacity of the refuge lands so as to
    increase their value for native and migratory wildlife. Even today, the
    refuge's modest operations budget has allowed limited public use of the
    facility, with an emphasis on educational programs for local school (K-
    12) groups.
        The $7 million sought for the construction of a conservation
    education facility will allow the refuge to provide educational and
    recreational opportunities for an estimated 200,000 visitors annually.
    This facility will educate the public in conservation and environmental
    matters and, to some degree, bolster the local economy through the
    expenditures of non-local people who visit the refuge and the facility.
        You may be assured that this refuge has widespread support in the
    Sacramento region, from public officials, organizations and
    individuals. We urge the support of you and your subcommittee to
    continue the development of this important wildlife refuge.
        Sincerely,
                                                   Patrice Cox,
                                                             President.
                                     ______

        Prepared Statement of Ted James, Planning Director, Kern County
       Planning Department; Steven J. Arita, Environmental Coordinator,
      Western States Petroleum Association; Manual Cunha, Jr., President,
       Nisei Farmers League; Les Clark, Vice President, Independent Oil
     Producers Association, on behalf of Kern County Valley Floor Habitat
              Conservation Plan Industry and Government Coalition

        Mr. Chairman and Members of the Subcommittee: On behalf of the
    California Industry and Government Coalition for the Kern County Valley
    Floor Habitat Conservation Plan (KCVFHCP), we are pleased to submit
    this statement for the record in support of our funding request for the
    Interior Appropriations Bill for fiscal year 1998.
        First, the Coalition supports the Department of Interior's budget
    request of $14 million for the Cooperative Endangered Species
    Conservation Fund--especially the $6 million funding for HCP land
    acquisition.
        Secondly, the Coalition urges the Subcommittee to appropriate
    additional funding for land acquisition above the $6 million requested.
        The Coalition's request is supported by the timely need to
    implement the KCVFHCP, which is in the final stages of development and
    expected to be completed by the end of calendar 1997. We are hopeful
    that our pending application for $500,000, from previously appropriated
    funds, for the current (1997) fiscal year will be successful. However,
    to secure the $6 million total necessary for full implementation of the
    plan, we will require $2.75 million for fiscal year 1998 and $2.75
    million for fiscal year 1999.
        The Coalition requests that the Subcommittee appropriate the
    maximum possible amount for this program, so that the funding pool can
    accommodate our request and need. We are confident that the plan's
    merits and urgency support this request.
        Kern County's program is unique from other regions in the nation in
    that it contains some of the highest concentrations of plant and animal
    species protected by the Endangered Species Act (ESA) within the
    continental United States. The region is occupied by 13 wildlife
    species and 14 plant species listed as threatened or endangered under
    federal law. The potential for conflict with the federal ESA is great
    in Kern County because of the extensive agricultural and oil and gas
    production activities which occur. Since Kern County is the top oil
    producing county in the nation and one of the leading agricultural
    counties, potential conflicts with the ESA and their resolution through
    a proactive conservation program has significant national importance.
        In recognition of the conflicts posed to economic growth by federal
    and state endangered species laws, a joint agency Memorandum of
    Understanding was entered into by the U.S. Fish & Wildlife Service,
    Bureau of Land Management, California Energy Commission, California
    Department of Oil & Gas and Geothermal Resources, California Department
    of Fish & Game and Kern County. The participating agencies agreed to
    develop a unified conservation strategy with the goal of providing a
    streamlined and consistent process of complying with State and Federal
    endangered species laws, yet at the same time allow important industry
    activities such as oil and gas, agricultural, ranching, and other
    industry activities to continue. Preparation of the KCVFHCP began in
    1989 and involved a number of federal, state and local government
    agencies, as well as the oil and gas industry, agricultural, utilities
    and environmental groups.
        Kern County's Valley Floor Habitat Conservation Plan (KCVFHCP) is
    one of the largest and most diverse endangered species conservation
    programs under development in the nation. The program embraces many of
    the conservation approaches that have been advocated by the Department
    of Interior, in that it represents a significant departure from
    traditional endangered species conservation programs which utilize
    prohibitory controls to assure conservation of species habitat.
    Instead, it is based on a system of trading habitat credits in an open
    market. In that regard, the KCVFHCP is considered to be a state-of-art
    conservation plan that will address compliance with the ESA for
    multiple threatened and endangered species. This innovative and state
    of the art system, for the first time, provides landowners with real
    incentives and more importantly, the ability to choose how best to
    manage their own private property. The KCVFHCP is in the final states
    of development and is scheduled to be completed in 1997. The second
    draft of the HCP document will soon be released, and we are currently
    in the process of developing work on the Implementing Agreement.
        Numerous agencies, in concert with the State of California and
    local government entities, as well as the private oil and gas and
    agricultural industries have contributed funding, time and other
    resources toward developing the KCVFHCP. Currently, the KCVFHCP program
    will be completed in the fall, 1997, provided there is the necessary
    federal funding for the acquisition of habitat to mitigate for
    agricultural and oil AND gas operations and development. As mentioned
    previously, we are currently in the process of securing funding in the
    amount of $500,000 for this fiscal year; however, additional funding is
    critical to completing the HCP. This is one of the final steps
    necessary to implement the conservation strategy. Because of the
    extensive private, local and state government financial support that
    went into the development of this program, federal participation in
    program implementation will demonstrate that the burden of ESA
    compliance is not being placed exclusively on private property owners.
    Program funding will also contribute to eventual species recovery.
                             program funding needs
        In order for the KCVFHCP to be implemented, the program requires
    funding in the amount of $5.5 million (provided we are successful in
    securing $500,00 this fiscal year) that could be funded in increments
    over the first several years of the program. A breakdown of the purpose
    and amount of this funding is as follows:
    Fallow lands issue
        Agricultural practices and the lack of available water often result
    in situations where substantial amounts of previously farmed land
    (20,000 acres plus or minus) are placed in a fallow state. This
    situation invites the reintroduction of species into these areas which
    create potential ESA compliance problems when the farmer decides to
    reuse the land for agricultural purposes. Many farmers are forced to
    unnecessarily disc fallow lands to prevent endangered species
    recolonization.
        The KCVFHCP has devised a strategy that includes the purchase and
    set aside of approximately 3,000 acres of endangered species habitat to
    mitigate for species loss resulting from reuse of fallow agricultural
    lands. The program strategy allocates $3 million for acquisition and
    perpetual maintenance of species reserve areas. With this type of
    protection, farmers would no longer have to be concerned about
    endangered species act violations when fallow land is reused.
    Oil development issue
        A mitigation strategy has been devised that is intended to
    acknowledge existing oil field activities within Kern County. The
    strategy proposes to acquire 3,000 acres of endangered species habitat
    to mitigate for species loss resulting from oil field development
    outside of established oil field production areas, but within proximity
    of those areas. This is to allow for reasonable expansion of oil field
    activities over the life of the HCP program. The program strategy
    allocates $3 million for acquisition and perpetual maintenance of
    species reserve areas. With this type of strategy, oil field expansion
    activities would be provided for in the program. This strategy would be
    of great benefit to the small independent oil and gas companies within
    the program area.
        Together the $6 million required for the agriculture and oil field
    strategies would provide a method to satisfy the program's conservation
    goals, while also providing for continued economic growth of Kern
    County's oil and agricultural industries.
        Numerous industries, in concert with the State of California and
    local government entities, are attempting to do their part, and we come
    to the appropriations process to request assistance in obtaining a fair
    federal share of financial support for this important effort. This
    unique cooperative partnership involving state and local government, as
    well as private industry, has contributed substantial funds to date to
    assist in the development of this program.
        The California Industry and Government Coalition appreciates the
    Subcommittee's consideration of this request for a fiscal year 1998
    appropriation to support implementation of this significant program.
                                     ______

        Prepared Statement of Mary Beth Beetham, Legislative Associate,
                             Defenders of Wildlife

        Mr. Chairman and Members of the Subcommittee: I am Mary Beth
    Beetham, Legislative Associate for Defenders of Wildlife. On behalf of
    Defenders and our nearly 200,000 members and supporters, I thank you
    for the opportunity to provide testimony concerning our fiscal year
    1998 appropriations priorities. America's greatness and wealth flow in
    large measure from the abundance and diversity of our magnificent
    natural resources. As unprotected natural areas continue to disappear,
    our public lands and public trust resources are increasingly important
    in maintaining our nation's natural resource base and numerous
    attendant benefits to society. Yet ironically, at the same time that
    these irreplaceable publicly-held natural assets increase in value to
    our nation, their continued vitality is threatened by the prospect of
    funding cuts as Congress and the President move to balance the budget.
    Increasingly, people across America are realizing the looming peril to
    these vital assets and are uniting to support funding for our federal
    conservation programs. Defenders is a member of many of these
    coalitions which will be referenced throughout our testimony.
        The largest and most encompassing coalition is the Public Lands
    Funding Initiative (PLFI) which advocates modest increments to the
    Interior Appropriations Subcommittee's 602(b) allocation over the next
    six years to support key public lands and wildlife accounts.
    Recommendations of the PLFI will be presented into the record later
    today by The Wilderness Society. This coalition consists of 150
    environmental, recreation and conservation groups and is endorsed by
    Theodore Roosevelt IV, great-grandson of the President.
        As an investment banker, Mr. Roosevelt understands the wisdom of
    essential investments, as illustrated in his letter endorsing the
    initiative: ``Given the overwhelming importance of these resources to
    present and future generations of Americans, the only fiscally
    responsible course is to invest adequately in their stewardship and
    management, even as we take needed steps to balance the federal budget.
    Indeed, denying critically needed funding is fiscally irresponsible and
    shortsighted--the neglect caused by deficient funding will result in
    destruction and degradation of these valuable assets that is far more
    costly in the long run than providing funds to properly care for them
    today.''
                              species conservation
        Endangered species.--Defenders is working with the Endangered
    Species Coalition, a broad base of national and local organizations
    committed to the conservation of threatened and endangered species, to
    increase funding for Endangered Species Act implementation. For Fish
    and Wildlife Service's (FWS) four main Endangered Species accounts
    (Candidate Conservation, Listing, Recovery, and Consultation), we urge
    at the very least the amounts requested in the President's fiscal year
    1998 budget ($78.781 million), but believe that increases over the
    request are both necessary and appropriate. Adequate funding benefits
    interests on all sides of the ESA debate because it allows for smooth
    implementation and speedy less-costly recovery, reducing the potential
    for conflict.
        Under the President's budget, Candidate Conservation and Listing
    would be virtually level-funded even though the FWS anticipates
    increases of 23 percent in Candidate Conservation activities and 30
    percent in Listing actions in fiscal year 1998. According to FWS, the
    Listing program, which would be funded at only half of the Bush
    Administration's fiscal year 1992 request level, is still suffering a
    backlog due to the fiscal year 1995-96 listing moratorium. The Service
    has already missed a statutory deadline for actions on 146 species
    currently proposed for listing and many of the 184 candidates needing
    listing proposals. One such candidate is the disappearing Florida black
    bear, waiting along with 84 other species since a 1992 court settlement
    for a finding under the Act. FWS has also indicated that it will not
    designate any critical habitat (funded by the Listing account) during
    fiscal year 1998.
        The marginal increase requested for Recovery will not adequately
    address the backlogged 299 listed species lacking recovery plans and
    planning for the additional 120 species projected for listing in fiscal
    year 1998, while still allowing for recovery implementation. Based on a
    1990 Audit Report on the ESA program by the Department of Interior's
    (DOI) Inspector General (Report 90-98), the lower-end estimate for
    average yearly recovery cost per species was $100,000. This would
    result in a total fiscal year 1998 need of $96 million to fund recovery
    for the more than 960 listed U.S. species under FWS jurisdiction. As
    can be seen from the projected fiscal year 1998 costs of recovery for
    keystone species listed below, $100,000 per species is indeed a
    conservative estimate.
        Although a 34 percent increase was requested for Consultation, the
    FWS expects to be involved in approximately 43 percent more Section 7
    Consultations and Section 10 Habitat Conservation Plans. Moreover, the
    Service has also just begun to identify the need for monitoring and
    follow-up on these activities, but until now has had no funds to do so.
    Consequently, Defenders supports increases in this item and opposes the
    $85,000 reduction in the Section 6 Cooperative Endangered Species Fund,
    the only ESA related program that directly supports State activities.
        Defenders' highest priorities for recovery programs focus on
    keystone species whose restoration fosters recovery of supporting
    ecosystems and associated species. The Mexican wolf, extinct in the
    wild and unrepresented in any extant populations of gray wolves, is the
    rarest subspecies of gray wolf in the world. For captive propagation,
    public education, and initiation of reintroduction efforts to re-
    establish and maintain viable wild populations, $546,600 (FWS) is
    needed for fiscal year 1998. For the successful red wolf program in
    North Carolina and Tennessee, $1,025,000 (FWS) will support continued
    captive propagation, monitoring, and releases. The landmark Northern
    Rockies wolf recovery program, continues to enjoy tremendous success,
    and no further reintroductions are anticipated at this time. For
    monitoring, public education, and cooperative agreements with the Nez
    Perce tribe and states (which will receive most of the FWS allocation)
    $975,000 (FWS) is needed, while $300,000 (NPS) is needed for management
    of the program in Yellowstone National Park. In addition, we urge the
    Subcommittee to allocate $50,000 (FWS/NPS) to study the suitability of
    Washington's Olympic National Park for Gray wolf restoration. At least
    $480,000 (FWS) is necessary for recovery efforts in Wyoming, Montana,
    S. Dakota, and Arizona for the endangered black-footed ferret, thought
    to be extinct in the wild except for reintroduced populations. Of this
    amount, $230,000 will continue the crucial FWS role as coordinator in
    this multi-partner program that leverages three to four non-federal
    dollars for every federal dollar. The additional $250,000 is essential
    to fund management of the former Sybille breeding facility (now the
    National Black-footed Ferret Conservation Center), home to 60 percent
    of the captive breeding population and formerly run by the State of
    Wyoming. Finally, the grizzly bear recovery program is a successful
    cooperative effort between federal, state, and local governments and
    private landowners that is being eroded by budgetary reductions.
    Moreover, the grizzly program is cost effective, resulting in multi-
    species benefits to black bears, wolverines, lynx and mountain lions;
    $800,000 is needed in fiscal year 1997 for the grizzly recovery program
    which covers 30,000 square miles in four states. Successful
    reintroduction of threatened grizzly bears into the Bitterroot
    ecosystem of central Idaho and W. Montana could increase grizzly bear
    numbers and range in the lower 48 states by nearly one third; $250,000
    of the grizzly recovery budget will be will be used for initiation of
    reintroductions.
        Other FWS accounts: Defenders also wishes to underscore its support
    for no less than the President's budget request for other FWS accounts
    critical to species conservation: Law Enforcement; Migratory Bird
    Management, especially for conservation of non-game birds;
    International Affairs, which helps support U.S. international
    leadership in the conservation of wildlife and biodiversity,
    particularly through implementation of the Convention on International
    Trade in Endangered Species; and the modestly funded African Elephant
    and Rhino and Tiger Conservation Funds.
                                  public lands
        Land and Water Conservation Fund (LWCF).--The LWCF represents a
    promise made by Congress to the American people to reinvest revenue
    from the development of non-renewable resources into acquisition and
    permanent protection of key land, water, and open space resources for
    future generations. Although authorized at $900 million per year and
    the primary source of revenues, offshore oil and gas leases, average
    more than $2 billion yearly, fiscal year 1996 and fiscal year 1997
    allocations are the lowest in 25 years (about 15 percent of the
    authorized level). Moreover, according to DOI budget information, Outer
    Continental Shelf receipts totalled about $4 billion in fiscal year
    1997 and are expected to be about the same for fiscal year 1998.
        Defenders is proud to be a leader in Americans for Our Heritage and
    Recreation (AHR), a new coalition dedicated to revitalizing and
    potentially expanding the LWCF. AHR represents thousands of LWCF
    stakeholders nationwide including urban, state, recreation, industry,
    and environmental groups. Defenders urges this subcommittee to renew
    the broken promise of the LWCF Act by fully funding the AHR's modest
    fiscal year 1998 federal project list.
        Defenders' priority for such funding is the acquisition of lands to
    protect threatened and endangered species, conserve biodiversity, and
    consolidate protection of key ecosystems, such as the Pinhook Swamp, a
    corridor linkage between Northwest Florida's Osceola National Forest
    and Georgia's Okeefenokee National Wildlife Refuge. Slated to be
    acquired and managed by the Forest Service, the linkage would complete
    a large, regionally significant conservation area providing a
    stronghold for wide-ranging species such as the Florida black bear and
    habitat for the federally endangered Florida panther, woodstork, and
    red-cockaded woodpecker.
        National Wildlife Refuge System (NWRS) Operations and
    Maintenance.--The 92 million acre NWRS is the only federal lands
    network dedicated primarily to fish and wildlife conservation, serving
    as an anchor for protection of our nation's magnificent biodiversity.
    While the primary purpose of the Refuge System is conservation, it also
    serves more than 28 million recreationists yearly, engaging in
    compatible activities such as wildlife observation, hiking, and
    fishing, generating hundreds of millions in economic benefits to local
    communities.
        Unfortunately, the NWRS continues to be a jewel in the rough,
    crippled for years by severe funding shortfalls resulting in a current
    Maintenance backlog of approximately $428 million and Operations needs
    of approximately $300 million. The National Fish and Wildlife
    Foundation's fiscal year 1997 Fisheries and Wildlife Assessment
    highlighted the Refuge O&M funding shortfall as a key policy issue for
    DOI, pointing out that the Refuge System receives the lowest per-acre
    funding of all federal land management agencies.
        As a proactive member of the Cooperative Alliance for Refuge
    Enhancement (CARE), a diverse coalition of more than 15 environmental,
    hunting, fishing and recreation groups formed in 1995 to address the
    severe Refuge funding problems, Defenders fully endorses testimony
    presented on behalf of CARE by Dr. Rollin Sparrowe. CARE is currently
    finalizing a proposal which would recommend increases of approximately
    $50 million per year for the next six years, to bring the Refuge System
    to two-thirds of its capacity by the year 2003. For fiscal year 1998,
    we are requesting $220 million, $28 million more than the President's
    request and have worked with the FWS to identify a list of specific
    projects totalling $35 million that will not be funded even if the
    President's budget is allocated, such as: National Key Deer Refuge
    (FL), population survey of backcountry islands for the endangered key
    deer and completion of GIS mapping to assist in key deer management;
    Lower Suwannee NWR (FL), aerial surveys for the endangered manatee;
    Alligator River NWR (NC), hiring of a full-time law enforcement
    officer. We appreciate the Subcommittee's fiscal year 1997 funding
    increase and urge allocation of CARE's recommended $220 million for
    fiscal year 1998.
        USDA Forest Service (FS)--The 192 million acre National Forest
    System (NFS) supports the greatest diversity of plant and animal
    species on any public lands systems nationwide--more than 3000 species
    of wildlife and 10,000 species of plants, of which 33 percent are
    federally listed species and 2,500 identified as sensitive. Viewing of
    wildlife is the fastest growing use on the NFS, generating 33 million
    activity days and supporting 55,000 jobs valued at $1.6 billion
    (Resources Planning Act 1995 Draft Program). To support these important
    uses, the PLFI recommends funding increases for NFS Fish and Wildlife,
    Ecosystem Research, Recreation, and Trails.
        Defenders is particularly concerned about funding for NFS Fish and
    Wildlife Habitat Management and recommends at minimum the President's
    request of an $11 million increase (still lower than fiscal year 1991-
    95 levels), including a $5.45 million increase for Threatened,
    Endangered, and Sensitive Species (TES). Moreover, the FS has
    identified $68 million in opportunities for TES, more than twice the
    requested funding level, including projects such as improved protection
    for the endangered Hualapai Mexican vole on the Prescott National
    Forest and for grizzly bear, wolverine, and North American lynx on
    Washington's Okanogan National Forest. While Defenders is working
    aggressively to support an increase in the Subcommittee's 602(b)
    allocations to fund needs for programs of concern, we also support
    efforts by the Green Scissors Coalition and the Western Ancient Forest
    Campaign to examine and restore Forest Service accountability--called
    into question by the GAO and the White House Council of Economic
    Advisors--as a way of generating at least some offsets for necessary
    increases. To this end, we recommend reform or abolishment of permanent
    funds such as Salvage and K-V and elimination of below-cost timber
    sales. As a first step in addressing below-cost sales, we are pleased
    with the Administration's proposal to end the Purchaser Credit Program
    (PCP) but are concerned that 84 percent of the funds used to support
    the PCP and Purchaser Elect Program are still included in the
    President's budget. In addition, Defenders believes that any funding
    for road-building in roadless areas should be eliminated. The
    Administration has also proposed creation of a new Forest Ecosystem
    Restoration and Maintenance Fund. While we support the goals of this
    fund, we are awaiting details and are concerned about the creation of
    any new off-budget FS fund as well as some of the activities currently
    proposed for the fund that could create new incentives for FS managers
    to log to raise revenue.
        Bureau of Land Management (BLM).--While the NFS supports the
    largest diversity of species, according to BLM the 264 million acres of
    public domain lands support the most ecologically varied land base.
    Based on agency information, fish and wildlife are the most important
    economic resources on these lands, generating 66 million visitor days
    and $2.5 billion in economic benefits. The PLFI supports increased
    funding for BLM Wildlife and Fisheries, Wilderness, Cultural Resources,
    Recreation, and Riparian Restoration and Protection. A priority for
    Defenders is Wildlife and Fisheries, especially Threatened and
    Endangered (T/E) species and we recommend increases over the virtual
    level funding recommended in the President's budget for both of these
    accounts. The number of threatened and endangered species on BLM lands
    has increased in recent years at the rate of about 20 per year. Even
    though BLM lands will provide habitat in fiscal year 1998 for more than
    300 listed or proposed plants and animals, fiscal year 1998 requested
    funding would support actions for just a little more than half of these
    species. Based on this figure the T/E level should be almost doubled to
    about $30 million.
        National Park System (NPS).--As a member of the Everglades
    Coalition, Defenders supports the President's budget request of $100
    million for the Everglades Restoration Fund. This fund is critically
    needed for land acquisition, modified water delivery and research to
    reverse damages inflicted over the past 100 years to the South Florida
    Ecosystem. This magnificent area is home to 6 million people and 68
    listed species and provides wintering habitat for more than 129 bird
    species and breeding habitat for an additional 132 bird species.
                              scientific research
        USGS Biological Resources Division (BRD).--The continued existence
    and well-being of our nation's vast array of biological resources is
    dependent on informed and considered conservation and management.
    Rigorous scientific research of a long-term nature is absolutely
    critical to developing effective conservation strategies, determining
    the best available management plans, and reducing conflict over
    dwindling resources. The relocation of DOI's biological science
    capabilities to USGS offers significant potential for a truly
    interdisciplinary science agency capable of providing this type of
    integrated research. While we understand that the land management
    agencies have voiced concerns that their research needs are not being
    adequately addressed by BRD, we suggest that to the extent this is the
    case, a significant factor may be the funding cuts inflicted on these
    activities over the last two years--more than 15 percent below fiscal
    year 1995 levels for both fiscal year 1996 and fiscal year 1997. We
    urge, at the very least, full funding of the President's request ($145
    million), but note this amount would still leave the Division with
    almost a 14 percent funding reduction below fiscal year 1995 levels.
    Defenders is a member of a new group of organizations (BRD Watchers)
    which supports enhancement of DOI's biological research programs.
        Defenders maintains its support for the Gap Analysis Program (GAP),
    a collaborative effort involving 40 states and more than 400 business,
    non-profit, local, and Federal agency organizations to map our nation's
    biological diversity and areas currently managed for its protection. We
    also continue to believe that insufficient resources have been made
    available for efficient transfer of GAP data to users and integration
    into on-the-ground conservation planning. We recommend that specific
    funding be earmarked for GAP product development and pilot projects
    using GAP for statewide and bioregional conservation planning. Thank
    you, Mr. Chairman.
                                     ______

    Prepared Statement of John E. Ebel, Director, the Weston Observatory of
                                 Boston College

        Mr. Chairman and members of the Subcommittee, I appreciate this
    opportunity to submit testimony regarding the importance of the
    National Earthquake Hazard Reduction Program (NEHRP) in the United
    States. As the Director of the Weston Observatory of Boston College, I
    want to bring to your attention how NEHRP funding has positively
    impacted Weston Observatory's efforts to stimulate earthquake hazard
    reduction activity in the northeastern United States and how future
    funding is vital if such efforts are to be successfully continued.
        Let me say up front that increased NEHRP funding is essential if
    efforts to mitigate the effects of future earthquakes in the
    northeastern U.S., as well as in the earthquake prone areas in the rest
    of the country, are to be successful. NEHRP funding for the U.S.
    Geological Survey (USGS) needs to be increased to $52 million for
    fiscal year 1998. Of this almost $4 million increase over the USGS
    fiscal year 1997 appropriation, I urge that $2 million of the increase
    be dedicated to improving the earthquake monitoring capabilities across
    the U.S. As I will explain below, prolonged level funding and recent
    budget cuts are severely hampering the current ability of scientists to
    collect data on earthquake occurrences and their effects. NEHRP cuts
    also are adversely impacting the ability of USGS and university
    scientists to analyze these data and to translate their research
    results into public mitigation efforts. In my remarks, I will focus on
    efforts and results of earthquake research in New England and vicinity.
    However, I know from discussions that my colleagues from throughout the
    U.S. are facing the same problems that I face here in the northeast.
        From the days of the Pilgrims right to the present, earthquakes
    have been a part of life in New England. While many strong earthquakes
    in the past have caused damage in the region, in modern times New
    England so far has been lucky that none of its major cities has taken a
    direct hit from a strong earthquake. However, just in the northeastern
    U.S. itself earthquakes in the past few years near Boston, Providence,
    Hartford, New York City and Philadelphia are evidence that at some time
    in the future any of these cities could experience a catastrophe
    similar to that in Northridge, California in 1994. Earthquake awareness
    in this region is slowly increasing, as have mitigation efforts. During
    the past few years, for instance, New York City adopted a seismic
    provision in its building code, and Massachusetts began requiring older
    buildings be refurbished to earthquake resistant standards. Other New
    England states have begun adopting the recommended seismic provisions
    for new buildings from the national building code organizations.
    However, too many members of the general public view these requirements
    as legal impediments to be avoided rather than safety issues that must
    be undertaken. This is especially true for those who own the older
    buildings that are most prone to damage in earthquake shaking. I hope
    someday to see those who design, construct and refurbish buildings take
    earthquake design as seriously as they take fire safety design.
    Unfortunately we still have a long way to go to get there.
        It is my firm belief that earthquake monitoring and research is a
    key aspect necessary to motivate the public to take the earthquake
    threat seriously. Scientists of all disciplines know that publicity
    surrounding new research discoveries and observations can be a prime
    force motivating people to take action. This has certainly been true in
    such areas as cancer studies, global climate change research and
    environmental impacts on the earth's ozone layer. It is also quite true
    in earthquake studies. For example, during the spring of 1996 several
    small earthquakes were felt in eastern Massachusetts. Not only did
    people want to know from the Weston Observatory staff the magnitudes
    and locations of these events, but also they wanted to know if these
    shocks meant that a stronger earthquake could occur. We at Weston
    Observatory responded that we could not predict the occurrences of
    future earthquakes but that small earthquakes do indicate places where
    stronger events could be centered in the future. I have had many people
    thank me for studying these earthquakes and express the hope that the
    studies would lead to new discoveries in the future.
        Other work by Weston Observatory researchers have added to the
    understanding of the earthquake threat in the northeast. For example,
    some of my research indicated that in 1638 an earthquake of Richter
    magnitude 6.5 to 7.0 (probably comparable to those recently at Loma
    Prieta, California in 1989, Northridge, California in 1994, and Kobe,
    Japan in 1995) took place in New England, with the most likely place
    for the epicenter being central New Hampshire. Today, central New
    Hampshire is the most seismically active zone in New England. In 1996,
    I and two other Weston Observatory researchers released the first
    seismic hazard study of the state of Vermont. Research by Prof. Alan
    Kafka of Boston College has shown that the persistent earthquake
    activity in the New York City area is similar to that in other areas
    where strong earthquakes can occur. We are still looking to identify
    which are the active faults throughout the region, but recent
    earthquake monitoring has allowed us to guess which geologic faults
    bear further study.
        Unfortunately, if current funding trends continue, it will be
    difficult to maintain this level of research activity in the future.
    NEHRP funding to the USGS has decreased in the past two years after
    several years of level funding. This has translated into cuts in the
    funding that Weston Observatory receives for earthquake monitoring in
    New England. We have responded to these cuts by paring down the staff
    operating the seismic network and by delaying installation and
    maintenance of our 15 seismic stations spread strategically across the
    six New England states. Under the current-year funding for Weston
    Observatory, later this year I will no longer be able to afford my
    part-time seismologist who is the one who carries out the routine
    analysis on the earthquake data we record. By the end of 1997 Weston
    Observatory could be in a situation where it is recording earthquake
    data but has no one to analyze it on a routine basis. Not only does
    this represent a loss of vital scientific data, but it also severely
    hampers our efforts to increase the speed and improve the quality of
    the earthquake information that we deliver to the public.
        I know that other seismic networks across our country are faced
    with this same kind of staffing problem due to budget cuts. It is for
    this reason that I call for $2 million additional funding for
    earthquake monitoring throughout the U.S. That amount of money, spread
    across the 15 or so earthquake networks across the country, would go a
    long way alleviating the current crisis in the operation of our
    national earthquake monitoring infrastructure. Over the longer term,
    Congress should consider special appropriations of a few million
    dollars to improve earthquake monitoring all throughout the country.
    Such an investment is necessary if regional seismic networks are to
    deliver earthquake epicenters, magnitudes, ground motions, and
    estimates of damage within seconds or minutes of the occurrence of an
    earthquake. It is also necessary if such proposals as earthquake early
    warning systems are to be developed.
        I believe that increased NEHRP funding to the USGS for basic
    earthquake research can have a number of benefits for earthquake hazard
    reduction efforts, both within New England and nationally. I list some
    of the most important research benefits here:
        (1) Improve our understanding of the causes, effects and
    probabilities of strong earthquakes. Earthquakes are a natural hazard
    that arise from deep inside the earth, a place that can only be studied
    by instrumentation placed at the earth's surface. While research over
    the past two decades has revealed why many strong earthquakes have
    occurred, many other earthquakes have been surprises to scientists. All
    across the country, we still have much to learn about which faults are
    active, how often damaging earthquakes may take place on those faults,
    and under what geologic conditions strong earthquakes can occur. For
    example, in New England all of the faults are geologically old
    (hundreds of millions of years old). Most are probably seismically
    dead, but some must be active because we have earthquake activity.
    Unfortunately, we do not have enough seismological and geological
    evidence to determine which of the local faults are seismically active.
    I feel certain that the identification of one or more active faults
    would catch the public's attention and spur earthquake mitigation
    measures.
        (2) Improve the speed and quality of earthquake information to the
    public and to government officials. The tremendous increase in the
    availability and speed of communications during the past few years has
    raised the expectations of the public with regard to how fast they
    expect to receive information immediately following the occurrence of
    an earthquake. The delivery of emergency services and decisions about
    repairing or restoring vital lifelines rely heavily upon the speed and
    accuracy of the earthquake information available. The development of
    systems to rapidly deliver earthquake information, ideally during or
    even before the earthquake shaking is experienced, is a goal that
    demands new resources over those currently allocated for NEHRP
    research.
        (3) Improve the understanding of those parts of our urban areas
    that are most prone to damaging earthquake shaking. Earthquakes such as
    those that affected Mexico City in 1985, San Francisco and Oakland in
    1989, and Kobe in 1995 have driven home the point that landfill and
    other thick soil areas within cities are prone to amplify earthquake
    shaking and hence are most prone to earthquake damage. There should be
    a major research effort to identify such dangerous zones within all
    cities in our country that lie in areas with moderate or high seismic
    hazard. In New England, Boston, Providence, Hartford and Portland,
    Maine all qualify as cities that have local zones where earthquake
    ground shaking will probably be amplified.
        (4) Develop programs to encourage industry to undertake earthquake
    mitigation efforts. In my opinion, industry needs to be encouraged to
    invest in earthquake hazard research and mitigation. With the recent
    trends to allow regional or national banks, utilities and
    communications, an earthquake catastrophe in one part of the country
    could inadvertently impact other parts of the country as well. Such
    widespread impacts often are not appreciated when mergers or takeovers
    take place. Studies to learn the national effects of damaging
    earthquakes in different parts of the country should be something in
    which both industry and government regulators take interest.
        There is a tendency among some in public and private circles to
    dismiss basic research, especially long-term research, as not meeting
    the needs of the nation. In fact, I believe that just the opposite is
    true. The current success of earthquake hazard mitigation efforts stems
    in large part from the past basic research that has been funded by the
    federal government. This is especially true of seismic monitoring of
    small earthquakes. To the public, such monitoring indicates that the
    earthquake threat is real and should be taken seriously. To the
    scientist, such monitoring provides the basic information upon which
    new theories and discoveries must be based. We are still at the point
    where each earthquake provides a new piece of information to help us
    decipher the puzzle of where and when future strong earthquakes may
    occur. There is no doubt that future efforts by the public to take
    action to mitigate the effects of earthquakes will be directly related
    to the amount of basic research that takes place now and in the near
    future. This is true in New England and throughout the rest of the
    country as well.
                                     ______

          Prepared Statement of the Interstate Council on Water Policy

        The Interstate Council on Water Policy (ICWP) represents state,
    regional and local water resource management agencies throughout the
    country. Since 1959, the Council has voiced the concerns of local and
    state managers regarding federal programs and activities. It is in this
    role that the Council wishes to express comments on the
    Administration's proposed budget for Federal fiscal year 1998 for the
    U.S. Geological Survey (USGS).
        The Council is pleased to see the fiscal year 1998 budget for USGS
    remains at funding levels seen in fiscal year 1996 and 1997. The Water
    Resources Division comprises 26 percent of that budget and also sees an
    increase in funding over 1997. That increase stems from adaptation of
    the National Water Quality Assessment Program (NAWQA) to support
    President Clinton's ``Water Quality Information (Kalamazoo)
    Initiative'', providing water quality information on the major streams
    and aquifers in the Nation's 75 largest metropolitan areas, including
    the largest city in each of the 50 States.
        This $9 million increase in NAWQA funding appears to require $1.9
    million in new appropriation, with the balance coming from redirected
    funds of eliminated or reduced programs, such as the Acid Rain and the
    Water Resources Assessment Programs. The Council is concerned this new
    Initiative deviates from the original premise of Hydrologic Unit-based
    sampling which underlies the NAWQA approach and supports the ongoing
    implementation of the NAWQA Program. Directing investigations toward
    water resources in metropolitan areas appears to step away from the
    reigning philosophy of watershed oriented management and assessment
    which USGS has championed.
        The Council believes much of the monitoring information sought by
    this new Initiative is already available from State and local water
    agencies and questions whether resources directed into the President's
    Water Quality Information Initiative comes at the expense of other
    endeavors which provide the States with useful and needed information,
    such as stream gaging stations and new NAWQA study units. An
    examination of the new directions of the NAWQA Program would seem
    warranted in order to ensure the most pertinent and valuable water
    quality data are collected.
        The Council is extremely concerned by the disturbing effect that
    funding reductions and inflation are having on federal data collection
    efforts, under the heading of Water Data Collection and Management. We
    note that the portion of the stream gaging network supported by the
    federal funds was decreased by $1.1 million in fiscal year 1997 and
    that there is no restoration of these funds or compensation for
    inflation in the fiscal year 1998 budget. This combination of factors
    will result in a loss of more than 100 gaging stations, further
    accelerating the losing trend which began in 1990.
        A similar situation arises in the Federal-State Cooperative
    Program, which stands to lose $1.2 million from 1997 funding levels.
    This decrease follows a $2.4 million increase in funding between 1996
    and 1997, which offset inflationary costs of the existing program. The
    ``roller-coaster'' approach to funding directly influences nonfederal
    agency decisions to provide matching funds to begin investigative
    studies and monitor additional streams.
        This budgetary method provides no stability to maintaining a
    program which is the foundation of partnership between the federal
    government and state and local agencies. Under the requested level, an
    additional 120 gaging stations funded through the Federal-State
    Cooperative Water program will be discontinued, further diminishing our
    ability to monitor and assess the dynamic trends of our Nation's stream
    systems. Reductions in this program also negate opportunities for the
    federal government to leverage its investment with contributions from
    state and local users.
        The ICWP and USGS have been engaged in a dialogue of trying to
    provide guidance on modification of the Nation's stream gaging network
    given limitations in future funding. The nationwide network comprises
    both the federal program and the Federal-State Cooperative Program.
    There are selection criteria to be considered when deciding the fate of
    a given station. These criteria include monitoring of unique hydrologic
    areas, monitoring compliance for interstate compacts and Supreme Court
    decrees and adequate coverage for National Weather Service flood
    forecasting. The ICWP and USGS are working toward consensus on those
    criteria, but the Council fears that adoption of the fiscal year 1998
    budget will pre-emptany further discussion on the configuration of the
    Nation's streamflow monitoring network, as the Survey hastens to
    discontinue stations to meet its funding constraints.
        The Council appreciates and supports the Administration's and
    Congress' need to reduce the Federal Budget. We are concerned that in
    the process of downsizing federal commitments for water resource data
    collection, the States shoulder the burden of compensating for the
    smaller network. Adjustments can be made by all levels of government,
    but it must be allowed to occur in an orderly process so that any
    necessary transitions in responsibility minimize disruption to the
    access of important information.
        The Council reiterates that the collection of water resource data
    remains the highest priority and retains the highest value of our
    relationship with the USGS. Changes in emphasis from data collection to
    hydrologic analysis provide marginal value to the states in situations
    when resources are redirected from data programs to new initiatives.
    The cornerstone of a local-state-federal partnership in water remains
    the availability of reliable water resource data on which to base
    decisions and coordinate activities.
        In that spirit, the Council requests Congress to minimize any
    reductions in the fiscal year 1998 appropriations to the federal
    Hydrologic Networks and Analysis and the Federal-State Cooperative
    Programs to maintain the delivery of useful hydrologic information and
    to allow ICWP and USGS to prepare a plan for a necessary yet smooth
    transition in data collection support efforts in fiscal year 1999.
                                     ______

       Prepared Statement of Dr. Thomas G. Bahr, President, the National
                         Institutes for Water Resources

        Mr. Chairman: My name is Thomas G. Bahr. I am President of the
    National Institutes for Water Resources and Director of the New Mexico
    Water Resources Research Institute at New Mexico State University, Las
    Cruces, NM. I wish to thank you for the opportunity to provide
    testimony and express my appreciation for the strong support you have
    given the Water Resources Institute program. I have been directly
    associated with this program for over 20 years as a director of two
    different state institutes and also as the director of the federal
    agency which once administered this program during the first Reagan
    administration. This is a valuable program for America which recognizes
    the premise that states, not the federal government, are the managers
    of their water resources and that solutions to water problems are best
    solved at the state and local level. Water Resources Research
    Institutes are state entities, which through applied research, are
    ideally situated to tailor appropriate solutions to state water
    problems. States, in fact, put two dollars into the Institute program
    for every one federal dollar.
        I am pleased to report that the Water Resources Research Act was
    reauthorized by the Congress and signed into law on May 24, 1996. This
    Act (42 USC 10301 et seq.) continues the important state-based program
    originally authorized in 1964. As my colleague, Dr. Leland Mink, points
    out in his testimony, the Act has been broadened to include emphasis on
    long-range water resources planning and the study of effective
    management of agricultural and natural resources systems. This adds
    important new dimensions to the program making it an even more
    comprehensive and robust authorization. Its implementation, however,
    depends on adequate funding.
        We have reviewed the USGS budget proposed by the Administration and
    we strongly support the research program of the Water Resources
    Division. Their work is widely recognized as first class among the
    scientific community. For the first time in several years, the
    Administration has now recommended at least some funding for the Water
    Resources Research Institute program and we greatly appreciate this as
    a step in the right direction. Over the many years of the Institute
    program, however, there has been a steady erosion in the ability of
    Institutes to maintain viable programs. Last year's funding level of
    $4.553 million is roughly the same amount as the first year
    appropriation for the program when it started over 30 years ago.
    Inflation over the past 30 years, however, has reduced the purchasing
    power of the research dollar by nearly 4-fold.
        On behalf of the National Institutes for Water Resources we ask for
    your support for the following:
        $7,000,000 to support activities authorized by Section 104(b) of
    the Water Resources Research Act, that section which authorizes the
    base institutional grants for the 54 state Water Resources Research
    Institutes.
        $2,000,000 to support activities authorized by section 104(g) of
    the Water Resources Research Act, that section which authorizes
    regional, multi-state and interjurisdictional research.
        $250,000 to support U.S. Geological Survey for administration of
    this program.
        We recognize the serious federal budget constraints at this time
    and fully understand the need for the federal government to be more
    productive with limited resources. It is for this reason we feel the
    documented productivity of the Water Resources Research Institutes
    program, the importance of the program to the individual states and the
    modest federal appropriation, essential in maintaining the high degree
    of productivity, amply justifies our request.
    section 104(b)--institutional grants to the 54 institutes. what are the
                                   benefits?
    The Institute program assures that all states maintain the capability
            and expertise needed to solve their own water resources
            problems
        The Water Resources Research Institutes use state scientists to
    conduct high priority state, regional and national research on water
    resources which can effectively reduce the size and cost of the federal
    role. The Institutes provide an existing research infrastructure by
    connecting and integrating the university-based water research
    capabilities. State agencies which are charged with direct management
    responsibilities need--but often do not have--such research
    capabilities. The Institute oversight and advisory committees,
    consisting of state and local of finials and members of the public,
    provide direction to each institute and serve at no cost to the federal
    government.
        Federal support for the Institute program creates a national
    network among the states and between their land grant colleges and
    universities and other research institutions. The network links water
    investigators throughout the nation, thereby eliminating research
    duplication and ensuring high priority topics are addressed. The
    federal support and interest in this program is an essential component
    in the Institute's ability to secure non-federal funds to support
    additional water research and technology transfer and educational
    activities. During the last fiscal year, Institutes leveraged 11 non-
    federal dollars for every 1 federal dollar appropriated to this
    program!
    Separation of governmental regulatory functions from the research
            process is essential
        Most federal water management agencies have regulatory
    responsibilities. ``In-house'' research among these agencies is more
    susceptible to political pressure to generate conclusions in support of
    an agency's position, than is independent scientific research and
    technology development conducted at our nation's universities.
    The federal water problem-solving role could be significantly reduced
            and transferred to the states
        Federal regulations and programs designed to solve water problems
    have their primary impact at the state and local level. State and local
    governments are in a far better position to tailor solutions to local
    water problems. Significant reductions of many ``in-house'' federal
    water research programs could be achieved, while at the same time
    preserving the capacity to conduct research, transfer information, and
    solve water problems through the Water Resources Research Institute
    program.
    The nation's future depends on a continuing stream of qualified
            engineers, scientists and policy makers, and requires that
            these people be trained to address more complex water issues
        Training of water resource professionals has been a hallmark of the
    programs conducted by the Institutes. Not only does this program
    provide an opportunity to expand the number of students trained, it
    will more importantly offer training that provides the kinds of skills
    needed by many future water resource professionals. Funding this
    program would help ensure that this country develops enough personnel
    to deal effectively with the more complex problems of water management
    and water quality in the future. Unlike federal research agencies,
    virtually every research dollar spent on this program has the important
    added benefit of supporting the training of new scientists and
    engineers.
    section 104(g) regional and interjurisdictional research--what are the
                                   benefits?
        By authorizing the Section 104(g) program, Congress recognizes that
    water resources management is undergoing changes in the United States
    and many serious water problems are regional and interjurisdictional in
    scope. The information necessary to solve these problems must be
    generated by knowledgeable organizations with a familiarity and
    understanding of these interjurisdictional dimensions. The nation's
    universities have the interdisciplinary expertise needed to help solve
    such complex problems without the addition of more federal employees.
    Federal funds are necessary to create a base of support for research on
            regional interjurisdictional problems
        Without federal support, there are virtually no sources of funds
    available to support the scale of interdisciplinary research and
    analysis necessary for assessing regional and interstate water
    resources problems. It is wholly appropriate for the federal government
    to provide the support base and serve as a catalyst for the type of
    solution-oriented, problem-solving research toward which this program
    would be directed through our nation's universities.
    The research and networking capabilities of the Water Resources
            Research Institutes are well-suited to lead multi-and
            interdisciplinary programs aimed at providing solutions to
            complex water issues
        The record of the Institute program in carrying out its mission
    under the Water Resources Research Act has been well documented and is
    further described in the 1997 Executive Summary of our program provided
    to your committee. The Institutes can provide not only the technical
    expertise needed to offer solutions, but can serve as the point of
    contact to recognize and bring together concerns of all the
    participating parties across the relevant jurisdictions.
               regional competitive program as currently mandated
        Guided by language in the fiscal year 1996 conference committee
    report (House Report 104-259, pp. 33-34) the USGS and Institutes
    implemented a different mechanism to allocate Section 104(b)
    institutional grant funds. Last year, a base grant of $20,000 was
    provided to each of the 54 Institutes and the balance of the funding
    was equally divided into four regional pools. Research priorities
    focusing on regional problems of each of the four regions were
    established and circulated among potential research investigators
    within each of the respective regions. Institutes within each of the
    regions then applied for research project funding on a competitive
    basis.
        Having now gone through this new process one time, it is clear to
    us that it is not a very cost effective mechanism for allocating
    funding and it is extremely cumbersome to administer. Projects selected
    for funding were of very high quality, but no better than projects
    which had been selected under the former system of making competitive
    awards in each of the states. Of greater concern to us is that the
    regional competition process bypasses important state priorities
    established by state advisory boards who have, for many years, guided
    each of the state programs. States put far more money into the
    Institute program than the base funding provided by the USGS and state
    water managers now feel left ``out of the loop'' when it comes to
    providing input to funding decisions. Providing state dollars used to
    match projects which may not be of direct interest or benefit to the
    state does not make much sense to them. Use of Section 104(b) funds for
    the regional competition program is a significant departure from the
    state/federal partnership envisioned in the authorizing legislation. We
    feel the structure of conducting regional and national research would
    be best handled under the authorized 104(g) program, rather than under
    the state-based 104(b) program, as this language directs.
        In conclusion, we believe that the productivity of the Institute
    Program and the evidence of increasing demand for the program speak
    convincingly to the need for continued funding for the Water Resources
    Research Program. The National Institutes for Water Resources are
    grateful for your continuing support of this important state-based
    program. Thank you very much.
                                     ______

        Prepared Statement of the Coachella Valley Mountains Conservancy

        The Coachella Valley Mountains Conservancy appreciates this
    opportunity to seek the Subcommittee's support for a $1 million
    appropriation to BLM for acquisitions in the Santa Rosa Mountains
    National Scenic Area and for an appropriation to assist NCCP planning
    efforts in southern California.
        The Santa Rosa Mountains National Scenic Area is the large mountain
    range that forms the backdrop of Palm Springs and Palm Desert, and is
    often featured in the Skins golf tournament. The mountains rise quite
    steeply from the desert floor to San Jacinto Peak at 10,800 feet, going
    through five life zones from Sonoran desert to alpine. They are home to
    the peninsular bighorn sheep and several other endangered species.
    There are dozens of palm oases dotting the canyons and mountainsides,
    including Palm Canyon where thousands of palms stretch for miles in the
    largest fan palm oasis in the United States. Cultural resources also
    abound, including Cahuilla Indian village sites along various creeks
    and oases, ancient trails leading from village to village and to food
    gathering locations, rock art, ceremonial sites, and cremation sites.
    Of great importance to the Coachella Valley's economy, hundreds of
    thousands of people who come to the desert each year for vacation enjoy
    our mountains, whether just the view from the fairway or their hotel
    room, or on a visit to the Indian Canyons Heritage Park, a paid jeep
    ride in Palm Canyon, a tram ride to the pine forests, a guided hiking
    tour, or the fastest growing set of uses: on foot, horseback, or
    mountain bike to enjoy the solitude and magnificence of the back
    country.
        The mountains don't just define the valley geographically; they are
    truly the soul of the Coachella Valley. They define it visually and
    emotionally for the residents and visitors on whom our local economy
    depends. The mountains have brought together the cities and the people
    of the valley in a unique partnership with state and federal agencies.
    One expression of that partnership is the Conservancy's Governing
    Board, made up of representatives of seven city councils, the County
    Board of Supervisors, three citizens appointed by the Governor, the
    state Senate, and the state Assembly, the Bureau of Land Management,
    the U.S. Forest Service, the Agua Caliente Band of Cahuilla Indians,
    the California Resources Agency, the University of California, the
    Department of Fish and Game, the Wildlife Conservation Board, and the
    Department of Parks and Recreation. The Conservancy's primary mission
    is to protect the mountains surrounding the Coachella Valley, and our
    acquisitions to protect key areas are all done through partnerships.
    This past year our partnership completed an acquisition in which the
    state's Wildlife Conservation Board and the Bureau of Land Management
    both purchased portions of a 3,000 acre property which the Conservancy
    had been able to option from the owner.
        This coming year we have two more partnership acquisitions lined
    up. The City of Palm Desert wants to cooperate with BLM to purchase a
    property which is proposed for development in the mountains overlooking
    our city. The property sits above Deep Canyon, a major University of
    California Biological Research Center, and is adjacent to the BLM's
    Santa Rosa Mountains National Scenic Area Visitors Center. The City has
    committed $1 million towards the acquisition if BLM will contribute
    some LWCF funds to work with it. The City's goal is to purchase this
    property in phases over the next several years.
        At the other end of the valley is the Snow Creek area which is the
    scenic gateway to the Coachella Valley, and in particular the City of
    Palm Springs. The City has committed matching funds along with the
    Conservancy for a state grant which will enable us to initiate
    acquisitions here. The Conservancy has been working with local
    landowners and we already have more than 1,100 acres of land available
    to us to purchase. Between the city's and the conservancy's matching
    funds and the state grant we expect to receive, we have $500,000 to
    expend. We're looking for a BLM contribution from LWCF, and another
    state contribution from the Wildlife Conservation Board over the next
    two to three years to help acquire the balance of the land.
        The Snow Creek land, like the Palm Desert land, is not important
    just for its scenic qualities, though these are unmatched anywhere.
    Both these areas also figure prominently in a Multiple Species Habitat
    Conservation Plan which covers the entire Coachella Valley and the
    surrounding mountains. The cities, the county, and all the state and
    federal agencies are actively involved in preparing this plan. BLM, for
    example, has committed a GIS person to the effort to work with
    Conservancy staff, and BLM biologists have helped with biological
    surveys. This is perhaps the most cooperative MSHCP effort anywhere.
    The Advisory Group for the effort includes groups as diverse as the
    Sierra Club and the Building Industry Association, and they are
    committed to working together in harmony. For a variety of reasons, not
    the least of which is our past history of success in these kinds of
    efforts going back to the mid 1980's when we developed the second
    habitat conservation plan in the nation for an endangered species, our
    valley has learned that all interest groups accomplish a great deal
    more by working together pragmatically and honestly rather than
    fighting and bickering.
        Land and Water Conservation fund money has been well spent in the
    Santa Rosa Mountains Scenic Area because of these partnerships. The
    money is an investment in more than land. It's an investment in a model
    of local, state, and federal agencies working successfully together,
    and working cooperatively with diverse private sector groups.
        Regarding the Multiple Species Habitat Conservation Plan effort, we
    recently became the first non-coastal sage scrub Natural Communities
    Conservation Plan effort in California. This means that we now qualify
    for some of the NCCP--or Natural Communities Conservation Plan--funding
    which Congress has appropriated in recent years. And just as we have
    with acquisition efforts, we bring a very real partnership to the
    MSHCP/NCCP funding effort. Since we began the planning effort two years
    ago, the funding for it has been almost exclusively local, from local
    grants, local mitigation fees, and local cash contributions from
    conservation groups and the Building Industry Association. BLM has
    contributed a small but very valuable amount of cash and several state
    and federal agencies have made in-kind contributions of staff time. Our
    eligibility for NCCP planning funds will help us complete the plan in
    the next two years. So in addition to seeking your support for LWCF
    acquisition funds to the BLM, the Conservancy also seeks your support
    for continued appropriations for NCCP planning funds. And with the
    number of successful NCCP efforts underway in five southern California
    counties (San Diego, Orange, Riverside, San Bernardino, and Los
    Angeles), it would help tremendously if the amount were increased from
    $2 million to $3 million.
        The Conservancy appreciates your help in previous years, and very
    much hopes to have that same assistance this year to further the
    extremely successful partnerships in the Coachella Valley.
                                     ______

          Letter From Todd Kellstrom, Mayor, City of Klamath Falls, OR
                                     Klamath Falls, OR, April 10, 1997.
    Hon. Slade Gorton,
    Chairman, Senate Interior Appropriations Subcommittee,
    Washington, DC.
        Dear Mr. Chairman and Members of the Senate Interior Appropriations
    Subcommittee: The City of Klamath Falls is supporting the fiscal year
    1998 appropriations request of the Upper Klamath Basin Working Group
    which was established by Senator Hatfield in the Oregon Resources
    Conservation Act of 1996. The City of Klamath Falls has been an active
    member of the organization since it was first established as the
    ``Hatfield Klamath Basin Working Group'' in early 1995.
        The Senator's charge to the new Upper Klamath Basin Working Group
    was to review conservation and wetland issues in the basin and then
    recommend appropriate solutions and projects which would be supported
    by all group members and benefit the Upper Klamath basin. Original
    funding in fiscal year 1996-97 helped establish such programs as Tulana
    Farms Wetlands Restorations, BLM Wood River Wetlands Restoration and
    projects of the Ecosystem Restoration Office (ERG).
        In March 1997, the Upper Klamath Basin Working Group identified a
    third set of restoration projects for implementation under the one
    million dollar ($1,000,000) authorization of the Oregon Resource
    Conservation Act of 1996. These projects include federal, state or
    local matches and are listed as follows:
        1. Restoration of springs in the Sprague and Williamson River
    systems, proposed by the Klamath Tribes, $160,000.
        2. Field trials for an integrated pest management plan on the
    Tulelake and Lower Klamath National Wildlife Refuges, proposed by New
    Horizons Technology, contractor to the U.S. Fish and Wildlife Service,
    $30,000.
        3. Development of a Juniper management program, proposed by the
    Oregon Department of Fish and Wildlife, $100,000.
        4. Riparian fencing and wetland restoration at various locations,
    proposed by Ducks Unlimited, Western Regional Office, Rancho Cordova,
    CA., $150,000.
        5. Riparian protection and stream structures on three parcels of
    private lands, proposed by the Klamath Soil and Water Conservation
    District, $243,350.
        6. Wetlands restoration of Sevenmile Creek, proposed by Water for
    Life, $200,000.
        7. Support for a Geographic Information System center at Oregon
    Institute of Technology, $123,000.
        8. Implement a Bull Trout restoration strategy, proposed by the
    Bull Trout Working Group, $50,000.
        9. Install fish barriers to protect Bull Trout in Sun Creek,
    proposed by the Bull Trout Working Group, $20,000.
        The Working Group also developed a consensus to recommend an
    additional budget request to fund:
        1. The continuation of wetlands restoration work on the Wood River
    Ranch by BLM, $500,000. This is an on-going restoration project of
    3,200 acres.
        2. Implementation of ``Sump Rotation'' as a tool for wetlands
    management and development on the Tulelake National Wildlife Refuge,
    $1,220,000.
        The Upper Klamath Basin Working Group continues to be supported by
    a wide range of differing interests, Klamath Tribes, Oregon Department
    of Fish and Wildlife, Agriculture, Grazing, Industries, City of Klamath
    Falls, Klamath County, Conservation Groups, Oregon Governor's Office,
    Federal agencies and private citizens. There is also coordination
    within the two state (Oregon and California) area with the Klamath
    Rivers Fisheries Task Force, the Klamath River Compact Commission, and
    the Trinity River Task Force. These groups work on developing support
    through consensus building so that all may agree and support the
    resulting actions and funds.
        Therefore, the City of Klamath Falls respectfully requests that you
    appropriate the $1 million, as authorized under the Oregon Resources
    Conservation Act of 1996, for the nine restoration projects identified
    above for the Upper Klamath Basin in fiscal year 1998. In addition,
    supplemental funding to accomplish the Wood River Wetlands restoration
    and the ``sump rotation'' on the Tulelake National Wildlife Refuge. The
    total restoration effort will provide solutions that can lead to
    recovery of the endangered sucker, downstream salmonids, and potential
    future endangered species listings. These projects will also help the
    agriculture communities, the City and County, Native American tribes,
    as well as commercial interest on the Klamath River both in Oregon and
    California.
                Respectfully submitted,
                                                Todd Kellstrom,
                                                                 Mayor.
                                     ______

      Prepared Statement of Commissioner Joe Judd, on Behalf of the Kane
                            County, Utah Commission

    Fiscal year 1998 Request: $820,000 for the ``Partnership
            Demonstration'' program with the Bureau of Land Management for
            the Grand Staircase-EscaLante National Monument
        Mr. Chairman, and members of the Subcommittee on Interior and
    Related Agencies; I would like to express my great appreciation to you,
    on behalf of the Commissioners and people of Kane County, for allowing
    us to testify regarding the Grand Staircase-Escalante National
    Monument--and the resulting impacts of the monument on both the land
    and residents of Kane County.
        Let me begin by saying that our initial reaction to the surprise
    announcement by the President was one of great anger and frustration at
    being left out of the deliberations. However, despite our
    disappointment, we collectively decided to be included in any future
    deliberations and decisions that will so greatly affect our lives. We
    subsequently accepted an offer by the Secretary of the Interior to
    participate smith the Bureau of Land Management in the three-year
    assessment and planning process.
        We signed a Cooperative Agreement with the Bureau which will
    provide up to $200,000 in fiscal year 1997 to ``* * * facilitate the
    improvement of the economic, cultural, and other resources of the
    county and to facilitate the BLM's planning process for the Monument.''
    Our first responsibility is to develop an analysis of county
    infrastructure requirements, law enforcement, transportation needs,
    search and rescue and other impacts due to the designation of the
    monument.
        Through our initial assessments, we estimate that Kane County's
    funding requirement to continue in the planning process in fiscal year
    1998 is $250,000. We are requesting that this agreement be established
    in the appropriations bill as a ``Partnership Demonstration'' line-item
    for the planning effort with the BLM.
        Additionally, there will be a great increase in the demand for
    basic emergency services as a direct result of the monument designation
    and will require a minimum of $570,000 in fiscal year 1998.
        This comes to a total of $820.000.
        It is clear that we must quickly prepare for the consequences of
    putting this area on the tourist map. The character of the area is
    seductive and inviting, but very harsh and unforgiving on those who are
    unprepared. We anticipate a very sharp increase in persons getting lost
    in the area, or stranded, hurt or worse. Kane County, at this point, is
    simply unable to adequately carry out public safety services of search
    and rescue and related health, sanitation and law enforcement
    requirements that will be immediately essential.
        Mr. Chairman, this is not a Kane County Monument, this is a
    National Monument. It was created by the President of the United States
    on behalf of the American people. The proclamation was widely and
    warmly supported by the American people. And, as far as I know, it has
    never been deliberate U.S. policy or practice to simply dump all of the
    responsibilities and costs of a National Monument off on the citizens
    who happen to live adjacent to the boundaries.
        The costs to provide a suitable monument experience, both inside
    and outside of the boundaries will be significant. I doubt that there
    are few people, including the President, who have an appreciation for
    just how large and diverse these monument lands are. This was an
    enormous decision with enormous consequences. The area takes in about 2
    million acres. That is 3,125 square miles. About 70 percent of this,
    about 2,590 square miles, is in Kane County. The monument is larger
    than Manhattan and Long Island combined--it is about the size of the
    state of Delaware. But it is much more than big. It is a very diverse
    topography that ranges from the very stark--without any vegetation--to
    the more familiar red cliffs and forests highlighted by the media.
        We believe, as the President does, that it should be seen, and
    certain segments could provide an outstanding monument experience with
    sufficient care and with sufficient resources. Of course, large parts
    of the area are less accessible, and will be difficult to view,
    resulting in very low visitations. Some areas are very fragile and
    should be protected from visitations.
        But whether we want people come to the monument or not, or if there
    is adequate access or not, it is too late. They are arriving already
    and will continue to come in larger and larger numbers. The President's
    proclamation has, in effect, changed the character of the area forever.
        The infrastructure to support visitors (access roads, basic
    sanitation facilities, good accommodations and information, both in and
    beyond the boundaries of the monument) simply does not exist. That, of
    course, is the purpose of our planning process. And because the
    facilities and infrastructure adjacent to the monument are as critical
    as those within, we believe our participation is not a privilege but an
    obligation on the part of the government; even a responsibility on our
    part.
        But within the obligation, we have seen an opportunity--an
    opportunity for the Federal Government to establish a Partnership with
    Kane County. Not just some vague ``input,'' but a separate and
    essential role in that partnership.
        This is an opportunity to demonstrate to other, and very skeptical,
    local governments, throughout the United States, that the Federal
    Government is sincere when it states, as the President did, that this
    is ``* * * the beginning of a unique three-year process during which
    the Bureau of Land Management will work with state and local
    governments * * *'' to set up a land management process.
        Fiscal year 1998 funding will allow us to continue in the direction
    we have already begun with the Cooperative Agreement. The agreement is
    a very ``unique'' beginning and it is working. We have begun a planning
    process that is based on cooperation, open communications, and
    fledgling trust. We have been persuaded to reach out to the government
    and say--``Okay we will give it a try. We will take a risk.'' But there
    are any number of people who are saying that we are crazy to trust the
    government.
        Well, I hope not. So we are asking you, the Federal Government: Do
    not abandon us now that we have made a commitment.
        I met with Secretary Babbitt and I was convinced of his sincerity
    when he said he wanted this process to work. And the BLM has said
    repeatedly that they believe a local partnership with full cooperation
    is a great benefit to them in managing the largest national monument in
    the lower 48 states.
        As the members of the committee know, this is the first National
    Monument for the Bureau of Land Management. We support the decision by
    the President to retain management of the area with the Bureau. The
    President stated in his announcement at the Grand Canyon that the
    monument was to be continued in multiple-use management. That is a
    critical consideration both in the retention of the BLM and the
    inclusion of the local government's participation in planning, and
    where appropriate, decision making.
        It is my understanding that the President's budget calls for an
    additional $5,000,000 for the monument. We think that is an important
    level of funding, but Kane County requires the additional amount of
    $820,000, at least for fiscal year 1998. It may be ultimately possible
    to discover or create the means for the monument to pay for itself
    through fees or other mechanisms. But for the immediate future a
    sufficient level of funding is critical to provide the basic services
    for these new visitors. Kane County simply does not have the money.
        We have heard it said already, Mr. Chairman, that Kane County will
    experience an amazing and lucrative boom--a windfall--because of all
    the increased tourism that the monument will generate. The truth is, we
    fervently hope that the predicted flood of tourists does not occur--
    especially in the next year or two. For each tourist dollar brought in,
    it costs the county $1.25 to provide all of the needed services: law
    enforcement, visitor aid, indigent care, as well as other community
    resources to provide for fire protection, and water and sewer services.
        Tourism on its own does not provide a stable economy. It is both
    seasonal and a second wage-earner employer. Kane County, is an area of
    4,800 square miles, but the county has less than 7,000 permanent
    residents. Public lands comprise 95 percent of the county. There are
    very few families supported by primary jobs; for the most part our
    families are forced to survive on minimum wage jobs. This provides a
    very low tax base. And, because of the lack of primary jobs, young
    people are unable stay in the county. In Utah, persons in the 25-34 age
    group make up 25 percent of the population. But in Kane Co., it is 17
    percent. When our young people graduate from college, we say,
    ``Congratulations, and goodbye.'' We have a disproportionate share of
    25-30 year old heads of households earning less than $15,000 per year.
    The poverty level for a family of five is $14,990 per year.
        The hope for Kane County was to have been in the Smoky Hollow mine,
    an underground coal mine which was being reviewed through the EIS
    process as established by the Environmental Policy Act. The mine was to
    provide jobs--primary jobs--and provide desperately needed revenues for
    the schools and for basic county services. Our county's recreation and
    transportation special services district loses $500,000 per year and
    will continue to do so for a period beyond our life spans. Our county
    has an assessed tax base of $300 million. The Andalex facility would
    have added $90 million to our tax rolls.
        Any prospect for the mine has apparently been eliminated. In fact,
    the President mentioned the mine by name in his declaration statement
    at the Grand Canyon. He said ``I am concerned about a large coal mine
    proposed for the area * * *'' and went on to say that he hoped that
    ``Andalex'' will find a way to pursue its mining operations elsewhere.
    He said ``* * * we shouldn't have mines that threaten our national
    treasures.''
        Well, we did not agree with that assessment, but that is way beyond
    our ability to affect. All we can do now is look forward and try to
    build a future for our children. We can also help to build a monument.
    Together, we can provide a proper monument experience without degrading
    the environment or the quality of life of a people who have lived in
    harmony with the land for generations.
        Mr. Chairman, we are hopeful that the cooperation between the
    Federal government and local government will continue to be supported.
    We are beginning to record the history of this partnership and at the
    same time create a video and other materials which will provide
    information to the public, and we welcome your participation.
        We do not represent any narrow point of view or philosophy. We have
    a planning process that is open to all citizens and the very diverse
    citizen groups. All we ask of the Congress is the opportunity to
    continue to be a part of this new and unique opportunity to create a
    great monument that protects the landscape and provides a variety of
    multiple uses for the benefit of all people.
        We do not have any money, we have very few votes, and no power. We
    do not come here today with threats--just a simple request that we not
    get brushed aside--discarded--as others rush in to command or make
    convenient and ``low-cost'' but short-sighted decisions that will
    foreclose the hopes and expectations of the American people who warmly
    supported the decision to create a new monument.
        We invite you to come to Kane County--come see it for yourselves.
    The subcommittee staff have visited the area, but snow conditions
    decreased mobility even while increasing the aesthetic qualities of one
    of the most beautiful areas of the world.
        Thank you again for the opportunity to testify on behalf of the
    county and I welcome whatever questions you may have.
                                     ______

      Prepared Statement of Jack A. Barnett, Executive Director, Colorado
                       River Basin Salinity Control Forum

        This testimony is in support of funding for the Colorado River
    salinity control program. The Bureau of Land Management has chosen to
    reformulate its budgeting process so as to support ecosystems and
    watershed management. The activities needed to control salinity being
    contributed from the BLM lands are a part of ecosystem and watershed
    management. Because the budgeting process lumps all activities
    together, we can only presume that there is adequate dollars in the
    President's budget to move ahead with the water quality enhancement and
    protection programs needed in the Colorado River drainage to ensure
    that the salts in excess amounts are not contributed to the river
    system. Our analysis indicates that the Bureau of Land Management needs
    to specifically target the expenditure of funds in the amount of
    $4,500,000 to salinity control in fiscal year 1998.
                                    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. 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 cost share between 25
    and 30 percent of these 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.'' The 1993 Review of water quality standards includes
    an updated plan of implementation. The level of appropriation requested
    in this testimony is in keeping with the agreed to plan. 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 BLM is, by far and away, the largest landowner in the Colorado
    River Basin. Much of the lands that are controlled and managed by the
    Bureau of Land Management are heavily laden with salt. Past management
    practices, which include the use of lands for recreation; for road
    building and transportation; for oil, gas, and mineral exploration; and
    most importantly, for grazing, have led to man-induced and accelerated
    erosional processes. When soil and rocks heavily laden with salt erode,
    the silt is carried along for some distance and ultimately settles in
    the streambed or flood plain. The salts, however, are dissolved and
    remain in the river system causing water quality problems downstream.
        The Forum believes that the federal government has a major and
    important responsibility with respect to controlling pick-up of salt
    from public lands. Congress charged the federal agencies with
    proceeding with programs to control the salinity of the Colorado River,
    with a strong mandate to seek out the most cost-effective options. It
    has been determined that BLM's rangeland improvement programs can lead
    to some of the most cost-effective salinity control measures available.
    These salinity control measures are more cost-effective than some now
    being implemented by the Bureau of Reclamation and by the Department of
    Agriculture. They are more environmentally acceptable, as they will
    prevent erosion, increase grazing opportunities, increase dependable
    stream runoffs, and enhance wildlife habitats.
        Through studying hundreds of watersheds in the States of Utah,
    Colorado, and Wyoming, the BLM has selected several watersheds where
    very cost-effective salinity control efforts could be implemented
    immediately. In keeping with the Congressional mandate to maximize the
    cost-effectiveness of salinity control, the Forum is requesting that
    out of the overall requested and authorized budget the Congress
    appropriate and the administration allocate adequate funds to support
    the Bureau of Land Management's portion of the Colorado River salinity
    control program as set forth in the adopted plan of implementation.
                 details concerning the requested appropriation
        After conferring with BLM officials, the Forum believes there needs
    to be spent in fiscal year 1998, by the Bureau of Land Management,
    $4,500,000 for salinity control. We are particularly concerned that the
    line-item titled Management of Lands and Renewal Resources is
    adequately funded.
        The Forum believes that although it is commendable for the
    administration to formulate a budget that focuses on ecosystems and
    watershed management, it is essential that funds be targeted on
    specific sub-activities and the results of those expenditures reported;
    this is necessary for accountability and for the effectiveness of the
    use of the funds. The Forum requests that the Committee require
    accounting by the Bureau of Land Management in such a way that the
    results of their activities in connection with the expenditures the
    funds can be reviewed and measured.
                                     ______

         Prepared Statement of Cyrus M. Jollivette, Vice President for
           Government Relations, on Behalf of the 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 continued support for a major
    environmental initiative within your purview, the South Florida
    Ecosystem Restoration Prediction and Modeling Program (SFERPM).
        Florida Bay is a triangularly shaped body of water about 2200 sq.
    km in area. Over 80 percent of the Bay lies within Everglades National
    Park. The Bay is bounded by the Florida Everglades on the north and the
    Florida Keys on the southeast. In the Bay over 200 small islands or
    ``keys'' occur, many of which are rimmed with mangroves and have
    interior, irregularly flooded, ``flats'' with calcareous algal mats.
    The Bay is shallow, often hyper-saline, and, until recently, was
    characterized by clear waters, and lush sea grass meadows covering a
    mosaic of shallow water banks and numerous relatively deeper water
    basins or ``lakes''. Deep narrow channels connect neighboring basins.
    Hard bottom habitats in southwestern Florida Bay support sponge and
    hard and soft coral communities.
        Florida Bay is known as the principal inshore nursery for the
    offshore Tortugas pink shrimp fishery, for providing critical habitat
    for juvenile spiny lobster, stone crab, and many important finfish
    species. While the Bay is the site of an extensive sport fishery, it is
    also important as a nursery area for many recreationally important
    finfish in the Florida Keys National Marine Sanctuary. Moreover, the
    Bay supports numerous protected species included the bottlenosed
    dolphin, several species of sea turtles, manatees, and the American
    crocodile.
        There are many indications that the environmental health of Florida
    Bay has deteriorated. Fishing success has declined for many of the
    species that depend upon the Bay as a juvenile nursery habitat.
    Atypical algal blooms, attributing to sponge and manatee dieoffs, are
    occurring in the Bay and Florida Keys. Mangroves appear to be in
    decline. While the causes of the various problems and the relationships
    between them are not well understood, there is no question that, like
    the sawgrass habitat of the Everglades, the coastal marine ecosystem of
    Florida Bay is in jeopardy.
        The objective of the South Florida Ecosystem Restoration Prediction
    and Modeling Project is to provide decision-makers who are working to
    restore and maintain a healthy South Florida coastal ecosystem with
    reliable scientific information. At present there is insufficient
    knowledge to predict with confidence the consequences of alterations in
    freshwater input to Florida Bay.
        Since no one can turn back the clock and South Florida's rapid
    development will almost certainly continue, a series of compromises and
    tradeoffs will have to be made in restoring and maintaining a healthy
    South Florida coastal ecosystem including Florida Bay. It is essential
    that decisions be made based on reliable scientific information. That
    is the objective of the South Florida Ecosystem Restoration Prediction
    and Modeling program. Which is collaboratively managed and conducted by
    the National Oceanographic Atmospheric Administration's Atlantic
    Oceanographic and Meteorological Laboratory and the National Marine
    Fisheries Service Miami Laboratory and the Rosenstiel School of Marine
    and Atmospheric Science.
        My colleagues at the Rosenstiel School of Marine and Atmospheric
    Science urge you, Mr. Chairman, to provide $6 million in dedicated
    funding for SFERPM. This project is a multi-agency activity in which
    more than 80 Florida entities are at work seeking solutions to these
    critical issues.
        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 providing dedicated support
    for the South Florida Ecosystem Restoration Prediction and Modeling
    program so that sufficient information is available upon which to base
    decisions for maintaining a healthy South Florida coastal ecosystem
    including Florida Bay.
                                     ______

       Letter From B. Sharon Meeker, Chairperson, Lamprey River Advisory
                                   Committee
                                        New Market, VA, March 17, 1997.
    Hon. Slade Gorton,
    Chair, U.S. Senate, Interior Appropriations Subcommittee,
    Washington, DC.
        Dear Senator Gorton: The Lamprey River Advisory Committee is
    writing request your support of appropriations for two National Parks
    Service programs: The Wild and Scenic River Coordinator Program; and
    the Watershed implementation Program, under the Rivers and Trails
    Conservation Assistance Program.
                 a. wild and scenic river coordination program
        The Lamprey River was designated into the National Wild and Scenic
    Rivers System in November of 1996. Our local River Management Advisory
    Committee has successfully developed a River Management Plan with the
    invaluable assistance of the National Parks Service. To foster the
    implementation of this Plan, our Committee hopes to have the continued
    support of the Parks Service in coordinating efforts between us and
    appropriate state and federal agencies--an often daunting role for
    local citizens
        While our goals have been defined and accepted by our towns, our
    Committee frequently relies upon the knowledge and experience of Parks
    Service staff to help us choose the best means for accomplishing those
    goals. We are in particular need of NPS technical advice in reviewing
    development proposals affecting the river and in designing future
    studies which will help us in our mission.
        Some specific examples: First: a golf course on miles of river
    frontage has been proposed. The NPS has helped our Committee to contact
    the state and federal agencies able to help us evaluate and comment on
    the proposal. Second: in order to meet the River Management Plan goals
    of preserving important habitat, our Shoreland Conservation
    Subcommittee needs fieldwork done to identify key lands. The NPS helps
    to find those experts, oversees the studies, and connects us with
    public and private organizations which can offer landowners incentives
    for protecting those areas. Third: an early dam and mill site on the
    National Register of Historic Places, long neglected, has become a
    public safety hazard and was being closed off from the public. An NPS
    planner is working with neighbors and town officials to redevelop the
    area so it is a safe passive recreation and historic area with good
    access.
        The Lamprey River Advisory Committee is counting on the continued
    help of the National Parks Service under this program to make the
    nation's newest Wild and Scenic River an asset to all.
                        b. watershed plan implementation
        After achieving Wild and Scenic designation for the lower three
    towns in the Watershed, it has become obvious that achieving our
    Management Plan goals must involve the whop Lamprey Watershed. Based on
    surveys of riverfront landowners and data from State agencies, the
    Lamprey's Local River Advisory Committee has taken a particular
    interest in point- and nonpoint-source pollution originating both
    within and upstream of the Wild and Scenic designated river segment. We
    are also concerned about the need for river resource protection in some
    upstream towns.
        With the help of the National Parks Service, the Lamprey River
    Management Advisory Committee has just initiated an outreach effort to
    support other conservation groups throughout the Watershed. Our goal is
    to coordinate more consisted protective land and water use policies and
    public education/public support efforts in the nine towns.
        The Parks Service has helped us break the ice with upstream towns.
    Expanding our efforts to include another 30 miles of river and hundreds
    of square miles of watershed is a challenge, and we are relying heavily
    on NPS expertise. The Northeast Regional Office has proven invaluable
    in guiding our initial efforts, arranging for an intern from the
    Quebec-Labrador Foundation to help produce the first watershed-wide
    newsletter. This effort connected conservation-minded groups throughout
    the area in a common effort that is already bearing fruit.
        As drought strikes the Northeast more frequently, we are also
    concerned-with water withdrawals from the river, especially coupled
    with wastewater treatment plant discharges into it. This must be
    addressed in a watershed-wide effort We are looking forward to Parks
    Service technical assistance in researching options and negotiating
    with the various interests involved.
        In sum, the Lamprey River Management Advisory Committee is deeply
    appreciative of the support of the National Parks Service in providing
    guidance, technical assistance and coordination with public and private
    organizations in helping us reach our goals for the enhancement and
    protection of the Lamprey River. We ask that you support the
    appropriations for the Wild and Scenic River Coordination Program and
    the Watershed Plan Implementation program under the Rivers and Trails
    Conservation Assistance Program.
                Sincerely,
                                              B. Sharon Meeker,
                                                                 Chair.
                                     ______

    Prepared Statement of Eric Hertfelder, Executive Director, on behalf of
        the National Conference of State Historic Preservation Officers

    national conference of state historic preservation officers request for
            fiscal year 1998 from the historic preservation fund \1\
    State Historic Preservation Programs....................     $31,000,000
    National Trust for Historic Preservation................       3,500,000
    Tribal grants/Tribal Preservation Offices...............       2,750,000

          national conference of state historic preservation officers
        The National Conference of State Historic Preservation Officers is
    the professional association of the State Historic Preservation
    Officers, the officials designated by each State's governor to act for
    the Secretary of the Interior in carrying out the National Historic
    Preservation Act (16 U.S.C. 470) within each State.
       historic preservation fund: the keystone of historic preservation
        The Nation's approach to historic preservation is based on team
    work. Beginning in the 1960's, the federal government defined a
    national approach to the preservation and productive use of our
    heritage and asked the States to do the work--and pay half the cost.
        The Historic Preservation Fund provides the essential foundation
    for the national historic preservation program. The federal dollars
    attract the State, local and private match; the federal dollars provide
    the incentive for States to team up for preservation and run the
    nation's preservation program within their borders.
        Without that federal investment, States lack the incentive and the
    ability to run the nation's program and would focus solely on State
    initiatives.
           where the historic preservation fund goes: the states \2\
        A. Survey: ``Ground zero'' for the national historic preservation
    program is historic sites survey: locating and recording places that
    are part of the nation's 13,000 year history. State Historic
    Preservation Offices maintain maps, photographs and written
    descriptions of the historic places within their borders.
        B. National Register: The National Register of Historic Places is
    the national standard for defining historic significance, defining
    which properties should receive historic preservation treatments and,
    importantly, which will not.
        C. Planning: State Historic Preservation Offices, working with the
    public, take a comprehensive look at their State, their State's
    historic resources, opportunities and needs and craft a set of
    priorities for historic preservation actions.
        D. Local governments: Since 1980, local governments have had the
    option of becoming official partners with State Historic Preservation
    Of fires. Certified local governments' primary responsibility is
    participation in the National Register nomination process. However,
    States and certified local governments agree on other partnership
    activities. In Georgia, several certified local governments assume the
    State Historic Preservation Office's role in consultation with federal
    agencies.
        E. Rehab tax credit: State Historic Preservation Offices' work with
    developers interested in investing in the rehabilitation of National
    Register-listed buildings.
        F. Federal agency coordination and consulting: State Historic
    Preservation Offices assist federal agencies and applicants, on roughly
    100,000 projects nationally each year, in avoiding harmful effects to
    historic places.
        G. Monitoring past restoration grant easements: State Historic
    Preservation Offices continue to monitor the covenants placed on
    properties that received grants (Pre-1981).
        H. Public education: Providing information and training on historic
    preservation is an on-going responsibility of State Historic
    Preservation Offices from monthly newsletters, to annual conferences,
    to local government training.
                     what the federal investment has earned
        A. Construction generated through historic rehabilitation credits:
    \3\ $757,000,000 for fiscal year 1996 from 509 projects rehabilitated
    following the Secretary of the Interior's Standards for Rehabilitation.
    State Historic Preservation Offices assisted developers in the three-
    part review process prior to the National Park Service staff re-review.
        B. New housing units: 6,009 units of housing of which 3,513 are
    low/moderate income were created in fiscal year 1996 because of the
    rehab credits.
        C. Interest in heritage: In the thirty years since the National
    Historic Preservation Act, historic preservation has entered the
    American vocabulary. The success of such magazines as Colonial Homes,
    and television programs as ``This Old House,'' attests to the interest
    in historic preservation among the general public. Analysis of tourism
    statistics shows that visiting historic sites ranks high (second
    highest motivator for tourists--in Massachusetts, Virginia and
    Maryland) among the reasons for tourism. The spontaneous popularity of
    heritage areas across the country spans the nation from Tracks Across
    Wyoming, to Silos to Smokestacks in northeastern Iowa, to the Ohio and
    Erie Canal, to Essex County in Massachusetts.
        D. Inventories are the foundation for heritage area development and
    cultural tourism:
        1. The Alaska Gold Rush Centennial Task Force is co-chaired by the
    State Historic Preservation Officer and the State director of tourism
    and involves a decade-long program. 1996 projects included
    commemorative license plate, a Gold Rush Era Pioneers and Properties
    Recognition Program, a U.S. postage stamp and a historic signage
    project in cooperation with the State transportation department.
        2. Pennsylvania heritage parks program started with research done
    by the Bureau of Historic Preservation from their inventories of
    historic sites. Currently the Pennsylvania Office is preparing a
    historic context on the anthracite coal industry making it easier to
    assess the significance of coal industry resources and providing
    information for interpretation of historic sites.
        3. California State Historic Preservation Office is working with
    Mexico's National Institute of Anthropology and History on the El
    Camino Real Misionero de Las Califomias Heritage Corridor. The
    international agreement was signed on April 27, 1997. The New York
    Times on Sunday January 26, 1997, recognized the work of Mario Sanchez
    of the Texas State Historic Preservation Office on the Los Caminos del
    Reo heritage area.
        4. The Alabama Historical Commission's long-time research historic
    places related to the civil rights movement set the foundation for the
    Federal Highway Designation of designation of U.S. 80 between Selma and
    Montgomery as an All American Highway and National Historic Trail.
        E. Benefits from consultation with federal agencies on section 106:
        1. The Section 106 process opened a dialog between the Alabama
    Historical Commission and federal agencies to prevent the demolition of
    the Montgomery Greyhound Bus Station, a major Civil Rights movement
    historic site, and led to its restoration as a museum and a long-
    distance learning center with connections to students across the
    nation.
        F. Affordable housing:
        1. The Ohio State Historic Preservation Office initiated
    discussions among federal, state and local agencies with housing
    responsibilities which resulted in a State task force on affordable
    housing and historic preservation to facilitate compliance with federal
    standards.
        2. The Illinois State Historic Preservation architect working with
    a HUD-funded rehabilitation in Chicago showed the developer how the
    housing goals could be met within the Secretary of the Interiors
    Standards for Rehabilitation therefore making the National Register-
    eligible building eligible for historic rehabilitation tax credits.
        3. The New Hampshire State Historic Preservation Office encouraged
    the Drewsville Mansion Affordable Housing and Head Start Project in
    Walpole to use the historic rehabilitation tax credit in addition to
    the low-income housing credit for the preservation aspects of the
    1880's stick style building creating links between Southwestern
    Community Services, the New Hampshire Housing Finance Authority, the
    Office of State Planning, and the Preservation Office.
        G. Historic Preservation and industry work together:
        1. American Samoa Historic Preservation Office established a
    partnership with the American Samoa Power Authority to identify
    historic sites, prepare National Register nominations and expedite the
    construction of a sewer line.
        2. The Georgia Power Company funded the reprinting of the Georgia
    State Historic Preservation Office's driving tour publication
    Preserving the Legacy: A Tour of African American Historic Resources in
    Georgia in time for the Olympics.
        3. The First Hawaiian Bank funded the publication of the Hawaii
    State Historic Preservation Office's book On Bishop Street tracing a
    century of history of Honolulu's financial and corporate center.
        H. Rural preservation: historic barns:
        1. The Illinois State Historic Preservation Office's subgrant to
    Kane County, a certified local government, resulted in ``That Darn
    Barn'' calendar which has become a successful tool for promoting the
    significance of rural heritage as citizens face land use planning
    decisions.
        2. The Ohio State Historic Preservation Office and the Ohio State
    University Extension Service conducted workshops for and provided
    notebooks to rural property owners on technical issues related to the
    continued use and preservation of barns.
        3. The New York State Historic Preservation Office provided the
    Governor with ideas on the preservation of historic barns which
    resulted in legislation creating tax incentives for barn owners.
        4. The Wisconsin State Historic Preservation Office's barn
    preservation program includes workshops on preservation techniques and
    a 14,000-entry publication to help owners understand the significance
    of their buildings, prepare National Register nominations and apply for
    federal rehabilitation tax credits.
                                 vi. conclusion
        The State Historic Preservation Of fleers express their
    appreciation to the Subcommittee for its past support. The need to
    identify our nation's historic properties, and to find ways to preserve
    them is continuous, and is a responsibility borne by all levels of
    government as well as the private sector. The Historic Preservation
    Fund programs are key components of the federal government's
    contribution to this effort, and enable the intergovernmental
    partnership that has accomplished so much in the past 30 years.
        Although directed toward appropriations from the Historic
    Preservation Fund, our testimony would not be complete without
    requesting continuing support for our key federal government partners
    the Advisory Council on Historic Preservation at $2.745 million and the
    National Park Service, National Recreation and Preservation, at $42.063
    million.
                                   end notes
        1. NCSHPO request for federal preservation partners: Advisory
    Council on Historic Preservation: $2.745 million, National Park Service
    National Recreation and Preservation: $42.065 million.
        2. The National Conference testimony addresses the State Historic
    Preservation Office programs, not the National Trust or tribal grants.
        3. Source for figures on the rehabilitation tax credit: Heritage
    Preservation Services Program, National Park Service, ``Federal Tax
    Incentives for Rehabilitating Historic Buildings, fiscal year 1996
    Report and Analysis,'' Washington, DC, 1997.
                                     ______

      Prepared Statement of Samuel N. Penney, Chairman, Nez Perce Tribal
                              Executive Committee

        Mr. Chairman, members of the subcommittee, my name is Samuel
    Penney, and I appreciate the opportunity to submit testimony for the
    record. The Nez Perce Tribe appreciates your efforts to solicit our
    views and to stretch scarce federal dollars to meet our needs.
                            cadastral survey station
        As the Committee knows, we have repeatedly sought an appropriation
    to the Bureau of Indian Affairs real property program to assist in the
    establishment of a Bureau of Land Management cadastral survey station
    on the Nez Perce Reservation. The survey is necessary for several
    reasons including the successful management of our natural resources.
    It is also necessary to help Indian and non-Indian residents of the
    reservation in the resolution of boundary disputes. Our reservation has
    been heavily checker boarded through the allotment process over the
    years. Because of the lack of accurate survey data, we are encountering
    a growing number of disputes that arise because of uncertainty of
    property boundaries. The boundary disputes create ill will among the
    residents of the reservation and lead to unnecessary expenditures of
    public and private funds.
        We have recently executed an interagency agreement with the Bureau
    of Indian Affairs and the Bureau of Land Management to establish a
    cadastral survey station on the reservation, if funds are allocated.
    The agreement calls for a budget of $100,000 for fiscal year 1998, with
    an additional $450,000 to be spent over the following four years.
    Establishment of a survey station is a significant commitment by the
    Bureau of land Management and they have requested at least a three-year
    funding commitment. Currently, there are enough boundary disputes to
    require a survey station for at least three years. Given the recent
    experience in only two of these disputes that became highly
    controversial, we believe that the expenditure of funds on a cadastral
    survey is the most cost-effective use of federal funds.
                             wolf recovery program
        We have been proud to participate in the Wolf Recovery Program with
    the U.S. Fish and Wildlife Service. This is the only effort in the
    nation in which a tribe is leading the recovery effort for an
    endangered species. Through a contract with the Service, the Tribe has
    produced the recovery plan for wolves in Central Idaho and is
    implementing the plan, now approved by the Service.
        However, the project is badly under funded. The funding shortfall
    threatens our ability to adequately monitor the new pairs, which are
    scattered throughout fifteen million acres, to determine whether they
    will produce litters this spring. The recovery standard for these
    wolves is reaching ten breeding pairs for three consecutive years. If
    sufficient funds are not available to determine how many pairs are
    breeding, we will be unable to determine when the recovery standard is
    met. We are very pleased with the progress the project has made over
    the last two years, but need additional funds to accurately assess the
    extent of its success. We are asking for a supplemental appropriation
    for fiscal year 1997 of $100,000 and for annual appropriations for
    fiscal year 1998 and following fiscal years of $250,000.
                indian health service clinic construction funds
        The IHS clinic which serves the largest tribal community on the
    reservation is an antiquated, inadequate, hazardous facility. We are
    seeking congressional funding and support for an IHS joint venture
    authorization to replace it. The IHS architectural survey completed
    over two years ago calculated constructions costs for a 17,000 square
    foot facility at approximately 2.2 million dollars. Land has been
    identified on which this facility could be build. The need for a new
    clinic is urgent.
              snake river basin adjudication negotiations funding
        Since 1987, the Nez Perce Tribe has been engaged in an adjudication
    of its water rights in the Snake River basin. This litigation commenced
    by the State of Idaho, is the largest water rights adjudication in the
    entire nation. We are represented in this proceeding by our own in-
    house counsel and by the Native American Rights Fund (NARF) in Boulder,
    Colorado. The litigation has been stayed for most of the last year.
    During this time the Tribe has worked intensively on negotiations of
    its water rights in four separate sets of negotiations, each relevant
    to a particular geographic area covered by the tribal claims. The
    parties, including the Tribe, the Departments of Justice and Interior,
    the State of Idaho, and the private water users in each area have been
    quite successful in narrowing issues. Currently, we are in a critical
    period of negotiations which may determine whether they can ultimately
    succeed. The trial court judge has made it very clear to all parties
    that he will not stay this litigation indefinitely. Therefore, our
    negotiations are increasingly intensive and our funding needs for the
    negotiations are that much more critical.
        For fiscal year 1998, we are requesting $710,000 be made available
    in the BIA's Water Resources and Rights Protection account to NARF for
    its work on the Tribe's behalf. Of that amount, $520,000 would cover
    consultant contracts with experts assisting the Tribe and NARF in the
    negotiations. These would include experts in fisheries and engineering,
    an economist, and the tribal attorney assigned to the case. The
    remaining $190,000 would cover the NARF staff time and expenses for the
    two attorneys and an assistant assigned to the case.
        This concludes our written testimony. Again, thank you for this
    opportunity to submit testimony before the Senate Interior
    Appropriations Interior Subcommittee. Please do not hesitate to contact
    me if I can provide further information regarding our requests on
    behalf of the Nez Perce Tribal Executive Committee.
                                     ______

      Letter From Bobby Whitefeather, Chairman, Red Lake Band of Chippewa
                                    Indians
                                           Red Lake, MN, March 7, 1997.
    Hon. Bill Frist,
    Public Health and Safety Subcommittee, Senate Labor and Human Resources
            Committee, Dirksen Senate Office Building, Washington, DC.
        Dear Senator Frist: I thank you for the opportunity to provide
    written testimony on behalf of the Red Lake Band of Chippewa Indians on
    the Indian Health Service Budget for fiscal year 1998.
        The Indian Health Service (IHS) provides vital health care services
    to Red Lake Band members. Recent attempts by Congress to balance the
    federal budget, at the expense of the health care needs of the Red Lake
    people, has to stop. The continued downsizing and streamlining of the
    Federal government should not be at the expense of the IHS or the
    tribes. We demand that the IHS be spared from future cuts to balance
    the federal budget. We recommend that a separate line of funding be
    established and/or that additional dollars be earmarked for IHS to
    fully fund the health care needs as identified by tribes. If Congress
    cannot fund IHS at 100 percent of actual need, then they should
    authorize the $2.4 billion for fiscal year 1998 as recommended by the
    National Indian Health Board.
        The budget for the Indian Health Service continues to be identified
    as discretionary funding. We recommend that Congress acknowledge the
    IHS as a guaranteed annualized budget line item which is a result of
    treaties made between the United States Government and Indian Nations
    in which the federal government guaranteed health care to Indians in
    exchange for land, timber, minerals and other natural resources. Trust
    responsibility cannot be categorized as discretionary.
        We support the concept of Congress designating IHS as their own
    Department, separate from the Department of Health and Human Services
    or legislation that would elevate the IHS to the Assistant Secretary
    level within Health and Human Services. Either concept would eliminate
    unnecessary bureaucracy and reductions in the IHS budget.
        The concept of ``means testing, or taking into account tribal
    income when making federal appropriations,'' should not be allowed.
    Language needs to be restored that prohibits the billing of an Indian
    for health care based on the Ability to pay and Congress cannot use
    gaming revenues against tribes when funding health care. The health
    care of Indian people is a trust responsibility of the federal
    government and cannot be based on means testing, gaming revenues or
    financial status.
        The Indian Health Service receives funding for only 42 percent of
    the health care needs of Red Lake members. As a result, the Red Lake
    Indian Health Service Hospital and the Red Lake Tribe has had to rely
    on, and subsequently has become dependent on, collections from third
    party sources to provide health care for the Red Lake people. The
    majority of the Hospital's third party collections are from Medicaid,
    totaling almost $3.5 million dollars in fiscal year 1996. Third party
    collections now provide 25 percent of the operating budget at Red Lake.
    Medicaid collections should not be used as a means to reduce or not to
    increase the IHS budget. As Medicaid and welfare reform progress and
    third party collections decrease, we would expect the federal
    government to fund inevitable shortfalls. Medicaid reform proposals
    should include guarantees for full funding of Medicaid eligible Indians
    with a direct set aside for IHS and tribes that is not based on state
    caps.
        The Red Lake IHS Hospital and the Red Lake Tribe have effectively
    used these third party dollars to provide needed health services for
    the Red Lake people. Medicaid recipients at Red Lake are able to seek
    additional health services at other health care facilities throughout
    Minnesota when needed. They do not have to wait until funds are
    available through the IHS to get their health care needs taken care of.
    When Medicare and Medicaid recipients are referred to other health
    facilities, there is very little cost to the IHS. The facility where
    the receipts are sent, bill Medicaid for the services that they
    provide. As the Medicaid and Welfare Reform develops many of these
    people may no longer qualify for this benefit and will have to use the
    IHS Contract Health Services dollars where the priority system is used
    to determine who needs care now and who can wait. This will increase
    the rationing of health care to the Red Lake people. We would also have
    to decrease direct health care services to the people.
        One of the Red Lake Indian Health Service Hospital's major under
    funded cost of providing health care is Contract Health Services. This
    cost occurs when one of our tribal members is referred for additional
    medical services at off reservation private or public hospitals and
    health facilities. The Red Lake Hospital only receives $1 million
    dollars a year for this critical need. These dollars only last about
    six months of each fiscal year. The only reason the dollars last this
    long is that only life threatening emergencies are approved. Many of
    our Indian people are denied this service because their need to be
    referred to alternative and/or continued care is considered non-life
    threatening. They have to wait until the problem is life threatening
    and then it may be to late. Some of our members never get their health
    problem taken care of. It is outrageous and irresponsible of the
    federal government that Red Lake people needing alternative health care
    are frequently put on a waiting list, and only if their health problem
    is deemed life-threatening will IHS authorize services. One of the
    requirements when and before IHS authorize contract health services,
    Red Lake people, who are guaranteed health care, are frequently forced
    to apply for Medical Assistance in order to receive this service. This
    is an unnecessary burden and embarrassment for Indian people. Our
    Elders have dollars taken out of their small security checks to pay for
    their health care. They feel and we feel that this is wrong. Their
    health care was prepaid, they should not have to pay again. If IHS
    wants Medicare as a form of third party collection for our elderly then
    they should pay the premiums.
        According to the National Indian Health Board, IHS Contract Health
    Service needs are currently $20.6 million. We support the need for an
    increase in Contract Health Service dollars, Red Lake's request alone
    is an additional $5 million for fiscal year 1998. As Medicaid and
    Welfare Reform progress Contract Health Service dollars for Red Lake
    will increase up to $10 to $15 million dollars annually.
        We implore Congress to restore $104 million for mandatory cost
    increases to pay for the mandated pay act increases and the growing
    cost of inflation. These pay act increases should be equally
    distributed between IHS and Tribal Health Services.
        We need Congress to appropriate an additional 75 million for
    contract support costs. As we take over more functions of the federal
    government using Public Law 93-638, the Indian Health Service is
    informing Red Lake that there is no money for contact support. The Red
    Lake Band of Chippewa Indians should not have to bear the cost of
    administrating these services on behalf of the federal government.
        We implore Congress to reauthorize Public Law 102-537, The Indian
    Healthcare Improvement Act and provide the full funding needed to carry
    out the intentions of the Act. This Act is critical to the continued
    success of the tribes and the IHS in providing healthcare. The major
    problem with the act is that not all programs and services identified
    in the Act were funded.
        Congress needs to appropriate dollars for Indian Health Service to
    provide for elders needing short term and long term care in skilled
    nursing or extended care facilities. The authorization is in the Indian
    Healthcare Improvement Act for Indian Health Service to provide skilled
    nursing care, but, they say there was no dollars that were appropriated
    for this purpose. We have operated our own 47 bed Extended Care
    Facility since 1989. Our facility is added on the Red Lake IHS-PHS
    Hospital and was built on the premise that we would be 100 percent
    reimbursed by the federal government. This happened for about the first
    8 months of operation, then Indian Health Service informed the State
    that in their opinion we were not a ``facility of the service''. Since
    that opinion we have not been able to collect the 100 percent
    reimbursement from the federal government.
        The Red Lake Tribal Council, has worked extensively over the years
    to acquire funding for our unique and culturally sensitive programs
    that treat drug, alcohol and other forms of substance abuse. We need
    these services to continue and we do not want to have the dollars that
    we have used to operate these services reprogrammed by the federal
    government and given to the States for the general population. We need
    more dollars and a separate set-aside allocation specifically for
    tribes. Our share of the set aside could come directly to the Red Lake
    tribe as a federal block grant, or it could be administered by the IHS
    and come directly to tribes through our Public Law 93-638 Programs.
        We direct your attention to the fact that our Red Lake Indian and
    Free Drug Program, which was established in 1973, continues to be
    funded as a direct block grant and that this is the only federal funded
    block grant in the United States that goes directly to an Indian tribe.
        The Red Lake Chippewa Nation has given up land, minerals and other
    natural resources as a prepayment for health services. We refuse to be
    identified as part of the minority population or a special organization
    or people of color that receives health care. We are a Nation. We
    cannot support Federal or State Health Care Reforms if they threaten
    our sovereignty and ignores or relieves the federal government of its
    treaty obligations and trust responsibilities and the government-to-
    government relationship between the Red Lake Band of Chippewa Indians
    and the United States
        Government or authorizes State's control over tribes in providing
    health care.
        We need you to support the Tribes and fully fund the Indian Health
    Service budget, protect our prepaid health services and to remind those
    that feel that the IHS is a welfare program that it is not. Indian
    Health Care is based on the trust responsibility of the federal
    government and that Congress has the legal obligation to provide these
    benefits to Indian Nations, regardless of the tribes or individual
    American Indians financial status.
                Respectfully Submitted,
                                            Bobby Whitefeather,
                                                              Chairman.
                                     ______

       Prepared Statement of the Indigenous People's Council for Marine
                                    Mammals

        Mr. Chairman Gorton, Members of Interior and Related Agencies and
    the Senate Subcommittee of the Appropriations Committee. On behalf of
    the Alaska Native Community, the Indigenous People's Council for Marine
    Mammals (IPCoMM) is requesting the Senate Subcommittee of the
    Appropriations Committee to appropriate, for fiscal year 1998, $750,000
    to the Secretary of Interior to implement Section 119 of Public Law
    103-238, 1994 Amendments to the Marine Mammal Protection Act (MMPA). It
    is our understanding the Congressional add-on of $250,000 for fiscal
    year 1997 will be continuing appropriations to the Department of the
    Interior in future years. Section 119 authorizes the Secretary of
    Interior to * * * ``enter into cooperative agreements with Alaska
    Native Organizations to conserve marine mammals and provide management
    of subsistence use by Alaska Natives.'' It also authorizes Congress to
    appropriate $1 Million annually for fiscal years 1994-99 to implement
    Section 119. The only funding provided since 1994 was a $250,000
    congressional add-on to the Department of the Interior's fiscal year
    1997 budget which allowed U.S. Fish and Wildlife Service (USFWS) to
    enter into co-management agreements with Alaska Native Organizations
    for conservation and subsistence use of walrus, polar bears and sea
    otters.
        Despite the lack of funding, significant progress has been made in
    Alaska in terms of implementing Section 119 of the MMPA. The Alaska
    Native Community, represented by IPCoMM, the Alaska Federation of
    Natives (AFN), and the Alaska Inter-Tribal Council (AI-TC) recently
    completed negotiations on an umbrella ``Memorandum of Agreement for
    Negotiation of Marine Mammal Protection Act Section 119 Agreements'' to
    conserve marine mammals and provide co-management of subsistence use
    with the Department of the Interior--Fish and Wildlife Service. Final
    negotiations with the Department of Interior was completed on March 5,
    1997. This umbrella agreement between IPCoMM and USFWS will provide the
    foundation and direction for how individual co-management agreements
    will be negotiated between the federal agencies and Alaska Native
    Organizations for the three (3) species under USFWS jurisdiction. The
    parties are in the process of planning a formal signing ceremony to
    commemorate the historic agreement which will enhance the conservation
    and utilization's of the marine mammal resources for subsistence uses
    consistent with the public policy embodied in Section 119 of MMPA. In
    addition, to the successful negotiations with NMFS and USFWS on the
    umbrella agreement, three Marine Mammal Commissions (Eskimo Walrus
    Commission, the Alaska Nanunq Commission and the Alaska Sea Otter
    Commission) recently signed individual co-management agreements with
    the USFWS for specific co-management agreement activities involving
    three species used for subsistence purposes in Alaska (walrus, polar
    bear and sea otters). These Agreements were made possible due to the
    $250,000 appropriation to the Department of the Interior for fiscal
    year 1997.
        Although significant progress has been made in implementing Section
    119 of the MMPA, it is imperative that Congress fully fund Section 119
    of MMPA if this progress is to continue for the three (3) marine mammal
    species used by Alaska Natives. Congress has recognized that the best
    way to conserve and wisely utilize marine mammal resources used for
    subsistence purposes is to allow the full and equal participation by
    Alaska Natives in decisions affecting the management of marine mammals
    taken for subsistence. That can only happen if Congress provides
    adequate funding for co-management activities.
        Background.--Early in the discussions leading to the 1994
    reauthorization of the Marine Mammal Protection Act, a number of Alaska
    Native Marine Mammal groups banded together and formed the Indigenous
    People's Council for Marine Mammals (IPCoMM) to insure a united Native
    voice during the reauthorization process As a result, the Native
    exemption for taking of marine mammals for subsistence uses was
    retained, and language was added in Section 119 to authorize the
    Secretaries of the Department of Commerce and Interior to enter into
    co-management agreements with Alaska Natives Organizations for the
    conservation and co-management of subsistence uses of marine mammals
        In the spring of 1994, Congress enacted Public Law 103-238, the
    1994 amendments to the Marine Mammal Protection Act. In doing so,
    Congress expressed its intent that the Secretary of Commerce and the
    Secretary of the Interior extend full cooperation as partners to Alaska
    Native Organizations in the development and implementation of marine
    mammal management plans. In order to insure proper implementation of
    Section 119, the Alaska Native Community requested that NMFS and USFWS
    work with IPCoMM in the development of an ``Umbrella'' Agreement with
    specific language that the federal agencies would consider when
    developing individual co-management agreements with Alaska Native
    Tribes and organizations pursuant to Section 119. The purpose of the
    umbrella agreement is to provide the direction and foundation for
    individual co-management Agreements. It will serve as a guide to the
    Fish and Wildlife Service (USFWS), National Marine Fisheries Service
    (NMFS) and Biological Resources Division, Geological Survey (USGS) when
    these federal agencies enter into individual agreements with Alaska
    Native Organizations or Alaska Native Tribes for the co-management of
    subsistence use of marine mammals.
        At this time IPCoMM is concerned about all marine mammals which are
    utilized by Alaska Natives, however harvest limitations are allowed and
    discussions have taken place concerning three listed species for which
    we have grave concern; bowhead whale (endangered), North Pacific Fur
    Seal (threatened), Steller Sea Lion (threatened).
        The Alaska Native Community stands ready to work with USFWS and
    NMFS in implementing Section 119 of Public Law 103-238 to its fullest
    extent. It has already made significant progress toward that end. While
    Section 119 provides an effective way for Alaska Natives to participate
    in decisions affecting the management of marine mammals taken for
    subsistence, full realization of that goal will not be possible unless
    Congress provides adequate funding for co-management agreements. For
    that reason, we urge this Committee to appropriate $750,000 to the
    Department of Interior to enable it to enter into individual co-
    management agreements pursuant to Section 119 of the MMPA. We trust
    that our request will be given due consideration during the
    deliberations of the Committee.
                                     ______

      Prepared Statement of John Blackhawk, Chairman, Winnebago Tribe of
                                    Nebraska

        This testimony addresses the fiscal year 1998 budget and
    appropriations for the Bureau of Indian Affairs and the Indian Health
    Service. The Tribe is concerned about funding for the Tribal Priority
    Allocation program and the Tribally Controlled Community Colleges
    program within the BIA and about funding needs at the IHS.
        The Tribe and Economic Development.--The Winnebago Tribe of
    Nebraska is a federally recognized Indian Tribe organized pursuant to
    Section 16 of the Indian Reorganization Act of June 18, 1934. Our
    forefathers were forcibly relocated from lands in and near what is now
    the state of Wisconsin. Our Treaty of 1865 is the first in history to
    require that the United States provide health care services to tribal
    members. The Tribe's 120,000-acre reservation includes lands in both
    Iowa and Nebraska and only about 30,000 acres of land within the
    reservation is now tribally controlled. There are 3,780 enrolled
    members, of whom about 1,150 reside on the reservation.
        The Winnebago Tribe of Nebraska is very active on the economic
    front. The Tribe operates several business enterprises, including the
    WinnaVegas Casino in Sloan, Iowa, and the Heritage food store and the
    Company A Convenience Mart, both in Winnebago, Nebraska. Additionally,
    the Tribe has developed a small strip mall located on the reservation;
    added tribal revenue is generated by leasing tribal land to outside
    agricultural interests. Ho-Chunk, Inc., a wholly-owned tribal
    development corporation, owns a Rodeway Inn in Sloan, Iowa,
    approximately 3 miles from the Tribe's casino. Ho-Chunk has also opened
    hotels in Omaha and Lincoln. Even with the economic contribution of
    these projects, tribal per capita income remains significantly below
    the poverty level at just over $5,000.
        Unlike states, the tribes have little or no tax base or other
    revenue sources with which to operate tribal government programs.
    Gaming has given a jump start to our economy but those revenues are
    decreasing because of commercial competition. The Tribe still relies
    heavily on federal funds to provide even the most basic level of
    services to tribal members.
                            bureau of indian affairs
        Tribal Priority Allocation (TPA) Program.--Under the BIA's TPA
    program, the Tribe contracts to operate aid to tribal government,
    judicial services, employee assistance, higher education, credit, law
    enforcement communications, real estate services related to land
    management, and wildlife and parks. The total 1997 TPA master contract
    was $817,500, a decrease of $42,000 from the contract amount for 1996
    which was $866,000; the Tribe supplemented this amount with $380,259
    from tribal gaming revenues. In the 1998 budget, the Administration
    requests $889,000 for the Winnebago Tribe TPA, an increase of just
    $23,000 from 1996, and $71,500 from the current year level.
        Aid to tribal government funds three positions, an
    intergovernmental liaison person and 2 receptionists to assist the
    Tribe's administrative functions. We have significantly cut back on
    this function to make more money available for direct services which
    are sorely needed. For example, the judicial services program averages
    500 cases a year; since October, 1996, our court has received 402 new
    civil, criminal, juvenile, family and traffic cases. The Tribe needs
    funds for court automation. Because we have only one probation officer
    for all adults and juveniles, we are unable to monitor compliance with
    court orders. We are also having difficulty in enforcing child support
    orders simply because we do not have the necessary staff. The Tribe
    needs at least another $55,000 for judicial services. The Tribe's
    Supreme Court which hears all appeals is funded entirely by the Tribe.
        The Tribe uses the real estate services function to help locate
    homesites for tribal members, many of whom own fractional interests in
    larger pieces of land. The program is also responsible for ensuring
    that trust and fee land is managed in accordance with environmentally
    sound practices to guarantee a solid future for generations to come.
    The funds are sufficient to hire a program director and administrative
    assistant to assist the land consolidation process. The Tribe pays for
    a lease monitor for the Tribe's agricultural lands from tribal funds.
    The TPA-contracted social service program is also underfunded and pays
    for only one director and one caseworker to service all of the Tribe's
    welfare caseload. Children with behavioral and/or emotional problems
    are sent to a detention center off the reservation because we do not
    have services on the reservation for them. The center is about an hour
    away and, while the facility does allow the Tribe to provide services
    for tribal children, there are rarely sufficient funds to provide the
    kinds of services the children need. There is a significant need to
    enhance prevention programs aimed at this group. Most state and federal
    programs focus on treating symptoms, leaving the tribe responsible for
    funding and implementing prevention.
        The Tribe is reorganizing the social service program to try to
    realize more benefit from the dollars expended. For example, people are
    often referred to different places for needed services. We are
    implementing a more holistic approach to stretch dollars by making sure
    that as a condition for income support, the individual enrolls in
    treatment, if needed, or job training, if needed, or both. In other
    words, we hope to consolidate all referrals so that money, time and
    energy will be saved. This is difficult to do as federal and state
    funds are extremely compartmentalized and laden with bureaucratic red
    tape.
        The wildlife and parks program funds three conservation officers
    and one part-time biologist. Without them, there would be no law
    enforcement for hunting on the reservation. The Tribe has an agreement
    with the State of Nebraska whereby the Tribe monitors and manages the
    reservation wildlife. We must maintain at least the current level of
    funding for this vital governmental program.
        The Tribe is very supportive of the increases shown in the
    President's budget request for the TPA account and strongly urges the
    Subcommittee to recommend these increases or even higher levels if
    possible. While these increases won't meet the full need, they will
    prevent us from slipping further behind. We cannot function at the most
    basic level of services if more cuts are made: in 1996 we lost 16
    percent from 1995 levels, and in 1997, we lost over 5 percent from the
    1996 level of $866,000. While the Tribe has been able to supplement TPA
    federal funding with gaming revenues, the opening of non-Indian
    competitive gaming has caused these revenues to decrease significantly.
    Given the dual hit caused by depletion of gaming revenues and
    reductions in federal funds, coupled with an increasing reservation
    population--more children and people living longer--we are in for some
    very hard times.
        Other BIA Contracts.--For the Subcommittee's information, the Tribe
    has separate contracts for other programs, including Indian Child
    Welfare, Johnson-O'Malley, Social Services, and Water Resources. We
    supplement all but the ICWA program with $124,000 from gaming revenues.
    We also have a contract to maintain Bureau of Indian Affairs offices
    and employee quarters and receive road maintenance funds which the
    Tribe matches ($40,234).
        Tribally Controlled Community Colleges.--The President's budget
    requests an increase of $3,000,000 for this vitally needed program. The
    Winnebago Tribe formerly participated as a member of a Nebraska
    Intertribal Consortium in establishing the Nebraska Indian College.
    Last year, for various good reasons, the Tribe elected to go its own
    way and is now operating Little Priest Tribal College. We are very
    pleased with the first year of operations and hope to become a
    candidate for accreditation in the very near future. This means that
    while we lost our eligibility for funding in the current year, in
    fiscal year 1998, the new College will probably be participating in the
    formula distribution of funds to tribal colleges based on Indian
    student count.
        As the members of the Subcommittee are aware, the current
    distribution to colleges on the basis of per student count is less than
    $3,000. The authorized amount if $5,820 per student. No other
    government funds its college on so low a per student basis. The average
    for public colleges is about $4,500.
                             indian health service
        The Tribe's community health programs, including CHRs, Public
    Health Nursing (PHN), National Child Health (NCH), Health Education,
    and the Diabetes and Podiatry programs, have positively impacted tribal
    preventive health efforts. For example, amputations have decreased,
    immunizations have increased, and infant mortality and morbidity rates
    are declining. The Tribe has proven its ability to plan, develop, and
    implement outreach programs but we desperately need trained staff to
    provide services.
        The dental program has been extremely successful in educating and
    providing early treatment which is vital in a community plagued with
    diabetes. One dentist averages between 200-225 appointments per month.
        The PHN program averages about 2,000 patient contacts per year and
    coordinates an additional 1,500 contacts for patient care. This level
    of service is provided by 2 RNs and 2 assistants. The Public Health
    Nurses provide Maternal Child Health outreach for over 200 clients each
    year--reaching 80 percent in the first trimester. This work has
    resulted in a significant reduction in fetal deaths and an increase in
    live births without serious complications. The Tribe's immunization
    clinics and outreach has exceeded our goal of reaching 60 percent of
    the eligible population by 8 percent (reaching 68 percent).
        Mammography and cervical cancer screening programs were initiated
    in 1994, and tribal staff have worked hard to provide cost-free
    services to all eligible clients. This has significantly reduced the
    more costly treatment of advanced cancers and increased life expectancy
    for tribal members.
        Health care for American Indian and Alaska Native (AI/AN) people
    must be guaranteed through an amendment to Title XIII (Medicare) of the
    Social Security Act. Treaties initiated by the federal government
    obligated this nation to provide health care, education, and protection
    services in exchange for the very lands upon which this nation now
    resides. The existing appropriation for AI/AN programs has never been
    adequate to meet the health care needs of our people. Historically,
    only 75 percent of IHS level of need has ever been funded. This has now
    eroded to 40 percent and is still dropping which is directly
    attributable to Tribal ``compacting'' under Public Law 100-713 (and its
    subsequent amendments) and NO program increases. There is a very real
    risk that decreased access to needed health care is imminent as well as
    a set-back for the advancements thus far made by IHS.
        The legislation also mandated that there be ``no adverse impact''
    for ``non-compacting'' Tribes, it also mandated a report be submitted
    on this critical issue. To date we have not seen that report! Even
    though not a single Tribe in the Aberdeen Area, who all have Treaties,
    has elected to compact, we have suffered cutbacks directly related to
    this legislative process. The Aberdeen Area is notorious for its high
    infant mortality rate: 18.5 percent per 1,000 live births versus the
    national level of 14.5 percent (it's a victory when a newborn lives
    beyond the age of three!), high morbidity rate, and high incidence of
    diabetes. These conditions will only worsen under the policies and
    practices of the current director of IHS. We understand that he
    succumbed to pressure by the ``compacting'' Tribes and authorized that
    they be funded at 100 percent of their level of need at a great
    sacrifice to the ``non-compacting'' Tribes as well as to IHS! We demand
    that this issue be investigated and that the IHS Director be held
    accountable for his abuse and neglect of duty and power, and that the
    mandated report on ``adverse impact'' to ``non-compacting'' Tribes be
    immediately undertaken.
        Our Service Unit's budget supports only 71 positions out of an
    authorized 163. They are mandated to collect third party resources to
    augment operational costs. In fiscal year 1996 our local service unit
    collected $135,000 out of their mandated amount of $185,000. The
    national projection for third party resources was set at an unrealistic
    amount of $4 million. Although additional resources are used to augment
    critical operational shortfalls, this optimistic but deceptive
    methodology must be realistic and based on historical collections and
    data.
        IHS's goal is to raise the health status of AI/AN people to the
    highest possible level. We quote from a recently published paper
    written by Everett Rhoades, MD, former director of IHS: ``[A]t first
    glance (the goal) appears to be abstract and platitudinous. It has
    consistently proven otherwise. On the contrary, it includes the
    extremely important concept of community-oriented preventive, as well
    as curative, care. It is a concept that the country should immediately
    adopt as it struggles with new approaches to health care for the
    nation.'' Notwithstanding IHS's flaws, AI/ANs have long known this
    approach to be efficacious and cost effective. The Tribe strongly
    suggests that the Congress use it as a prototype for the rest of the
    nation in your health care reform strategy, and that you call upon our
    cooperation and experience in developing your strategy.
        We're curious about the GAO's 1995 study on ``Issues Related to the
    Need for the Public Health Service's Commissioned Corps.'' We
    understand that substantial savings, estimated at roughly $1 billion,
    could potentially be realized by converting this quasi military group
    to civilian employees. The PHS Corps has the same benefits as the armed
    military without the risk. Even though they wear an officer's uniform,
    they are performing civilian jobs and will never see combat. They don't
    pay taxes on subsistence and housing allowances and are entitled to
    other types of tax exclusions; they don't keep track of hours on the
    job; and they don't pay for health care. Even without being privy to
    the GAO study, we recommend that the PHS Corps be converted to the work
    force of tax paying civilian employees, and that the savings be
    redirected to local IHS hospitals and clinics serving AI/AN country,
    Tribal ``638'' contractors, and especially to the Community Health
    Representative (CHR) program. Resources that now support one PHS Corps
    officer could support 3 to 5 CHRs who work at the grassroots level
    promoting health and preventing disease as well as support for their
    program operations. Thank you.
                                     ______

      Prepared Statement of David M. Gipp, President, and Russell ``Bud''
             Mason, Board Chairman, United Tribes Technical College

                               summary of request
        United Tribes Technical College (UTTC) \1\ and its board of
    directors submits this testimony regarding the fiscal year 1998 BIA
    appropriations for our institution. We want you to know of the success
    of UTTC in moving Indian families into self-sufficiency and why we
    deserve the continued support of this Subcommittee.
        United Tribes Technical College, which is chartered by the five
    tribes in North Dakota, is a ``full service'' postsecondary vocational
    education institution--we provide vocational education services for
    adults, run a nursery, pre-school and elementary school for the
    children of our adult students, and operate a dormitory system and a
    health clinic. We believe that this community setting has a great deal
    to do with the success of our students--students who, by and large,
    come from impoverished homes and communities.
        The UTTC fiscal year 1998 request is for a $728,000 increase over
    the fiscal year 1997 enacted level, consisting of the following: (1)
    $86,000 for personnel costs; (2) $250,000 to improve facilities for
    computer technology, (3) $200,000 to improve course offerings and
    student services, and (4) $192,000 for emergency maintenance and
    facilities. A $728,000 increase would bring the UTTC funding in the BIA
    budget to $2,538,000.
                           funding history/shortfalls
        BIA funding for UTTC has not even come close to meeting basic cost-
    of-living increases. From fiscal year 1990 through fiscal year 1997,
    BIA funding for UTTC has increased only 1.06 percent (from $1,708,000
    in fiscal year 1990 to $1,810,000 in fiscal year 1997). The operating
    and purchasing strength of our budget has diminished by some 20 percent
    since 1991. As described the section of this testimony regarding our
    need for personnel funding, our faculty and staff receive salaries that
    are lower than even the lowest paid faculty in any state college
    system.
        While our funding has remained flat since fiscal year 1990, our
    expenses have increased. The College has experienced a large increase
    in the cost of utilities, with electricity expenses rising about 20
    percent per unit and the per unit gas cost increasing approximately 113
    percent. Over the years the College has been able to partially offset
    utility rate increases by implementing stringent conservation measures
    such as improved weatherization and reductions in building
    temperatures. However, energy consumption cannot be further reduced
    because of the College's location and the harsh winters in the northern
    plains.
        Lack of available resources has also meant a limitation on the
    repair and maintenance of physical facilities. The College occupies the
    old Fort Lincoln Army Post. Other than the more recently constructed
    skills center and part of the community center, UTTC's core facilities
    are 80 to 90 years old. Estimates for new facilities total over $12
    million, according to a 1993 U.S. Department of Education report to
    Congress. Continuing a course of nonrepair will ultimately prove more
    costly as the repairs will be greater. This is especially true of the
    water and sewage systems on campus. Fire and safety reports document
    these needs. Neither UTTC nor other tribal colleges are included in the
    BIA Facilities budget through the Office of Construction and
    Management.
        Finally, the fixed and related costs approved under our annual
    Indirect Cost proposal to the U.S. Inspector General have decreased in
    recovery by over $100,000 annually (fiscal year 1996), with another
    possible loss of $110,000 for fiscal year 1997. We are in dire need of
    adequate recovery for this year, as well as prior years.
                the record of uttc and the need for our services
        At United Tribes Technical College most of all our students receive
    some form of public assistance. Yet we have a job placement rate of 80
    percent--a record sustained over the past 10 years. This is well above
    the job placement rates required in the Personal Responsibility and
    Work Opportunity Reconciliation Act of 1996 (Public Law 104-193). Our
    calculations show that a UTTC graduate pays back in taxes over a 6.4
    year period the costs of receiving an education at our institution.
        The enactment last August of welfare reform legislation makes the
    work of UTTC even more critical. We want to be a full partner in moving
    Indian families into jobs with living wages, but as it stands now we
    have to turn away students due to lack of institutional resources. We
    do no recruiting at UTTC, but yet we have a current waiting list of
    about 200 students who want to attend our institution. Some potential
    students do not apply, knowing of the waiting list.
        Our 300+ students come from all over Indian country--some years we
    have students representing 45 tribes. A large proportion of our
    students are from the 14 tribes in North Dakota and South Dakota.
    Indian people in the Dakotas, as you know, have enormously high jobless
    rates. BIA Labor Force data reports unemployment rates among Indian
    people on and near reservations at 50 percent and 59 percent in North
    Dakota and South Dakota, respectively. Of Indian people on and near
    reservations in South Dakota who are employed, only 17 percent earn
    over $7,000. The comparable figure in North Dakota is 19 percent.
        As far as we are concerned, we would be justified in asking for a
    very large budget increase--based our success rate, based on need, and
    based on the financial return which comes from an educated and employed
    population.
                  additional information on our budget request
        While we would like to ask for funding to meet our construction
    needs, we are realistic enough to know that such funding is simply not
    in the cards for fiscal year 1998. We are limiting our request for a
    $728,000 increase over the fiscal year 1997 level for a total of $2.5
    million. The funding would be utilized for the following purposes, all
    of which have been identified through accreditation ageney visits and
    observations:
        $86,000 for costs of staff and faculty ($44,000 over the BIA
    request). The request we make would provide a 4 percent salary and
    fringe benefit increase. Our staff and faculty work for considerably
    lower compensation compared to other similar institutions. We are at a
    critical juncture, and face an eminent risk of losing qualified,
    capable staff and faculty due to low salaries. The dedication of our
    staff cannot sustain them indefinitely.
        North Dakota salaries for higher education faculty rank 50th--the
    lowest in the nation--but the average faculty salaries at UTTC are
    lower even than those in the North Dakota state system.\2\ The average
    faculty salary at UTTC is $24,476, while the average faculty salary at
    the community colleges in North Dakota range from $29,900 to $32,800.
    This translates to our faculty receiving an average salary which ranges
    from $5,500 to $8,400 less than their peers at neighboring community
    colleges. Salaries for non-faculty staff would show a disparity at
    least as wide as that for faculty. Unlike most federal and private
    institutions which are able to provide salary increases to employees
    based on the length of service (unrelated to cost of living increases),
    UTTC does not have the financial ability to provide a guaranteed system
    of incremental salary increases based on length of employment.
        $250,000 to improve facilities for computer technology, life
    science laboratories, and building trades.
        $200,000 to improve course offerings and student services. This
    funding would allow hiring/training of faculty so that existing
    programs can be improved to meet new market demands. For example, we
    want to expand the allied health professions program and also to expand
    the business clerical program into the business administration area.
        In the area of student services, we want to expand our diagnostic
    capabilities in tribal-specific areas and also in the areas of literacy
    and math-science deficiencies. This will allow us to provide better
    remidiation services to students. Finally, we want to make improvements
    in our student follow up, career development, and job market research
    efforts. While $200,000 is inadequate to meet all these needs it would
    allow us to make progress in some of these areas.
        $192,000 for emergency maintenance on both single and family
    student housing, instructional facilities, and support facilities. This
    amount will obviously not cover major renovations or new facilities.
                                 uttc services
        United Tribes Technical College offers ten (10) Certificate and ten
    (10) Associate of Applied Science degree programs.\3\ Entrepreneurship
    and new technology skills are being integrated into appropriate
    curricula. All programs are accredited through the North Central
    Association of Colleges and Schools at the certificate and two-year
    degree granting levels.
        We also provide institutional services that are fundamental to the
    delivery of quality vocational education, including those related to
    its residential nature. These services include:
        Adult education for students needing advanced basic education
    skills or who desire to pursue vocational programs requiring GEDs or
    high school diplomas;
        Academic instruction which allows our graduates who wish to pursue
    additional college education a sufficient background;
        Instructional supplies and equipment for all vocations;
        Services including student housing, cafeteria, local student
    transportation, library, financial aid office, counseling and
    placement, facilities maintenance, and overall administrative and fixed
    costs for UTTC's 105 acre campus base;
        Early childhood (nursery and pre-school) services for approximately
    100 children, ages 8 weeks to five years. Nearly half of these children
    are under age two, and so the staff to child ratio of necessity is very
    high in order to provide proper supervision and to meet the North
    Dakota licensing requirements;
        The Theodore Jamerson Elementary School (K-8th grades) serving over
    100 Indian students;
        Modest offering of cultural, athletic, and recreational activities
    to supplement student learning experiences and campus-based family
    services.
        UTTC's enrollment now averages 300 students annually. Combined with
    family members and our pre-school and elementary students, the UTTC
    campus population exceeds 500. Our students represent as many as 45
    different Indian Nations and 15 states. The majority of the students
    have never spent more than one continuous year away from their home
    reservations. They have also experienced chronic unemployment due to
    the extremely depressed local economy and to education limitations
    which are well below the national average.
        Thus, UTTC is committed to not only its post-secondary mission, but
    to the economic, social, and cultural advancement of American Indian
    and Alaska Native people. The mission of UTTC is to provide an
    environment where students and staff can preserve and transmit
    knowledge, values, and wisdom to ensure the survival of native people
    and Indian Nations along with the vocational training and job placement
    of native students. There is no other post-secondary vocational
    education institution in the country that in a residential setting is
    Tribally-controlled, culturally-based, family-oriented, and focused on
    both Tribal economic needs and mainstream employment training.
        Thank you for your consideration of our request. We need your
    assistance to ensure that the unique educational opportunities offered
    by United Tribes Technical College will be available for what we hope
    will be an increasing number of Indian and Alaska Native students and
    their families next year and in the future.
                                    endnotes
        1. Established in 1969, United Tribes Technical College is a
    unique, inter-Tribal vocational technical education institution located
    on a 105 acre campus in Bismarck, North Dakota. The Tribal college is
    owned and operated by five federally-recognized Tribes situated wholly
    or in part in North Dakota. These Tribes are the Devils Lake Sioux
    Tribe, the Sisseton-Wahpeton Sioux Tribe, the Standing Rock Sioux
    Tribe, the Three Affiliated Tribes of the Fort Berthold Reservation,
    and the Turtle Mountain Band of Chippewa. Control of the institution is
    vested in a ten-member board of directors comprised of elected Tribal
    chairpersons and Tribal council members.
        2. Source: Integrated Postsecondary Education Data Systems (IPEDS)
    Report of the U.S. Bureau of the Census and the Department of Education
    Office of Education Statistics.
        3. The following Certificate Programs are offered: Administrative
    Office Support, Automotive Service Technician, Building Trades
    Technology with options in Carpentry, Electrical, Plumbing, and
    Welding; Early Childhood Education; Criminal Justice; Hospitality
    Management: Food & Beverage Specialization; Medical Secretary.
        The following Associate of Applied Science (A.A.S.) degrees are
    offered: Arts/Marketing; Automotive Service Technology; Building Trades
    Technology with options in Carpentry, Electrical, Plumbing, and
    Welding; Criminal Justice; Early Childhood Education; Health
    Information Technology; Hospitality Management: Food & Beverage
    Specialization; Office Technology with emphasis in Computer
    Applications or Accounting; Practical Nursing; Small Business
    Management.
                                     ______

      Prepared Statement of the National Indian Child Welfare Association

        The National Indian Child Welfare Association \1\ submits this
    statement on those portions of the fiscal year 1998 Bureau of Indian
    Affairs budget concerning the Indian Child Welfare Act programs--the
    Indian Child Welfare Act (ICWA), Title II grant program under the
    Tribal Priority Allocations (TPA) budget category and the ICWA, Off-
    Reservation program which was funded through fiscal year 1996, but is
    not identified in the Administration's request for fiscal year 1998.
    ---------------------------------------------------------------------------
        \1\ The National Indian Child Welfare Association is based in
    Portland, Oregon and provides a broad range of services to its
    constituents. These services include, (1) professional training for
    tribal and urban Indian child welfare professionals; (2) consultation
    on social service program development; (3) facilitating by request
    child abuse prevention efforts in reservation communities; and (4)
    analysis and dissemination of policy information that impacts Indian
    children and families. Our constituents consist of tribal governments
    and urban Indian child welfare programs throughout the United States.
    Our organization works closely with the Affiliated Tribes of Northwest
    Indians and National Congress of American Indians, as well as having
    members on the Indian Child Welfare Committees of both organizations.
    This will be our fifth year in providing written testimony to this
    Subcommittee.
    ---------------------------------------------------------------------------
        Our organization is requesting that the Subcommittee:
        (1) Recommend an increase to TPA similar to the Administration's
    fiscal year 1998 request so that additional funding would potentially
    available to assist tribal ICWA programs;
        (2) Recommend an increase of $2 million in the Special Programs and
    Pooled Overhead category for the express purpose of restoring historic
    funding for the Off-reservation ICWA grant program; and
        (3) Require the BIA to utilize additional data in developing its
    budget request regarding ICWA services and to provide this data to
    Congress. We have listed on page two of our statement the types of data
    we believe should be utilized in this process.
              the bia does not measure tribal child welfare needs
        Under TPA tribes are essentially provided a block grant from which
    they must fund a broad variety of services. Under this system tribes
    must make decisions about which services they can fund and at what
    level. However, many times tribes encounter situations when they must
    transfer funding from one financially strapped service to another, even
    though both services are overwhelmed by the human need they face. The
    BIA looks at this transfer as a measure of decreased need, which they
    use when developing its budget request. This measure does not take into
    consideration any information on human need. Under this method,
    Congress and the Administration will never know what the actual need
    for any program under TPA is and how well funds being allocated are
    doing in trying to meet that need.
        Data provided to Congress should accurately describe human need not
    just budget priorities. Amazingly, the BIA has been allowed to provide
    only superficial data to justify budget requests and evaluate their
    performance in the area of human services. To our understanding, no
    other federal agency that administers human services funding is allowed
    to provide such incomplete information to Congress. The BIA should be
    held to no less of a standard.
        Another important factor in determining the need for ICWA program
    funding is tribal access to other program services and funding. Of the
    top four federal sources of child welfare funding guaranteed to states
    under the Social Security Act, tribes only have guaranteed access to
    one, Title IV-B Child Welfare Services, and the amounts of funding
    available from this source for tribes are extremely limited
    (approximately $5.0 million projected for fiscal year 1998). This
    situation combined with dwindling state resources, lack of expertise,
    and states reluctance to provide community-based services in Indian
    communities based on financial and jurisdictional issues, has created a
    serious crisis for tribes in their efforts to protect their children
    and establish permanency and stability for those children who need
    help. Funding from the ICWA, Title II grant program is the only viable,
    ongoing source of child welfare funding for all tribes. Without strong
    ICWA programs tribes have few options available to them to protect
    their children from child abuse and help them secure a safe, permanent
    home.
                          tribal icwa, title ii grants
        Until fiscal year 1995 with the revised Final Rule for the Indian
    Child Welfare Act, Title II grant program taking effect, Tribes have
    been forced compete for child welfare funding from year to year. This
    competitive process has been extremely disruptive and in most years
    only allowed approximately 50 percent of the tribes nationwide to
    receive any ICWA funding. Improvements in the grants process and
    increases to funding have enhanced tribal access to this resource, but
    there is still a need to continue the effort to make ICWA funds more
    available and reflective of tribal needs. These efforts must include:
        A more careful analysis of the child welfare needs for tribes by
    the BIA for the purposes of budgetary recommendations. This analysis
    should be based on more than just population figures and how tribes are
    able to prioritize their limited Tribal Priority Allocation funds. Data
    should be provided on: types of services provided; number of children
    and families to whom services were provided; number of out-of-home
    placements of children; average length of time children are in out-of-
    home care; numbers of children who are able to receive permanence
    through reunification, guardianship kinship care, or adoption.
        Funding increases for the tribal portion of ICWA, Title II that
    reflect need as identified through careful analysis of several factors,
    such as access to other child welfare funding, relative costs of
    providing basic child welfare services on tribal lands, and needs data
    identified in the paragraph above. This is data that is routinely used
    with other federal child welfare programs and provides Congress with
    meaningful data that can define need.
        Current estimates provide a picture of need that is clearly as high
    as that of any ethnic group for these services. The most recent
    research on risk assessment of child abuse for Indian children
    indicates that 34.4 percent of Indian children are at risk for being
    abused (1993 National Indian Justice Center study on Indian child
    maltreatment funded by the Indian Health Service). In 1986, the most
    current year for which data is available, it was reported that Indian
    children were placed in substitute care at a rate that is 3.6 times
    that of non-Indian children (1988 study entitled, ``Indian Child
    Welfare: A Status Report.'' Funded by the Departments of Health and
    Human Services and Interior). Many other documented indicators of the
    need for these services are also highly visible in many Indian
    communities such as extreme poverty and high rates of substance abuse.
                     off-reservation icwa, title ii grants
        Off-reservation programs can provide a number of important services
    to tribes, states, and individual Indian children and families. The
    ICWA does not make a distinction between who should benefit from the
    Act, and is designed to protect Indian children and families
    everywhere. These off-reservation programs, where they have been able
    to exist, can provide key linkages to tribes when their members become
    involved in state child welfare systems, all of which are designed to
    meet the purpose of the Indian Child Welfare Act. Common services that
    these programs can provide include:
        Monitoring compliance with the Indian Child Welfare Act in urban
    areas;
        At the request of tribes, provide case advocacy or other services
    such as foster care to tribal children who do not live on the
    reservation and whose tribe may not even be in the state;
        Provide training to state administrators, child welfare workers,
    and court personnel on how to improve compliance with the Indian Child
    Welfare Act and provide more cost-effective services;
        Recruiting and licensing Indian foster and adoptive families, an
    activity that states often do not have resources for and at which they
    are not successful.
        Off-reservation programs have suffered from the instability of
    inadequate funds and a competitive grants process. Historically,
    funding levels for off-reservation ICWA programs have been between $1.5
    to $2.0 million. This has enabled the BIA to minimally fund about 40
    programs a year that serve the 65 percent of the Indian population that
    lives in primarily urban settings. These programs have also tried to
    access private foundation funding and state contracts to supplement
    their ICWA grants. However, these funds have been increasingly
    difficult to secure, especially in light of increased competition for
    these resources due to reductions in state and federal funding.
        We also know that many of these children may be served by state
    child welfare agencies at some point. Because of the small number of
    off-reservation ICWA programs operating in the United States, many of
    these children in urban areas are at great risk for not being given the
    protections of the Indian Child Welfare Act. This seems especially
    relevant when you consider the budgetary problems that states are
    experiencing that result in minimal resources for staff training and
    services in general.
                                   conclusion
        The ICWA, Title II program is a resource that has shown to be
    extremely effective in protecting Indian children and helping Indian
    families stay together. A study in 1988 commissioned by the Department
    of Health and Human Services and Department of Interior entitled,
    ``Indian Child Welfare: A Status Report'', revealed that tribal ICWA
    programs outperformed the BIA and state child welfare programs,
    notwithstanding the limited funding available to tribes. Specifically,
    Indian children in substitute care had shorter stays in foster care and
    higher rates of permanency when served by tribal programs. In 1994 the
    Office of Inspector General issued a report entitled, ``Opportunities
    for ACE to Improve Child Welfare Services and Protections for Native
    American Children'', which clearly showed that most states were either
    not willing or able to share federal funds for child welfare services
    with tribes. This clearly demonstrates that tribes, when provided the
    opportunity, are able providers of child welfare services, while
    currently not being able to depend on other funding sources or services
    outside of the ICWA, Title II grant program.
        We must also take into consideration other factors which impact the
    ability of tribes and off-reservation programs to protect their
    children and give them a sense of permanence. The new welfare reform
    law provides tribes with an opportunity to operate their own welfare
    programs, but does not provide the additional resources that will be
    needed to achieve full self-sufficiency for Indian families. States
    will have additional pressures under the new law to target their
    resources carefully. This will most likely mean that states historic
    reluctance to provide services on tribal lands will continue and
    possibly get worse. In addition, Congress and the Administration have
    set out to increase adoptions and permanence for children in this
    country. If tribes are not given the resources to help achieve this
    goal, then Indian children will likely continue to be the most
    unprotected class of children in this country with the least access to
    services that help provide permanency.
        Please consider our request carefully and help tribal governments
    and off-reservation ICWA programs continue to offer proven, locally
    designed and controlled programs for Indian children and families.
                                     ______

     Prepared Statement of Harry Wilde, Co-Chair, Lower Yukon; and Gilbert
    Huntington, Co-Chair, Upper Yukon of the Yukon River Drainage Fisheries
                                  Association
                                resolution 97-8

    In support of Federal appropriations to implement the Interim Agreement
          on Yukon River Salmon and the Yukon River Salmon Act of 1995

        Whereas the Yukon River Drainage Fisheries Association (YRDFA)
    represents commercial, subsistence and sport users of salmon and other
    fish within the Alaska portion of the Yukon drainage;
        Whereas the Interim Agreement on Yukon River Salmon, affirmed by
    Congress in the Yukon River Salmon Act of 1995, necessitates effective
    management and research programs for both U.S. and Canadian spawning
    stocks;
        Whereas the Interim Agreement also established a Yukon River Panel
    and said Panel requires significant administrative and operational
    support to assure effective user and agency participation in the
    implementing the Agreement as well as continued negotiations towards a
    long-term treaty;
        Be it Resolved That the YRDFA hereby requests the U.S. Congress to
    fully fund the following items necessary to implement the U.S./Canada
    Interim Agreement on Yukon River Salmon and the Yukon River Salmon Act
    of 1995; $1,062,100 for Yukon River research and management by the
    Alaska Department of Fish & Game, funded via the U.S. Department of
    Commerce; $400,000 deposit to the Yukon River Restoration & Enhancement
    Fund; $200,000 for Panel operations and administration; $210,000 for
    additional USF&WS programs in the Yukon drainage; $713,000 for NMFS to
    conduct salmon radio telemetery studies; $100,000 to USGS/BAD for chum
    salmon ecology studies; $1,000,000 to the Bering Sea Fishermen's
    Association, from the Bureau of Indian Affairs Western Alaska Salmon
    Investigations.
        Copies of this resolution to be sent to the Alaska Congressional
    delegation and to the members of the U.S. House and Senate
    Appropriations Committee.
        Approved unanimously this 13th day of February 1997 by the Board
    members and Delegates of YRDFA assembled at their Seventh Annual
    Meeting held in Mountain Village, Alaska.
                Certified:
                                       Harry Wilde,
                                               Co-Chair, Lower Yukon.
                                       Gilbert Huntington,
                                               Co-Chair, Upper Yukon.
                Attest:
                                       Dan Senecal-Albrecht,
                                               Executive Director.
                                     ______

      Prepared Statement of Gordon James, Chairman, Skokomish Indian Tribe

                                    Abstract

        constructive resolution of skokomish river fisheries and water
                              conflicts [$400,000]
        The Tribe requests that Congress direct the Bureau of Indian
    Affairs to provide the Tribe $400,000 in fiscal year 1998 for technical
    and legal assistance required to achieve constructive resolution of
    fisheries and water conflicts associated with the Cushman hydroelectric
    project on the Skokomish River in western Washington.
        Congressional funding during the last four fiscal years for
    essential technical and legal assistance has allowed the Tribe to make
    substantial progress in developing and building consensus for a
    pragmatic and equitable settlement of Cushman Project related issues.
    Absent a negotiated settlement, a cascade of costly and divisive
    litigation and political conflict is imminent.
        It is apparent that further conflict can be avoided and all
    parties' reasonable interests can be accommodated through a creative,
    pragmatic negotiated settlement of all Cushman Project related issues.
    However the window of opportunity for a settlement is rapidly
    narrowing. This is it--there will not be another opportunity to
    constructively resolve Cushman Project issues.
        The Tribe asks that Congress support continued funding for
    necessary technical and legal assistance in this pivotal year. This
    will allow the Tribe to capitalize on progress to date--and on
    Congressman Norm Dicks' settlement initiative--to secure the enormous
    public benefits of a negotiated settlement.
        constructive resolution of skokomish river fisheries and water
                              conflicts [$400,000]
        The Tribe requests that Congress direct the Bureau of Indian
    Affairs to provide the Tribe $400,000 in fiscal year 1998 for technical
    and legal assistance required to achieve constructive resolution of
    fisheries and water conflicts associated with the Cushman hydroelectric
    project on the Skokomish River in western Washington.
        The Skokomish Tribe is committed to achieve a constructive, win-win
    settlement of Cushman hydroelectric project issues that will produce
    enormous public benefits and avert an imminent cascade of costly and
    divisive litigation and political conflict.
        Congressional funding during the last four fiscal years for
    essential technical and legal assistance has allowed the Tribe to make
    substantial progress in developing and building consensus for a
    pragmatic and equitable solution to Cushman Project-related issues.
        The Tribe asks that Congress support continuation of funding in
    this pivotal year, so that progress achieved to date can be converted
    into a constructive settlement. This long and arduous process is now
    coming to a conclusion, aided by settlement initiatives from
    Congressman Norm Dicks. There will not be another opportunity to
    constructively resolve Cushman Project issues.
        For nearly 70 years, the heretofore unlicensed Cushman
    hydroelectric project has diverted the North Fork Skokomish River out
    of its watershed. This has severely disrupted the Skokomish River
    watershed/ecosystem and wreaked environmental, social, economic and
    cultural havoc on the Skokomish Tribe and general public.
        Working collaboratively with local, state and federal agencies,
    Skokomish Valley residents and a host of public-interest groups, the
    Tribe has achieved substantial consensus on a plan for future Cushman
    Project operation that would restore damaged salmon runs, reverse
    degradation of the largest estuary on Hood Canal, and reduce the
    Cushman Project's contribution to flooding problems on the main stem
    Skokomish River.
        The Tribe's collaborative approach has also achieved unprecedented
    consensus with Mason County on a Skokomish River flood plan. The flood
    plan, Cushman Project plan, and South Fork forest plan are being folded
    together into an overall plan to reduce public costs and increase
    public benefits from the Skokomish River watershed.
        The Federal Energy Regulatory Commission's final licensing proposal
    for the Cushman Project would perpetuate tens of millions of dollars in
    annual damages to the Tribe and general public. It would satisfy no one
    and set off an uncontrollable chain reaction of legal conflict and
    political turmoil with far reaching consequences, if allowed to stand.
        The Tribe believes strongly that further conflict can be avoided
    and all parties' reasonable interests can be accommodated through a
    creative, pragmatic negotiated settlement of all Cushman Project
    related issues. Continued funding in fiscal year 1998 will allow the
    Tribe to build on substantial progress to date--and on Congressman Norm
    Dicks' recent settlement initiative--to secure the enormous public
    benefits of a negotiated settlement.

    Proposed budget

    Legal consultants.............................................   $90,000
    Technical consultants.........................................   300,000
    Meeting and travel expenses...................................    10,000
                        --------------------------------------------------------------
                        ____________________________________________________

          Total costs.............................................   400,000

        Technical Consultants: Negotiation and implementation of a global
    settlement for Cushman Project related issues by the Tribe, City of
    Tacoma, and Federal Government requires that the Tribe have the
    assistance of highly skilled, specialized professionals. Consultants
    will include a project manager/coordinator; planner/negotiation
    advisor; tribal negotiating team members; and specialized technical
    consultants including engineers, economists, anthropologists,
    biologists, geophysicists, hydrologists.
        Legal Consultants: Legal advice and representation will be required
    to assist in finalizing a negotiated settlement of Cushman Project
    issues among the City of Tacoma, the Tribe and Federal Government.
        Meeting and Travel Expenses: Cost of meeting space, meals and
    travel for tribal advisory committee and negotiating team members.
                                     ______

              Prepared Statement of Bristol Bay Area Health Corp.

        The Bristol Bay Area Health Corporation (``BBAHC'') is a private,
    non-profit corporation organized in June, 1973, by the Alaska Native
    villages of the region. BBAHC provides a wide variety of health
    services, including hospital services, family medicine, and other
    preventive and community health services. BBAHC serves more than 7,000
    year-round residents and 32 villages within the Bristol Bay and Calista
    regions, two of the twelve regions into which Alaska was divided under
    the Alaska Native Claims Settlement Act of 1971. In 1980, BBAHC became
    the first tribal organization in the United States to take over the
    operation of a hospital from the Indian Health Service (``IHS'') under
    the authority of the Indian Self-Determination and Education Assistance
    Act (``ISDEA''). In 1994, BBAHC entered into the Alaska Tribal Health
    Compact and, since that time, has been administering its health
    programs under Title III of the ISDEA. Since 1973, the Kanakanak
    Hospital in Dillingham has been accredited by the Joint Commission on
    the Accreditation of Healthcare Organizations.
        BBAHC Priority Budget Items. Focusing specifically on fiscal year
    1998 IHS budget items which are of highest priority in our region (as
    well as in other regions within the state of Alaska) we respectfully
    ask the Subcommittee to: fund mandatory cost increases--$80 million
    above the administration's request; fully fund contract support costs;
    provide requested $90 million for IHS Sanitation Facilities Account;
    provide $5 million in recurring funds for patient travel costs; provide
    the Administration's requested amount for the Community Health Aide
    Program in Alaska; increase authority and funding for the Alaska Area
    Office so that 10 additional leases may be funded under the clinic-
    built village leasing program and provide additional funds for
    improving existing clinics; provide BBAHC $1.5 million to support Phase
    I of Kanakanak Hospital building rehabilitation plan, including roof
    replacement; and reinstate the statutory prohibition on charging a co-
    payment to any IHS beneficiaries or to means testing beneficiaries.
        Mandatory Cost Increases.--BBAHC respectfully requests the
    Subcommittee to appropriate sufficient funds in fiscal year 1998 to
    cover all mandatory cost increases incurred by the IHS and tribal
    health care providers, including medical inflation, mandatory payroll
    increases, and population growth. The fiscal year 1997 funding level
    for IHS included a less than one percent increase for inflation and no
    adjustment for population growth. Consequently, tribal and IHS health
    programs had to absorb over 50 percent of mandatory cost increases in
    fiscal year 1997. The fiscal year 1998 budget would require absorption
    of 90 percent or $80 million in mandatory cost increases.
        Underfunding of IHS mandatory cost increases is particularly
    inequitable when compared to other federally-funded health care
    programs. In fiscal year 1997, while IHS received less than a one
    percent funding increase for inflation--far below the actual inflation
    rate, which exceeded 10 percent in some areas--the Medicare and
    Medicaid programs received a 7 percent funding increase for inflation.
    In addition, the IHS, which provides services to over 1.4 million
    patients residing primarily in rural areas, is limited in its ability
    to realize the same kinds of cost savings which other federally-funded
    health care programs have been able to achieve through managed care
    programs In urban areas.
        Contract Support Costs.--Contract Support Costs (``CSCs'') is an
    area of the IHS budget that is chronically underfunded. While we are
    pleased that the Administration has requested a $12 million increase in
    fiscal year 1998 over the fiscal year 1997 level, it still is not
    sufficient to cover anticipated shortfalls in funding for CSCs. If the
    $12 million request is fully funded, the shortfall for the Indian Self-
    Determination Fund alone is still estimated by IHS to be $39 million.
    The National Indian Health Board estimates the unmet need for contract
    support for existing contracts at $12 million and the projected need
    for new contracts at $60 million.
        We urge the Committee to work with the Department of Health and
    Human Services to assure that sufficient funds are included in the
    fiscal year 1998 budget to meet the contract support requirements set
    forth in section 106(a)(2) of the Indian Self-Determination Act (``the
    Act''). Furthermore, we urge that reporting requirements be changed so
    that the IHS is required to provide the Congress with information on
    every contract or compact which is in the negotiation process and which
    will require funding from the contract support fund. Presently, the IHS
    is only required to report a shortage of Contract Support funding for
    the current and previous year.
        Sanitation Facilities.--We appreciate efforts by Congress and the
    Administration to systematically address the need for sanitation
    facilities. As pointed out in the Administration's fiscal year 1998
    budget request, there is a direct link between improved sanitation
    conditions and improved health. The IHS, as required by the Indian
    Health Care Amendments of 1988, has prepared a 10-year plan to address
    sanitation facility deficiencies and also prepares an annual report to
    Congress to identify the current inventory of deficiencies. The
    Administration's request for fiscal year 1998 for construction of
    sanitation facilities nationwide is $90 million, $2.2 million above the
    fiscal year 1997 enacted amount of $87.9 million. The IHS has estimated
    that annual appropriations of $146.5 million would be required to meet
    the 10-year plan by the year 2000 to serve existing Indian homes.
        Even with full funding of the IHS 10-year plan, however, Alaska
    would still be seriously deficient in sanitation facilities. In Alaska,
    alone, there is an unmet sanitation need exceeding $1 billion. Much of
    rural Alaska lives without an adequate supply of safe drinking water
    and without essential sanitation facilities. It should also be noted
    that the calculation of need for the 10-year plan only includes the
    estimated cost of so-called ``economically feasible'' projects. We
    believe the IHS should also include on this list those projects which
    they consider ``not economically feasible.'' Many of the villages in
    Alaska, which have very high construction costs due to climatic and
    geologic conditions, were not even considered in this cost estimate.
    Therefore, even if the 10-year plan were fully-funded, a number of
    Alaskan villages would still have inadequate sanitation facilities.
        Patient Travel.--A special concern for BBAHC, and rural Alaska,
    generally, is the high cost of patient travel. BBAHC serves a 45,000
    square mile area--an area larger than the state of Ohio. Therefore, we
    depend on local air taxi services to assist with medical evacuations
    from our 32 villages. The difficult nature of travel within BBAHC's
    service area, and the need to transport patients to the Alaska Native
    Medical Center in Anchorage for health care which cannot be provided in
    Dillingham make adequate funding of patient travel imperative. In past
    years, patient travel has been seriously underfunded. One result of
    inadequate funding for patient travel is that many patients are forced
    to forego or postpone care until an easily treatable condition has
    become a full-blown emergency. Thus, underfunding patient travel in
    fiscal year 1998 will actually cost more and will force BBAHC to choose
    between funding patient travel, an absolute necessity for providing
    access to services in Alaska, and paying for actual patient care. BBAHC
    fully supports the Alaska Native Health Board's request for a separate
    appropriation in the IHS budget of $5 million for travel costs.
        The Community Health Aide Program in Alaska.--The Community Health
    Aide Program (``CHAP'') is the primary health care delivery system for
    approximately 171 rural Alaskan villages and is a very cost-effective
    program. We appreciate the funding that was provided in fiscal year
    1997 to update the Community Health Aide/Practitioners Manual which we
    understand is currently underway. We urge the Subcommittee to support
    the President's request for fiscal year 1998 which maintains the fiscal
    year 1997 level of funding of $43.9 million.
        Village Built Clinic Leasing Program.--BBAHC strongly urges that
    the leasing authority of the Alaska Area Native Health Service
    (``AANHS'') under the Village Built Clinic leasing program (``leasing
    program'') be increased from the current level of 170 to 180, and that
    a commensurate increase in funding be appropriated for the ten
    additional leases. BBAHC has two outstanding requests for clinic leases
    under the leasing program, one for a clinic at Portage Creek and the
    other for a clinic at South Shore Aleknagik. According to the AANHS, it
    has already funded 169 out of the 170 leases it is authorized to fund
    and the remaining lease will go to another tribally-operated clinic in
    the Alaska Area which is not within the BBAHC service area. Part of the
    problem for BBAHC is that, under the leasing program, we need four
    additional health aides (two per clinic) to meet eligibility
    requirements for the two requested leases, amounting to a total
    estimated cost of $150,000. An additional $50,000 would be required for
    training of these individuals, thus amounting to a total cost of
    $200,000 per year for staffing of the two new clinics.
        We would also like to request additional funds for making upgrades,
    modifications and additions to existing village-built clinics and where
    appropriate, replace existing clinics. These much-needed improvements,
    which could be funded through a new program similar to the Maintenance
    and Improvements (M&I) Program, are above and beyond the realm of the
    current leasing program.
        Kanakanak Hospital.--BBAHC has recently concluded a long range
    facility plan for upgrade and expansion of the existing Kanakanak
    Hospital in Dillingham to accommodate changing and growing, health care
    and housing needs. BBAHC requests $1.5 million to support Phase I of
    the planned $20 million overall project which would be used for
    expansion of the Hospital Emergency Room. The long range facility plan
    addresses a number of existing facility needs, including replacement of
    the hospital roof which is in danger of collapsing. The flat roof is
    designed to withstand a snow load of only 40 pounds per square foot in
    an area where the minimal design load for buildings is 70 pounds per
    square foot. At least nine similar flat roofs have collapsed in other
    southwest Alaska facilities, including a roof of a local Dillingham
    school. The estimated cost of replacing the roof alone is $1.6 million.
        Renew the statutory prohibition on charging a co-payment to IHS
    beneficiaries.--On behalf of the Alaska Native patients we serve, BBAHC
    urges Congress to reinstate appropriations language which would
    prohibit the Indian Health Service from establishing means-testing for
    IHS beneficiaries, or charging a co-payment fee for any IHS program or
    service. The provision of Indian health care is one of several
    responsibilities the United States took on in return for land and other
    resources relinquished by tribes. We believe that this responsibility
    should not be diminished and respectfully request that the statutory
    prohibition language which was removed from the fiscal year 1997
    appropriations bill be reinstated.
        We appreciate the opportunity to voice our concerns in connection
    with the proposed IHS budget for fiscal year 1998 and would be happy to
    provide any additional information concerning our testimony to the
    Committee.
                                     ______

    Prepared Statement of Margie Mejia, Chairperson, Lytton Ranceria/Lytton
                       Band of Pomo Indians of California

        The Lytton Rancheria/Lytton Band of Pomo Indians wishes to submit
    this testimony for the record regarding the fiscal year 1998 budget for
    programs in the Bureau of Indian Affairs. Specifically, we express our
    support for the requested $4 Million increase for the Small and Needy
    Tribes Program, for a proposed fiscal year 1998 total of $8 Million.
        Located in Sonoma County, California, Lytton Rancheria is a newly
    restored/recognized Tribe [Scotts Valley Band of Porno Indians, et al
    v. United States of America et al. USDC No. Civ. No. C-86-3660-WWS;
    Sept. 6, 1991]. The Tribe has been removed from federal services for
    the past thirty years--the efforts to restore our status as a Tribe
    spans a period of ten years, five of which were spent in legislation.
    During this time the ill effects of termination have continued to take
    their toll on our people in terms of loss of property; education and
    health benefits; increased poverty; high unemployment; disruption of
    families; death of Tribal members due to alcohol and related illnesses
    or accidents; and the destruction of hope.
        The Tribe is currently landless, comprised of approximately 200
    Tribal members, and governed by a Council consisting of seven Tribal
    Officers, elected on May 14, 1995. Mrs. Margie Mejia is the current
    Chairperson and representative of the Tribe. The Tribal membership is
    47 percent male and 53 percent female, of these 40 percent are adults
    and 60 percent are children under 18. Tribal member residences are
    primarily in Sonoma County (57 percent), followed by Del Norte County
    (27 percent), with the remainder scattered throughout the State of
    California and the continental United States (16 percent).
        The Tribe plans to empower its constituents through education and
    training. The general membership approved a constitution on January
    20,1996, to establish laws that the Tribal members have agreed to live
    and abide by. Other empowering documentation which has recently been
    developed and is currently being utilized include: Enrollment Manual,
    Election, Enrollment and Voting Procedures Code, Tribal Government
    Tribal members have agreed to live and abide by. Other empowering
    documentation which has recently been developed and is currently being
    utilized include: Enrollment Manual, Election, Enrollment and Voting
    Procedures Code, Tribal Government Operations Manual, Tribal Court
    Procedures and related codes. The Tribe is willing to devote its time,
    energy and resources in order to become self-sufficient.
        Currently, the Tribe operates under several grant programs
    sponsored and overseen by the BIA, IHS, HHS, ANA, EPA, etc. A Library
    Services Grant provides publication materials needed for education and
    advancement. A Health Services Grant provides for the position of a
    Community Health/Alcohol Abuse Prevention Worker, which the Tribe only
    recently hired and expects to have a fully operational program running
    within three months. Other programs educate and support our leadership
    (ANA, ATG), tend to the health needs of members (SCIHP, CRIHB), our
    children (ICWA) and empower us with the ability to create our own
    economic development project(s) to ensure our future self-sufficiency
    and self-sovereignty (ANA, ATG, BIA Multi-Year). Since we are a
    landless Tribe with critical needs in the area of land acquisition and
    housing development, I would recommend that funding for the Native
    American Housing Assistance and Self-Determination Act of 1996 (Public
    Law 104-350) be increased to $850 Million for funding an Tribes. In
    addition, I would like to have monies set aside within the bill for
    small and needy Tribes funding.
        Without continued funding, especially in the crucial formative
    years for new Tribes, our membership will stagnate and revert back to
    the downward spiral of life quality experienced by so many Native
    Americans for so many years.
                                     ______

      Prepared Statement of Jaime Pinkham, President, Intertribal Timber
                                    Council

                                    summary
        Mr. Chairman, I am Jaime Pinkham, President of the Intertribal
    Timber Council. I hereby submit the following summary and comments
    regarding the Bureau of Indian Affairs Forestry program and its
    proposed fiscal year 1998 budget: Add $300,000 to Area Forestry for
    four adrenal foresters, and add $150,000 to Central Office Forestry for
    two additional foresters; add $1 million to Forest Management Inventory
    arid Planning; add $500,000 to Woodlands Management, and add $3 million
    for a new I.R.M.P. line item.
                     intertribal timber council background
        The Intertribal Timber Council (I.T.C.) is a twenty one year old
    organization of sixty forest owning tribes and Alaska native
    organizations that collectively possess more than 90 percent of the 7.3
    million forest acres--and a substantial portion of the 8.6 million
    woodland acres--that are under B.I.A. trust management. These lands are
    vitally important to their tribes. They provide habitat, watershed,
    cultural and spiritual sites, recreation and subsistence uses, and
    through commercial forestry, income for the tribes and jobs for their
    members. In Alaska, the forests of Native corporations and thousands of
    individual allotments are equally important to their owners. To all our
    membership, our forests are essential to our physical, cultural and
    economic well-being, and assuring their proper management is our
    foremost concern.
              overview of declining bia forest management planning
        Mr. Chairman, the Intertribal Timber Council's fiscal year 1998
    testimony focuses, for the third year in a row, on the growing
    deficiency of the B.I.A.'s forest planning capability. Mr. Chairman, it
    is an unfortunate truth that the Bureau, despite its legal obligations
    as trustee, has never fully provided current and appropriate management
    plans for the forest and woodland resources it holds in trust for
    tribes across the country. Prior to 1985, B.I.A. records document that
    only 21 percent of the nation's Indian forestlands were managed under
    approved forest management plans. To help redress this appalling state
    of affairs, Congress instituted a separate $1.2 million program in
    fiscal year 1985 for forest management inventory and planning (FMI&P).
    That, along with increased levels of Forestry staffing at the B.I.A.
    Area and Central Offices, enabled the status of Native American forest
    planning to begin to improve. With continued vigilance by Congress and
    consequent attention from senior Bureau officials, along with an fiscal
    year 1991 funding increase to FMI&P of $300,000, the volume of trust
    forestland acres in compliance with planning requirements rose to above
    80 percent in 1993.
        However, since then, that figure has steadily declined. According
    to the B.I.A.'s most recent Status of Forest Management Inventories and
    Planning report, dated September 30, 1995, the volume of trust
    forestland acres covered with current management plans has declined to
    62 percent. But even that figure does not present the true scope of
    B.I.A. forest management planning shortcomings. Most of the acreage
    with current plans is concentrated among a relatively few reservations
    with large forests whose comparatively large staffs can develop forest
    management plans on their own. On a reservation-by-reservation basis,
    only 36 percent of forested reservations had current plans in place as
    of 1995.
        Since 1995, although we are not aware of any updated tables or
    records, we are certain the situation has continued to decline, most
    likely at an accelerated rate. Because, since 1995, funding for B.I.A.
    forest management inventory and planning, while remaining flat, has
    effectively been further eroded by both inflation and the increasing
    complex requirements of forest management planning. Moreover, since
    1995, B.I.A. Forestry personnel at the Area and Central Office levels,
    who provide the planning expertise for the great majority of smaller
    forested reservations, has been roughly cut in half.
        This is intolerable. With increasingly insufficient funds for FMI&P
    activities, and with sharply reduced manpower needed to oversee those
    activities, interpret data, and develop the actual plans, it is quite
    possible that soon only 25 percent or less of reservation forests will
    have current management plans. A forest without a current management
    plan is, in effect, out of control. For even the most basic commercial
    forest activity, timber harvest, the managers have little certainty
    they are harvesting too many trees or the right trees. The consequences
    are nothing more than guesswork, and given the long term production
    cycles of forests, the cumulative effects could easily be the severe
    damaging of a tribe's forest resource, if not its outright destruction.
        To assure that the most basic rudiments of forest planning can be
    provided tribal forestlands, we request that $300,000 be added to the
    Area Office Forestry budget for four additional professional foresters,
    that $150,000 be added to the Central Office Forestry budget for two
    additional professional foresters, and that $1 million be added to
    Forest Management Inventory and Planning.
        In addition, we request that Woodlands Management be increased by
    $500,000, and that $3 million be added for integrated resource
    management planning.
        Each of these four requests are discussed in further detail below.
     add $300,000 to area forestry and $150,000 to central office forestry
                for additional professional forester capability
        Between fiscal year 1995 and today, B.I.A. Area Office Forestry
    personnel have been reduced from about 25 to about 15. In the same
    time, Central Office Forestry personnel have been reduced from about 19
    to about 8. Although reduced by roughly half from fiscal year 1995
    levels, these personnel are called upon to try to provide the
    professional and scientific expertise required for the successful trust
    planning and management of 7.3 million forest acres and 8.6 million
    woodland acres on more than eighty reservations throughout the entire
    United States. They are trying to do this at a time when forestlands
    are being recognized as never before for their biological significance
    and when forestlands are being intensely scrutinized and challenged on
    many aspects of their management, and particularly on any commercial
    utilization. Yet, with or without current plans, many tribes have
    little choice but to rely on the commercial use of their forest for at
    least some portion of essential tribal revenues.
        Of the 83 reservations with economically viable timberlands, many
    with smaller forests have no resident professional forestry personnel.
    And the great majority of the 83 reservations do not have personnel
    with the specialized expertise necessary for the development of a
    forest management plan. So those tasks, by necessity, fall upon the 15
    Area Forestry personnel spread throughout the B.I.A.'s twelve Area
    Offices, and upon the four technicians in the Central Office's Branch
    of Forest Resources Planning. It is, quite simply, well beyond any
    realistic expectation that such limited manpower can develop, review,
    and oversee implementation of management plans required by law for the
    83 reservations. In fact, the Branch of Forest Resources Planning has
    been forced by staff reductions to eliminate any forest planning
    capability, and today principally provides only inventory analysis.
        Today's request for six additional personnel is an exceptionally
    modest plea to begin the restoration of the B.I.A. forest planning
    capability, because tribal forests, without plans, are open targets for
    mismanagement or legal challenge, either of which would diminish or
    interrupt what for many tribes is a critical source of essential
    operating revenue.
           add $1 million to forest management inventory and planning
        The Forest Management Inventory and Planning budget covers the
    special one time costs associated with the periodic development of
    forest management plans. These funds are scheduled for application to
    various tribal forestlands as they renew their management plans. The
    funds are supposed to cover the costs of planning activities not
    provided in a reservation's regular, on-going forestry budget, such as
    remote sensing, mapping, inventory, management and implementation
    planning, and environmental assessments. These funds are particularly
    needed for those smaller tribal forests where there are few or no
    forestry personnel. But since fiscal year 1985, when the program was
    funded at $1.2 million, these funds have not kept pace with either
    inflation or the expanding requirements of forest planning and
    management.
        One particular example where additional FMI&P funding is needed is
    N.E.P.A. compliance. As of the end of fiscal year 1995, which is the
    most current data available, approximately 30 percent of Category 1
    forests (a major forested reservation with more than 10,000 acres of
    trust commercial timberland or an annual allowable cut of more than one
    million board feet) were without current environmental assessments,
    rendering them technically out of compliance with the National
    Environmental Protection Act and so subject to possible challenge and
    shut down. One of the larger tribal forests, that of the Navajo Nation
    has been shut down for several years because of challenge to planning
    and N.E.P.A. assessments.
        For the smaller Category 2 forests, the shortcomings are even more
    appalling. Only about 39 percent have accepted annual allowable cuts or
    a current plan. Less than a quarter of them have environmental
    assessments.
        To correct these deficiencies, the I.T.C. requests that the program
    be increased by $1 million for fiscal year 1998. While B.I.A. documents
    indicate a needed FMI&P increase of $5.1 million a year, the I.T.C. is
    seeking a $1 million increase in hopes that a more modest sum may be
    more achievable and provide at least a modicum of desperately needed
    improvement in the Bureau's planning capability.
                     add $500,000 for woodlands management
        We also request an increase of $500,000 for B.I.A. Woodlands
    Management, a doubling of the requested level. Mr. Chairman, in 1988,
    the B.I.A. Division of Forestry was formally assigned responsibility
    over the 8.6 million acres of tribal woodlands, including 4 million
    acres with commercial capability. At that time, B.I.A. data indicated
    $3 million was needed to properly initiate trust management of
    woodlands. $500,000 was provided, and has essentially stayed at that
    level ever since. Today, those funds cover the costs of woodlands
    managers at three Area Offices in the Southwest and the costs of on-
    the-round projects. None of these woodlands have formal management
    plans, and only a few have rudimentary inventories. With little or no
    firm data, the three Area Woodlands Managers are essentially flying by
    the seat of their pants in trying to cover the millions of acres within
    their responsibility. Yet woodlands are intensively used across a wide
    range of activities, particularly for subsistence and small economic
    undertakings. An additional $500,000 would allow a greater degree of
    inventory and planning, a few additional personnel for increased
    oversight, and the implementation of an increased percentage of the
    annual backlog of submitted projects.
             add $3 million for funds for a new i.r.m.p. line item
        Finally, Mr. Chairman, I would like to request that $3 million be
    added as a new line item for Integrated Resources Management Planning
    in Non-Recurring Natural Resources Management.
        Mr. Chairman, it is generally accepted today that forestlands are
    vital, complex ecosystems, and that the harsh ``cut and plant''
    approach of the past is grossly inadequate for the perpetuation of a
    healthy forest resource. Everywhere you look, whether it is the forest
    industry, state forestry, or federal forestry on B.L.M. and U.S. Forest
    Service lands, you see a new focus on comprehensive ecosystem
    management. Tribes are gratified by the growing understanding that our
    natural resources are precious and must be nurtured. Yet it is also
    frustrating to tribes that our Federal trustee, while heaping attention
    on comprehensive land management in other agencies, is turning a blind
    eye on its land management obligations to tribes. Other than one person
    in the B.I.A. Division of Forestry, the Bureau has no funds dedicated
    to comprehensive ecosystem management planning, also referred to as
    integrated resource management planning. Yet, among all Federal
    agencies, I.R.M.P.s are most appropriate, and needed, for tribal trust
    lands.
        Mr. Chairman, the Indian people live on and from their land. While
    our population is rapidly expanding, our land base is generally static.
    As a result, our land base is under increasing pressure. As noted in
    the 1994 report of the Indian Forest Management Assessment Team, tribes
    are progressive, dedicated stewards of our land, but the severely
    limited planning resources available to us are precluding options and
    flexibility. Moreover, should I.R.M.P.s not be available for tribal
    lands, reservations will become management blank spots in the broader
    fabric of surrounding land.
        B.I.A. has recently estimated an annual need of $15 million for ten
    years to develop I.R.M.P.s for all tribes. And on Indian forestlands
    alone, the I.F.M.A.T. report noted that $94 million is needed annually
    to bring B.I.A. other-than-direct timber production management
    activities up to parity with the U.S. Forest Service. Yet, B.I.A. has
    next to nothing. Accordingly, we request the establishment of a new
    I.R.M.P. line item, and that it be funded at $3 million to begin to
    address these shortcomings.
        Mr. Chairman, that concludes my testimony. Thank you.
                                     ______

    Prepared Statement of Stephen A. Janger, President, Close Up Foundation

        Mr. Chairman, distinguished members of this Subcommittee, my name
    is Stephen A. Janger and I am President of the Close Up Foundation. It
    is a privilege for me to submit this testimony regarding Close Up's
    efforts to provide citizenship education opportunities for American
    Indian and Alaska Native students and educators.
        Before I begin to discuss Close Up's funding request for fiscal
    year 1998, I want to thank the Subcommittee for its past support. The
    civic education of thousands of American Indian and Alaska Native
    students has been enhanced by funds this Subcommittee made available
    through the Bureau of Indian Affairs (BIA). Unfortunately, no funds
    were made available for current Close Up programs in the fiscal year
    1997 Appropriations Act. Through this testimony, I hope to convince
    this Subcommittee that Close Up's work with American Indian and Alaska
    Native students and educators is a very worthwhile expenditure of
    scarce federal funds. In this regard, we respectfully request $300,000
    in fiscal year 1998 funding.
                                    overview
        American Indian students hold a unique place in American society as
    citizens of both the United States and their Indian Nation, yet there
    are few opportunities in school to examine the implications of this
    ``dual citizenship.''
        Nearly a half million American Indian and Alaska Native students
    are enrolled in schools across the nation, and there are many
    indications that their education is not comprehensive and needs
    enhancements to enable these students to be competitive. In 1991, the
    Indian Nations At Risk Task Force established a set of education goals
    to guide the improvement of all federal, tribal, private and public
    schools that serve American Indians and Alaska Natives and their
    communities. These goals call for all Native American students to
    ``demonstrate civic, social, creative and critical thinking skills
    necessary for ethical, moral and responsible citizenship and important
    in modern tribal, national and world societies.'' Simply, native
    students must understand the implication of their dual citizenship to
    be actively involved in both tribal governments and the democratic
    process.
        Close Up's Washington High School Program responds to the need for
    educational tools for Native students and their teachers. The Close Up
    Washington program uses a hands-on approach to civic learning that
    picks up where traditional textbooks leave off. Close Up participants
    don't just listen to lectures, they take part in debates, role-play
    activities, simulation exercises, group work, cooperative learning
    situations, and directed discussions. They are challenged to apply what
    they learn to real world scenarios.
        Close Up participants meet with the people who make government
    work. In seminars, students discuss the process of government with
    leading decisionmakers, policy experts, diplomats, and journalists.
    They also have the opportunity to hear their leaders' views first-hand,
    and share their opinions and concerns directly with their elected
    officials. These opportunities serve to de-mystify U.S. government and
    its elected members, making the system of government accessible and
    engaging to young people.
        Based on the unique relationship between the federal government and
    the tribes, it is especially important that Native American students
    understand the process.
                          the need for civic education
        In February 1997, the Washington Post Magazine featured an article
    on Native American issues that included statistics outlining the status
    of Native Americans in society. While not new, the statistics reflected
    an alarming reality: of any ethnic group in America, Indians have the
    highest rates of poverty, unemployment, and disease. In his article,
    Peter Carlson asserted that ``Native Americans remain at the bottom in
    almost every measurable economic category.'' With Indians making up
    less than 1 percent of the population in the United States, it is vital
    that Native students learn to be leaders on behalf of their tribes if
    these statistics are to ever change for future generations.
        The Native American people of the United States are embarking on a
    new course in their relationship with the federal government. As
    federal funding decreases each year, those living on federally
    recognized Indian reservations will require educated, skilled leaders
    who can be vocal advocates for the needs of their tribes. Senator John
    McCain, former chairman of the Senate Indian Affairs Committee,
    confirmed this need when he stated that few legislators know ``* * *
    about the clause in the Constitution that says Congress has a special
    responsibility in dealing with Native Americans.'' Without appropriate
    education, American Indian struggles will continue with nominal support
    from voters and politicians who could have an impact on the lives of
    American Indian people.
        But balancing these worlds and their role in them can be very
    difficult for young people. Close Up's American Indian and Alaska
    Native program provides Native students with an opportunity to study
    what it means to have a foot in two cultures, or ``two worlds.'' For
    Native students, traditional values taught at home often conflict with
    what is taught in school. Through their Close Up experience, students
    start to see a circle being woven: They learn to respect tribal elders
    for their roles in the tribal council; They realize if they want to
    protect their sovereign rights as American Indian citizens, they need
    to obtain a comprehensive knowledge of government at all levels,
    federal, state, and tribal; and by sharing their life experiences with
    students from completely different backgrounds, Native students develop
    more pride in, and recognize the value of, their own culture.
        This increased pride enables students to begin looking at their
    culture from other perspectives. By visiting their nation's capital,
    students have the opportunity to see first-hand how vital it is for
    them to take a role in preserving their sovereign rights. They observe
    first-hand how their tribal leaders represent the tribe to the federal
    government. Students also study the process of working directly with
    the federal government. This information is particularly relevant to
    Native American students who may one day use this familiarity with the
    government as a vehicle to preserving their rights as both American
    citizens and members of their tribe.
        This is perhaps best enunciated by a social studies teacher at
    Santa Fe Indian School who wrote, ``Our young people are living in two
    worlds, and in the non-Native world they need to learn to be just as
    competitive as everyone else. Our tribal leaders and elders always tell
    our young people that they'll be the future leaders, but no one's doing
    anything to prepare them. That's what this program is all about.''
        Close Up's message of informed participation is not limited to the
    federal government. The Foundation encourages educators to develop
    civic education programs at the local level. We know that we have
    inspired Native American educators to conduct local programs, one
    example is the local program held annually at the Santa Fe Indian
    School. The 1995/96 topic, ``Unity and Sovereignty/Empowerment of
    Youth,'' involved student participants most of whom were enrolled
    members of one of the New Mexico Pueblos. The goal of this two-day
    program conducted for New Mexican Native American youth, tribal
    leaders, community leaders, and educators was to train youth to become
    responsible and knowledgeable in the areas of sovereignty, Indian law,
    tribal government systems, cultural awareness, leadership, and
    citizenship.
        Another example is a program established by Marilyn King-Johnson
    (Navajo), the project manager for the Navajo Nation Youth Incentive
    Program. Ms. King-Johnson said her interest in establishing a local
    program came to her while attending the Close Up Washington program.
    ``I kept thinking `why can't we do this at home'? We tell our youth to
    learn about the state and national government, but we don't teach about
    the Navajo Nation. I wanted to teach the young people something not
    taught in school.''
        The enthusiasm generated by attending the Close Up Washington
    program multiplies the reach of expanded civic learning many times
    over. Teachers and students return home with newfound knowledge,
    teaching methodologies, and self-esteem, and they are anxious to share
    all of this with their community. Without federal funding, however,
    this program and its contribution to Native American students and their
    teachers will cease to be available to most of them.
                american indian and alaska native participation
        For more than twenty-five years, the Close Up Foundation has
    promoted responsible participation in the democratic process through
    educational programs in government and citizenship. With the help of
    this Subcommittee, Close Up has developed and tried to sustain an
    outreach policy to act on the belief that civic education is important
    to all students regardless of their families' financial status. This
    outreach policy, supported by fellowships to assist students with
    financial need, has ensured that a diverse student body is able
    participate in the Close Up program.
        During the last year that Close Up received federal support (1995-
    96 program year), we had 248 students and teachers from 38 BIA high
    schools, and 103 Alaska Native students from remote villages, rural
    settings, and urban areas participate in the Close Up Washington High
    School Program. The vast majority of these students received fellowship
    support. We now find that without federal fellowship support we are
    losing the participation of many schools, and our forecast is that we
    will lose many more schools next year.
        Most of the schools no longer able to participate are exactly the
    schools you want to reach with a program like Close Up. These are
    schools in the most remote and isolated regions of the country, schools
    that have few, if any, outside educational opportunities, and,
    generally speaking, schools with a student population that would
    receive the greatest benefit from our program. Although Native
    students, as they have in the past nine years, are conducting
    fundraising drives to try to raise at least some of the money
    themselves, the desperate financial situation of many of these students
    and their communities makes it impossible for them to raise the
    necessary funds. The lack of a financial base within the community that
    could sustain a student fundraising effort makes the need for federal
    support all that more urgent.
        Despite all of the challenges these communities face, Close Up
    enjoys strong support in the Native American community. One example is
    at their January 1997 conference the National Congress of American
    Indians adopted a resolution of support for the Close Up program. We
    are very proud to have received such an endorsement.
        Mr. Chairman, the glaring need for civic education opportunities
    for American Indian and Alaska Native students has been clearly
    demonstrated by many educators and experts. The past support of this
    Subcommittee has made it possible for the Close Up Foundation to try to
    address this need. We are very proud of what we have been able to
    accomplish. Without federal support, however, we cannot continue our
    work with the multiplier effect that leads to important learning
    productivity. Therefore, we respectfully request $300,000 from the
    fiscal year 1998 Interior and Related Agencies Appropriations bill for
    our programs for American Indians and Alaska Natives. We would be glad
    to respond to any questions and to provide any additional programmatic
    or budgetary detail. Thank you very much.
                                     ______

     Prepared Statement of Virgil J. Murphy, Chairman, Stockbridge-Munsee
                       Community Band of Mohican Indians

        The Stockbridge-Munsee Tribe appreciates this opportunity to
    present our requests for funding in fiscal year 1998 for the Indian
    Health Service. We request that this Subcommittee provide fiscal year
    1998 funding for our two priority projects: $3.6 million for a new
    wastewater treatment facility for the Stockbridge-Munsee Community, and
    $2.8 million for a new health clinic for the Stockbridge-Munsee
    Community.
        The Stockbridge-Munsee Tribe was once located in what is now the
    northeastern United States. However, in the early 1800's, we were
    removed from our ancestral lands to Indiana, and later relocated to
    what became the State of Wisconsin. Since 1856, our homeland has been a
    46,000-acre reservation in central Wisconsin. The Mohican Nation has
    nearly 1,600 tribal members, over 800 of whom live on the reservation.
    The Tribe's major economic opportunity has been our small but
    successful casino and bingo operation. In 1996, the Mohican North Star
    casino employed some 550 people, about one-third of whom are tribal
    members. As a result of gaming, we are now the largest employer in
    Shawano County, WI. The Community uses gaming proceeds to supplement
    funding for such tribal governmental programs as Elderly Assistance,
    Higher Education and Vocational Training, Housing Assistance, and
    Economic Development. In addition, we have built two homeless shelters
    and made numerous donations for assistance for needy tribal members
    from our gaming proceeds. The Tribal Council has two funding requests
    we have determined to be of highest importance, and we submit them for
    this Subcommittee's consideration.
           wastewater treatment facility and sewage collection system
        The fiscal year 1998 budget request for the Indian Health Service's
    Sanitation Facilities Construction account proposes a modest increase
    of $2.2 million over the fiscal year 1997 enacted level. While we
    support this requested increase, we note that the age of deficit
    reduction is evident here, because in the fiscal year 1997 budget
    request, the Administration requested an increase of $43 million over
    the previous year's funding level for sanitation facilities
    construction. Clearly, the Administration, Congress and tribes are
    forced to struggle to determine priority programs which will receive
    funding as efforts to balance the federal budget continue.
        As this Subcommittee knows, over the last several years, roughly
    one-half of the Sanitation Facilities Construction account has been
    used to address the backlog of sanitation facilities deficiencies in
    Indian communities which are included in the congressionally-directed
    10-year funding plan. The total need in Indian communities for water
    and sewer facilities is currently some $1.8 billion. Using the
    Administration's fiscal year 1998 budget request as a starting point,
    unless Congress appropriates additional funding over the budget request
    for Sanitation Facilities, only some $40-50 million of the requested
    $90 million will go toward the backlog. At this rate, Indian country is
    looking at 40 years before the existing backlog of water and
    sanitation--something most Americans take for granted--is addressed.
        The Stockbridge-Munsee Community itself is in the Bemidji IHS
    Service Area, which serves Wisconsin, Michigan, Minnesota and Indiana.
    The total level of need in our Service Area last year was more than $27
    million. The amount provided, by allocation to the Bemidji Area, was
    slightly over $1 million.
        With this in mind, the Stockbridge-Munsee Tribe is in desperate
    need of a wastewater treatment facility and sewage collection system.
    The Tribe currently does not have a regional treatment facility, but
    uses a three-cell lagoon system community water and wastewater system.
    Concerns about the health and safety risks associated with an outdated
    and inefficient wastewater system--including some seepage of wastewater
    out of the lagoon cells during drought years, and groundwater seepage
    into the cells during wet years--led to the Tribe receiving joint
    funding in fiscal year 1996 through IHS and HUD to repair and upgrade
    the existing lagoon system.
        The Tribe is grateful that fiscal year 1996 funding was provided to
    upgrade our existing system, which services our main housing
    development area. However, that area is made up of only 30 households.
    Even the upgraded lagoon system is not able to meet all current
    community sanitation needs. The Tribe's Planning Department projects
    that the Tribe will need to build 50 to 60 new homes for our members in
    the course of the next 10 years. Although several existing residential
    units on the reservation utilize individual septic tanks, due to the
    soil types on the reservation, it is very unlikely that these new homes
    will be able to utilize individual septic tanks. According to data
    stored on the Geographical Information System, almost 93 percent of the
    soil types located on the Tribe's trust lands have severe septic
    limitations. The remaining 7 percent of the land has moderate
    limitations. These limitations make it is very difficult to find
    suitable areas on which to build housing for our members. As a result,
    the Tribe is seeking funding to construct a master wastewater treatment
    facility which will enable us to construct these homes on lands that
    would otherwise be unsuitable because of the septic limitations.
        The proposed wastewater treatment facility would service an
    existing 80 residential dwellings within the regional service area,
    tribal offices, our health clinic, and the casino. In addition, the new
    facility would service the contemplated new housing development and
    other commercial development, including a planned hotel. It would also
    be able to handle future increases in wastewater flow.
        The IHS Field Engineer has estimated that the cost of the new
    master wastewater treatment facility and collection system will be $3.6
    million. The need for such a system has been documented and submitted
    to the Indian Health Service for inclusion on the Sanitation Deficiency
    System (SDS) Listing. But, as this Subcommittee well knows, there are
    many tribal projects currently on the SDS list.
        Without adequate funding to the IHS, necessary and essential
    projects like the Stockbridge-Munsee's wastewater treatment facility
    and sewage collection system will not be constructed. We ask that the
    Subcommittee support the Administration's requested increase of $2.2
    million to the Sanitation Facilities Construction account, and provide
    the necessary $3.6 million to the IHS to fund our Tribe's very needed
    project.
                     new health clinic and wellness center
        For the IHS Facilities account, the President's fiscal year 1998
    budget request proposes an increase of $39 million over the fiscal year
    1997 enacted level for construction of two replacement health
    facilities in Arizona. The Stockbridge-Munsee Community strongly
    supports this request, and urges the Subcommittee to support it. We
    know from our Tribe's own experience that many tribes throughout the
    country share our great and urgent need of a new health facility.
        The Tribe has a small health clinic on our reservation which was
    built in 1973. It is only 14,000 square feet, while the Facilities
    Management Office of the IHS recommends a facility between 17,000 and
    20,000 square feet in size. In addition to being severely limited in
    space, the clinic is in poor condition, with existing structural
    problems such as leaking roofs. After a point, further additions to the
    clinic--and there have already been two--are not economically
    efficient.
        During a typical month, the clinic provides medical services to
    over 1,200 patients, dental care to 200 patients, and fills over 1,000
    prescriptions at the pharmacy. Annually, the current staff of 35 full-
    time and 14 part-time employees and 6 full-or part-time physicians and
    dentists provides necessary and essential medical treatment to over
    2,300 people--Mohican tribal members and Indians who are members of
    other tribes but live on our reservation, and numerous non-Indians who
    live within the original boundaries of the reservation.
        The severe space limitations and poor condition of the clinic make
    providing necessary medical services very difficult. As a result, in
    1996, the Tribe applied for and received a Community Development Block
    Grant from the Department of Housing and Urban Development. A grant of
    $300,000 was provided in fiscal year 1997 to design a new health clinic
    and wellness center. Currently, the Tribal Council is preparing a
    Request for Proposals for the purpose of contracting with an
    architectural firm to prepare the final construction and design of the
    new facility. The Tribe is seeking fiscal year 1998 construction
    funding in the amount of $2.8 million through the Indian Health
    Service.
        We are very proud of the services we provide our people and members
    of the surrounding community. We appreciate this Subcommittee's
    consideration of providing us with additional resources in fiscal year
    1998 through the Indian Health Service to improve our programs and
    services. Thank you very much.
                                     ______

       Prepared Statement of Frances G. Charles, Chairwoman, Lower Elwha
                                 Klallam Tribe

                                    summary
        Lower Elwha Klallam Tribal requests:
        Support the Administration's request for an additional $76.4
    million in Tribal Priority Allocations.
        Continuation of Elwha River Restoration funding through the Tribe's
    BIA Self Governance Annual Funding Agreement: from the Water Management
    and Development account or Water Rights Negotiation Litigation account.
        Support National Park Service funding of $25 million toward the dam
    acquisition cost pursuant to Elwha River Restoration, Public Law 102-
    495. And, authorization for $83.3 million to complete dam removal.
        $405,000 to implement initial phases of the Elwha chum salmon
    recovery program, as outlined in the Elwha River Restoration
    Environmental Impact Statement; and, $100,000 for salmon habitat
    improvements building upon the work begun in 1996.
        Increase in treaty shellfish implementation, management and
    enforcement, to $350,000 (as part of Point No Point Treaty Tribes'
    request for $1,400,000 for shellfish implementation).
        Full Contract Support (indirect cost) funding for BIA compact and
    IHS contract amounts for fiscal year 1998.
               lower elwha klallam tribe: elwha river restoration
        The Lower Elwha Klallam Tribe has been involved as one of the
    principal participants in examining the full restoration of the Elwha
    River through the removal of the Elwha and Glines Canyon Dams on the
    Olympic Peninsula in Washington State. Since 1989, the Tribe's
    involvement has been supported through the Bureau of Indian Affairs--
    usually through the Water Rights Negotiation/Litigation account.
    Funding for the Tribe's efforts has decreased from a steady funding
    level of $470,000. The fiscal year 1995 amount was reduced to $375,000
    and in fiscal year 1996 the grant to the Tribe was only $94,000. The
    Tribe requests the assistance of the Committee in restoring the funding
    for the Lower Elwha Klallam Tribe. Since the 104th Congress amended the
    Elwha Act to include the State of Washington in the process, the Tribe
    is facing brand new challenges with regard to treaty rights protection.
        The Administration has requested $25 million for acquisition of the
    dams. The Tribe requests $405,000 for the initial phases of the chum
    salmon recovery program, including enhancement of the tribal hatchery
    to achieve the production of the fish needed to restore the fisheries.
    The Tribe also supports the Administration's request for authorization
    of $83.3 million in additional funds toward the removal of the dams.
                               fisheries program
        The specific needs in the fisheries services program are: Shellfish
    implementation, management and enforcement funding increase to
    $1,400,000 for the Point No Point Treaty Tribes ($350,000 for each of
    the four Tribes).
        Continuation of Jobs for the Environment program. The Tribe has
    done restoration work on the Little Hoko River in which several miles
    of river were rehabilitated and are once again suitable for salmon
    spawning. This project has provided three years of employment for five
    displaced timber workers, both Tribal and non-Indian.
        Support continued funding for US/Canada Pacific salmon negotiations
    to resolve the current impasse in the development of fishing
    regulations, as well as to continue management of fisheries under US/
    Canada jurisdiction.
        Continuation of Wild Stock Initiative funds for the Tribes and
    State of Washington.
                             indian health service
        The Administration has requested a small increase from clinical
    services and contract support. We ask the Committee to support these
    requests: they are funds which go directly to the tribes for health
    care delivery.
                                     ______

      Prepared Statement of the Sault Ste. Marie Tribe of Chippewa Indians
        Mr. Chairman and members of the Committee. On behalf of the Sault
    Ste. Marie Tribe of Chippewa Indians, I want to thank you for this
    opportunity to appear before you to discuss our fiscal year 1998
    appropriations concerns.
        The Sault Ste. Marie Tribe of Chippewa Indians is the largest
    federally recognized tribe in Michigan. The Tribe is dedicated to
    achieving true self-determination and self-governance. Over the past
    few years we have opened schools, built health centers, established a
    tribal court system and worked to restore and enhance our economy and
    our land base. While much has been done, considerably more is needed to
    enable us to fulfill the promise of the self-determination policy. We
    urge this Committee and Congress to reaffirm its commitment to
    providing funding sufficient to enable tribes to maintain basic core
    services funded through the BIA and IHS.
                             indian health service
        One key to a brighter tribal future is ensuring that adequate
    health care services are provided to our people. Along these lines, we
    strongly urge the Committee, at a minimum, to support the
    Administration's request for funding levels for all IHS programs. In
    particular, we stress that many health care services for our people
    must be provided through contract health care--a program that has been
    chronically and severely underfunded. In this time of growing Indian
    populations and rising health care needs and costs, it is vitally
    important to provide a significant increase in funding for contract
    health services.
        The Tribe is a strong supporter of Self-Governance. We firmly
    believe that the best way to provide governmental services is to
    administer programs at the tribal level--tailored to the needs of our
    people. We entered a Self-Governance compact with the Indian Health
    Service on October 14, 1994, to maximize our ability to manage our own
    health care delivery systems and programs. While we see Self-Governance
    as the proper federal policy for government to government relations
    between the United States and our Tribe, we also have experienced some
    frustrations regarding how IHS implements Self-Governance. For example,
    while we have been an IHS Self-Governance Tribe for well over two
    years, we have not yet received any contract support costs regarding
    the administration of our tribal shares. These are funds which were
    negotiated as part of our annual funding agreement. They are critical
    to the success of Self-Governance. But the IHS continues to indicate
    that it does not have the funds to pay these key contract support
    costs.
        We also have found that another key promise of Self-Governance--the
    reduction of the federal bureaucracy and the transfer of resources to
    the tribes--has been painfully slow to take place. We urge the
    Committee to take additional steps to assure that Self-Governance leads
    to appropriate downsizing of the IHS, and a corresponding increase in
    the transfer of those savings to the tribes.
                            bureau of indian affairs
        The programs funded by Tribal Priority Allocations within the BIA
    are at the heart and soul of tribal governments. They include police
    protection, education, social services, tribal courts and other
    government functions necessary to protect the well being of our people.
    TPA is vitally important to Indian people and communities--and cuts in
    TPA would have devastating impacts on crime, education and tribal
    justice systems. We urge the Committee to increase funding for TPA,
    supporting at least the Administration's modest requested increase.
        The Sault Ste. Marie Tribe has recently entered into a Self-
    Governance compact with the BIA. Here again, we are concerned that full
    funding for Self-Governance is not being provided. With respect to the
    BIA, no Central Office tribal shares are being made available, as was
    required by language included in this year's Appropriations Act. We ask
    the Committee to revisit this issue, and to require that BIA Self-
    Governance compacts include Central Office tribal shares.
                         office of the special trustee
        The Office of the Special Trustee for American Indians was
    established by Congress to examine the longstanding and well documented
    mismanagement of trust assets by the BIA, and to recommend the reforms
    needed to correct these broad ranging problems. The Special Trustee has
    recently issued a draft ``Strategic Plan'' outlining his
    recommendations in this regard. Among other things, the Special Trustee
    calls for the consolidation of trust resource management, trust funds
    management and land title and records management in a new agency--the
    American Indian Trust and Development Administration. The thrust of the
    proposal is that the United States must dramatically change the manner
    in which it manages its trust responsibility to American Indians, and
    that the regulatory standards and best practices of private sector bank
    trust departments must be incorporated into the federal management of
    Indian trust assets.
        The work of the Special Trustee is long overdue. For too long, the
    mismanagement of trust assets by the BIA has been well documented--but
    no comprehensive solutions were advanced. Now, the Special Trustee is
    proposing a major overhaul of this key area. The proposal of the
    Special Trustee has significant implications for the future of federal/
    tribal relations and the trust responsibility. Accordingly, it is
    vitally important that the work of the Special Trustee be fully
    funded--both to enable his work to advance, and to provide an
    appropriate level of guidance and consultation from the Tribes. We urge
    the Committee to concur with the Administration's recommendation of
    providing $37.5 million (a $5 million increase) for the Office of the
    Special Trustee. We must not repeat the mistakes of history by failing
    to provide the resources necessary for the government to fulfill its
    responsibilities regarding the management of Indian trust assets.
                               policy initiatives
        The trust responsibility--as well as elementary notions of
    fairness--require that tribes have an opportunity to express their
    views to Congress before any significant changes in federal Indian
    policy are undertaken. Nevertheless, over the last couple of years
    there have been a number of major legislative initiatives that, if
    enacted, would have had a major impact on Indian tribes and their
    members--but which were advanced in a manner that limited tribal
    participation in the process. These included provisions to waive tribal
    immunity from suit, to prohibit land from being taken into trust
    without a tribal-state tax agreement, to prohibit new gaming compacts
    and prevent the Secretary of the Interior from issuing gaming
    procedures, and to reformulate the manner in which the BIA provides
    funding to tribes, among others. These were advanced within the context
    of the appropriations process--as riders to the Interior appropriations
    bill--without any hearings from the Committees with jurisdiction over
    Indian affairs, and without any prior opportunity for tribes to have
    input in the process.
        We urge the Committee to resist any such efforts this year, and in
    the future. Congress must not enact legislation that fundamentally
    alters the rights of tribes, without at least hearing from the tribes
    themselves. If there is a view that changes in Indian policy are
    needed, let them be considered and debated through the normal
    legislative process, in the light of day, with the full participation
    of the tribes. The appropriations process is simply not a proper
    vehicle for overhauling key elements of the relationship between the
    United States and the tribes.
                                   conclusion
        We thank you for this opportunity to address the Committee on
    behalf of the Sault Ste. Marie Tribe of Chippewa Indians.
                                     ______

    Prepared Statement of the Assiniboine and Sioux Tribes of the Fort Peck
                               Indian Reservation

        Mr. Chairman and members of the Committee, I am Caleb Shields,
    Chairman of the Assiniboine and Sioux Tribes of the Fort Peck Indian
    Reservation, in Montana. It is an honor to appear before you today to
    present the Tribes' fiscal year 1998 appropriations testimony. While
    our concerns are many, we would like to focus on certain areas
    regarding BIA and INS appropriations. We attach a list describing all
    of our needs in the BIA and IHS.
                          tribal priority allocations
        The Tribal Priority Allocations system is intended to give tribes
    an additional measure of flexibility in determining how to use
    available funds to best meet local needs. The Administration has
    requested an increase of $46 million for programs under TPA. This
    request would essentially restore overall funding for TPA to fiscal
    year 1995 levels. While we support this restoration it would still fall
    far short of allowing the Fort Peck Tribes to meet the needs of our
    people in key areas including law enforcement, education, welfare
    assistance and housing. We urge the Committee to do all it can to
    increase TPA above the level requested by the President.
    Law enforcement
        The President's budget requests $79 million for BIA/tribal law
    enforcement nationwide. This is an $8.2 million increase over last
    year's level, but is about $1 million less than was provided in fiscal
    year 1995. This modest funding must meet the needs of 200 Indian
    Reservations with 198 BIA and tribal law enforcement agencies covering
    approximately 100,000 square miles. At Fort Peck alone, we have a $1.3
    million shortfall in our law enforcement department. Our Reservation
    covers 6,000 square miles. We have a population of 13,000 living on the
    Reservation. We only have a police force of 18. We need a minimum of 25
    police of fleers to safely patrol the Reservation. Although our of
    ricers are well trained and dedicated, there are simply not enough of
    them to meet the day to day law enforcement needs of my community.
        In addition, our law enforcement department is in desperate need of
    equipment. We have only 8 aging police cars, to patrol the entire
    Reservation. Our Department also needs additional criminal equipment
    such as car radios, bulletproof vests, roll bars and protective
    shields. Several recent incidents of violent crime have plagued our
    Reservation. The community is currently working to understand the
    causes of these crimes and to develop mechanisms to lessen the risk of
    such crimes in the future. While there will undoubtedly be many parts
    to any solution, it is clear that one fundamental component is a strong
    police presence. This will send a strong message that violent crimes
    will not go unpunished in our community. It is critical that this
    Committee endorse the Administration's full request for law
    enforcement.
    Education
        The President's budget requests $30 million for scholarships for
    Indian students to accredited post-secondary schools, an increase of $3
    million. We support this request. Encouraging our people to take the
    step to attend post secondary school is one of the Tribes' top
    priorities. Attending college--particularly for those individuals from
    families that have not previously sent anyone to college--takes courage
    and often considerable personal sacrifice. We believe it is our
    responsibility to support the efforts of our people to attend college.
    Unfortunately, current funding provides scholarships to only 60 percent
    of the people who applied for assistance. This means that 40 percent of
    our eligible people who wish to further their education are shut out.
    This is tragic, as it diminishes the number of educated Tribal members
    who would return to our communities to work with our youth, our elders
    and otherwise enhance the well-being of the Tribes.
    Welfare assistance
        We strongly support the Administration's requested increase for
    welfare assistance. However, this request is still $7 million less than
    what was provided for this program in fiscal year 1995. Since 1995, the
    caseload for assistance under this program has increased substantially.
    The BIA and the tribes expect the caseloads to rise significantly,
    particularly during the initial stages of the implementation of the
    welfare reform law. As Indians are denied assistance under state plans,
    they will increasingly turn to the tribes.
        In communities like mine with an unemployment rates as high as 59
    percent, welfare assistance ensures that at least some of our people
    will not go without the most basic needs in life. Currently, we need an
    additional $600,000 for welfare assistance. Because of the significant
    shortfall, we can provide assistance to only 66 percent of the people
    who apply. The other 34 percent must do without. The Administration's
    requested increase will not even meet the existing needs for this
    program, let alone the expected increases. While we support the
    increase as a minimum, we urge this Committee to restore funding to
    this critical program to at least the fiscal year 1995 level.
        The Fort Peck Tribes are very concerned that the Administration has
    failed to request any money for programs under the Indian Child
    Protection and Family Violence Prevention Act. The Administration
    budget includes a new funding line item, but that tiny step does not
    provide any services to prevent child abuse, or help its victims. I
    cannot accept the Administration's statement that neither the BIA nor
    the entire Department of the Interior could ``secure resources to begin
    operation of these programs.'' These programs should be a priority for
    all of us who choose to work for the people of our communities and the
    Nation. Congress recognized the significance of this problem when it
    enacted the Act. This Act must be funded. I urge this Committee to
    provide $10 million to begin the operation of these programs.
                            tribal school ($102,200)
        In the fall of 1995, the Fort Peck Tribes authorized the operation
    of the Fort Peck Tribal School, an alternative school to meet the
    educational needs of our children who have problems that prevented them
    from continuing in the public schools. The Fort Peck Tribes realized
    that unless we stepped in and took on the responsibility to educate
    these children, they would not be able to complete their education and
    would likely be lost to us forever. The Tribes were able to open the
    tribal school with a small grant from the Walmart Corporation and in
    kind contributions by the Tribal College and our parents. The school
    now has an enrollment of fourteen children. These are children who were
    expelled from public school for behavioral or other reasons and had no
    hope of completing their public education. Because of a lack of space
    and personnel, we have had to turn away ten additional children. We are
    now asking this Committee for $102,200 to continue this important
    initiative.
        The school provides a full day of instruction. Academic classes
    include instruction not only in math, biology, and history, but also in
    the languages of my people. We are proud of our children in this school
    and the progress that they have made in improving their lives. We
    understand that there is a freeze on adding schools to the BIA system,
    but if we do not try to address the needs of these at risk children
    through education programs, we will almost certainly be forced to meet
    their needs through our juvenile justice programs, our substance abuse
    programs and our welfare programs. Our innovative approach to
    alternative education must be explored and rewarded. I am confident
    that it will prove to be an investment that not only helps students,
    but saves the government money in the long run.
                 detention facility renovations ($2.4 million)
        In June 1995, the BIA completed a needs assessment of the Fort Peck
    Detention Facility, the only adult detention facility on our
    Reservation. The needs assessment found that the facility was in need
    of several repairs to address structural deficiencies that would result
    in violations of both building codes and BIA standards for detention
    facilities. As the report makes clear, the facility needs additional
    inmate housing. It also needs new fire alarms and monitoring systems
    and a new intake/booking area with holding cells. The estimated cost of
    these items is $2.4 million dollars. We request this Committee to
    include this amount in the BIA's construction budget.
                                tribal colleges
        We support the Administration's $30 million request for tribal
    colleges. This request is consistent with the President's Executive
    Order on Tribal Colleges, which supported enhancing federal support to
    tribal colleges and universities nationwide. The twenty-four tribal
    colleges are important institutions to remote tribal communities. On
    the Fort Peck Reservation, we operate the Fort Peck Tribal College, a
    fully accredited institution, offering Associate Degrees in arts,
    science and applied sciences. We also offer a vocational certificate
    for our students. We have a current enrollment of 366 students. Last
    year twenty-eight of our students graduated. Of these twenty-eight who
    graduated, 7 went on to continue their education in a four-year
    institution.
                                 indian health
        We strongly support the Administration's requested increase for
    contract health care, which provides valuable assistance on
    Reservations like mine where there is no IHS hospital. On the Fort Peck
    Reservation, we have a shortfall of $1.1 million in contract health
    care. The Administration's request of $374 million for contract health
    care will certainly not enable us to meet all of the health care needs
    of our people, but it will allow us to provide services to additional
    people. We urge the Committee to provide additional funds for contract
    health care.
                                     ______

    Prepared Statement of Tom Maulson, Tribal Chairman, Lac du Fambeau Band
                       of Lake superior Chippewa Indians

        Mr. Chairman and members of the Committee. My name is Tom Maulson
    and I am the Tribal Chairman of the Lac du Flambeau Band of Lake
    Superior Chippewa Indians, located in Wisconsin. I am here to testify
    on behalf of my people, to discuss their issues, concerns and needs.
        The message from my people is that the United States must keep its
    obligations to the Lac du Flambeau Band. The United States is obligated
    by Treaty to provide critically needed social, education, health and
    governmental services to the Band and its members in exchange for the
    land and peace provided by our forefathers. This is the heart of the
    federal government's trust responsibility to the Band. And, this trust
    responsibility is very much on the minds of my people--who know how
    much we gave up in exchange for the promises of the federal government.
    We urge you to keep this in mind as well, as you consider funding for
    Indian programs.
        I turn now to some specific funding issues arising out of the
    President's fiscal year 1998 Budget.
                                  health care
        Health care on the reservation remains a major concern of our
    tribal members. Currently, the IHS Budget for our service unit funds
    only about 60 percent of the Band's need for health care services. The
    overall IHS Budget of $2.12 billion must serve a rapidly expanding
    Indian population, now in excess of 2 million people, in a time of
    rising health care costs. The impact of the shortfalls is seen most
    dramatically at the Reservation level. At Lac du Flambeau, most of the
    health care for our people is provided through the IHS contract health
    care system. Funding for contract health care meets less than half of
    our need. We are forced to undertake a terrible rationing of health
    care--addressing only emergencies. If a child requires an MRI or CT
    scan, we cannot provide these services--unless a life is in imminent
    danger. We cannot provide eyeglasses or hearing aids for our elderly.
    In many ways, current funding levels are leaving our people without
    funds for health care which, by any humane view, should be provided. We
    urge the Committee to provide an increase of 10 percent (about $36
    million) for contract health services to enable tribes to provide an
    appropriate and decent range of health care services to our people.
                                indian education
        I was glad to note that the President has set education as one of
    his fundamental priorities. I urge the Committee, and Congress, to join
    with the President in providing the resources and programs necessary to
    improve the educational opportunities throughout the United States. At
    the same time, I urge the Committee to work with the tribes to find
    ways to target the particular educational needs that arise in Indian
    country.
        For example, the BIA Higher Education Program provides desperately
    needed scholarship funds to tribal members. But, while we strongly
    support this program, it does not meet a critical need of many of our
    members--payment for child care and transportation expenses to enable
    them to attend college.
        We currently have 41 students participating the Higher Education
    Program. Most of these are older students, who have families and did
    not pursue higher education immediately after high school. The average
    age of these students is 29. Our Reservation is in a remote area of
    northern Wisconsin, with the nearest 4 year college located 90 miles
    away. Transportation to and from school is a major burden for many.
    Likewise, child care is very expensive in our area. In many cases, the
    costs of transportation and child care create insurmountable barriers
    for qualified students who wish to remain in school. Currently, most
    financial aid programs, including those for individuals with very low
    incomes, do not cover child care and transportation costs. The Band
    urges the Committee to provide funding for needed child care and
    transportation within the BIA Higher Education Program--to enable more
    of our students to be able to stay in school and pursue their dreams.
                               natural resources
        The natural resources of the Lac du Flambeau Band are our most
    valuable and significant asset--apart from our children. Our natural
    resources provide my people with cultural, spiritual, subsistence,
    social and economic opportunities. The Reservation is located in the
    heart of Wisconsin's tourism and sportfishing region. Tourism and
    related industries provide livelihoods for Indians and non-Indians
    alike. The land, the water, the air and all the animals and plants that
    live along with us on this Reservation, help make us what we are as a
    people. We need funding to assure that we can fulfill our
    responsibilities to keep these resources clean and available for the
    generations to come.
        The Lac du Flambeau Band has developed considerable expertise in
    the management of our natural resources. We have a fish hatchery that
    is a central element of our overall natural resources program. Our
    activities also include conservation law enforcement, development of
    tribal management codes, fish population studies and habitat
    improvement. Unfortunately, there are growing stresses on our natural
    resources from increased local development. We have a dedicated staff
    of 20 in our Natural Resources Department. But funding for our staff
    and these critical programs has not increased since 1990, a period
    which saw our costs escalate rapidly. Unless there is an increase in
    funds, we will either have to reduce services, or lose some of our
    qualified staff. We urge the Committee to increase our Tribal
    Management and Development funds by $125,000 to enable us to maintain
    our critical natural resource programs.
        We strongly support full funding for the Circle of Flight program
    (also known as the Wetlands and Waterfowl Management program). This
    program addresses the critical problem of the decreasing number of
    waterfowl and the deterioration of our wetlands. The program emphasizes
    locally developed tribal programs, involving wetlands restoration,
    refuge creation, waterfowl nesting site development and others. Under
    this program, tribes are contributing needed wetlands and some of the
    best waterfowl areas in the Nation. We urge the Committee to provide a
    total of $1 million (an increase of about $400,000) to promote worthy
    Circle of Flight programs.
        The Band is responsible for managing 55,000 acres of forest land on
    our Reservation. We must handle broad needs including tree planting,
    prescribed burning, timber road design and maintenance, timber sale
    administration, and integration with wildlife management. In addition,
    our Forestry program is responsible for cultural resource surveys under
    section 106 of the National Historic Preservation Act, although we
    receive no funds for that labor intensive and important responsibility.
    We request an additional $40,000 to enable our Forestry program to
    undertake the necessary activities in managing our forest lands.
                                law enforcement
        Police protection is a major government function in every
    community. At Lac du Flambeau, our tribal police have cross-
    deputization responsibilities--which require that they obtain a full
    measure of federal and state law enforcement training and
    certification. Moreover, because the local Vilas County Sheriff's
    Department in our area has reduced patrols on the Reservation,
    increased law enforcement presence by the Band is necessary. To provide
    the required services, we need 10 law enforcement officers. We need an
    additional $224,000 to assure the safety of residents of our
    communities.
                          tribal priority allocations
        At Lac du Flambeau, our education, law enforcement, forestry and
    other key programs are included within Tribal Priority Allocations. The
    TPA system allows the Band to move funds from one TPA program to
    another, in line with the priorities set by the Band. But, particularly
    for the last two years, TPA programs have been insufficiently funded
    across the board, and have not met the needs of the tribes. This has
    forced tribes to ``rob Peter to pay Paul''--even though neither Peter
    nor Paul had enough in the first place. For fiscal year 1998, the
    President has called for an increase of $53.3 million. While this is a
    good start, it falls short of the actual needs in Indian country. We
    urge the Committee to increase TPA by an additional $50 million, above
    the Administration's request.
        Thank you.
                                     ______

      Prepared Statement of the Fond du Lac Band of Lake Superior Chippewa

        Mr. Chairman, Members of the Committee, the Fond du Lac Band of
    Lake Superior Chippewa would like to thank you for this opportunity to
    present our testimony on fiscal year 1998 appropriations for the
    Department of Interior and Related Agencies. We urge the Committee's
    continued support for tribal programs, which are so important to the
    lives of our people. In particular, we seek your support for our
    natural resources and forestry initiatives, which are essential to
    protect the resources on which our people depend. We also seek your
    support for our Fond du Lac Ojibwe School which is needed to provide a
    safe setting in which we can educate our children.
        The Fond du Lac Reservation is one of six Chippewa Bands in the
    Minnesota Chippewa Tribe. The Reservation was established by Treaty
    with the United States on September 30, 1854. The Reservation
    encompasses approximately 100,000 acres. There are currently about
    3,350 members of the Fond du Lac Band.
        Our message to the Committee is this: There continues to be
    substantial unmet needs in health, education, and the protection/
    management of our natural resources. Any reductions in funding, no
    matter how small, for Indian programs would have severe, adverse
    impacts on our people. While the BIA may not be as efficient or
    accountable as it should be, that is no reason to reduce federal
    funding in ways that will harm Indian people. The relatively small
    amount of federal funds that actually reaches the Tribes and serves the
    needs of Indian people must be preserved.
        On-Reservation Needs.--The waters, wildlife, wild rice, and forest
    resources of our Reservation are vitally important to the members of
    the Band, as these resources provide the foundation of our culture,
    subsistence, employment, and recreation. The Fond du Lac Reservation
    includes some 3,200 acres of lakes, 1,900 acres of wild rice lakes and
    associated wetlands, 66 miles of cool water streams, and 17,500 acres
    of forest. Unfortunately, our resources are under great stress. The
    loss of wild rice lakes and wildlife habitat, and the decline of forest
    biodiversity are of great concern to the Band. Therefore, we are
    seeking an additional $240,000 for our natural resources and forestry
    program to enable us to address the challenges we face in this critical
    area. The main area of concern is the Aquatic Resource Protection and
    Restoration. It is imperative that we continue to protect these
    resources for the future generations on Fond du Lac by the
    implementation of anti-degradation monitoring program with emphasis on
    mitigation of contaminants.
        Likewise, it is essential that we provide proper management of our
    forests, to assure that those resources are properly managed and remain
    productive over time. Our original white pine forests were largely
    destroyed by uncontrolled cutting early in the century. We need to
    mange our remaining forests with selective cuts, extended rotations and
    smaller staged cuts, to conserve the resource. Our goals are to
    increase our harvest from 130 acres to 350 acres per year, to enhance
    the forest wildlife habitat [particularly for game species], and to
    increase biodiversity. We will accomplish these objectives through our
    Integrated Resource Management Plan, with the cooperation of state,
    county, and private forest and wildlife managers. We also feel it is
    important to support the funding of the BIA's Forest Development, and
    Inventory and Management Planning add-on funds.
        A third component of our natural resources initiative involves our
    waterfowl and related wetlands resources. The Band has been a
    participant in the ``Circle of Flight'' program, by which a number of
    tribes have had a high level of success with local initiatives in
    wetlands and waterfowl habitat restoration. We urge the Committee's
    continued support for this critical program.
        Ceded Territory Needs.--The Fond du Lac Band has had its rights re-
    affirmed in the 1837 Ceded Territory. This means the Band is
    responsible for an approximate 3,000,000 acres of land and must
    implement a system similar to the one used in the 1854 ceded territory
    to protect the exercise of treaty reserved rights. We are seeking an
    additional $186,551 to be added to the Bureau of Indian Affairs base
    budget and earmarked for Fond du Lac and the 1837 ceded territory. We
    also ask that you to support the joint request of the 1854 Authority
    and Fond du Lac to increase the base budget of the 1854 Authority by an
    additional $255,507. This request is important to continue the
    enforcement, monitoring and assessment activities in the 1854 Ceded
    Territory.
        Fond du Lac Ojibwe School.--Our top priority is education. Our
    greatest concern in this area is that our children are currently forced
    to attend a school that is unsafe. Four years ago a BIA report examined
    our existing grant school, and concluded that ``The building poses a
    clear and immediate danger to its occupants. Any attempt to continue to
    use this facility on other than a short-term, interim basis, is
    imprudent.'' 1992 BIA Construction Validation Report. As this
    conclusion reflects, our current school, which serves students from
    kindergarten through 12th grade, is in a decrepit and unsafe condition.
    The building does not meet building codes or BIA space guidelines. We
    are concerned that the physical plant of our school leaves our children
    in serious jeopardy, and places them at a significant disadvantage in
    terms of education opportunity. Children can not be properly educated
    in an inadequate and deteriorating school.
        In 1992, the Fond du Lac Reservation submitted an application to
    the Bureau of Indian Affairs for New School Construction. Following an
    October 1992 Construction Validation Study, the Fond du Lac Ojibwe
    School was ranked 14 on the ``Education Facilities Construction
    Priority List of fiscal year 1993.'' In 1996, Fond du Lac received a
    Public Law 100-297 Grant in the amount of $578,989 for the planning and
    design phase of the school project. Planning and Design will be
    completed by July 1, 1997. It would be expedient if construction
    funding were appropriated at this time rather than fiscal year 2000 or
    later as the BIA has projected.
        We urge the Committee to provide additional funding in the amount
    of $12 million for a new school on the Fond du Lac Reservation.
        Additional Education Program Needs.--The Band strongly supports the
    Administration's request for Indian Education programs including: $296
    million for the Indian School Equalization Program (ISEP); $34 million
    for Student Transportation; $74 million for Facilities Operation and
    Maintenance; $44 million for Administrative Cost Grants; and $5.4
    million for Early Childhood Development. Funding should also be
    continued for flow through programs serving tribes including: Title I;
    Individuals with Disabilities Act (IDEA); Substance Abuse and Title IX.
    We are however very concerned that the Administration has requested
    only $17.2 million for the Johnson-O'Malley program. This is a $1
    million cut from last year's level. A number of our youth go to public
    schools and the Johnson-O'Malley program is critical to their success
    in the public school system. I urge this Committee to reject this cut.
        We support the Administration's $30 million request for tribally
    controlled Community Colleges. However, it is clear that this amount of
    funding is not sufficient to meet the growing need of tribal colleges.
    The Fond du Lac Tribal and Community College is unique in the United
    States as it is jointly a tribal college and a member of the Arrowhead
    Community College Region in Minnesota. Continued financial support for
    American Indian students and educational programs at this Tribal
    College is vitally important. Tribal Colleges provide an important and
    unique educational opportunity for many of our students. These
    institutions must be strongly supported.
                                   conclusion
        The needs at Fond du Lac and on other Reservations throughout the
    country remain massive. We appreciate the Committee's consideration of
    our appropriations request and we urge the Committee to do all it can
    to preserve funding for Indian programs.

    Attachment.
                                     ______

      Supplemental Information on Fond du Lac Ojibwe School Construction
                                    Proposal

        The Fond du Lac Band of Lake Superior Chippewa proposes to
    construct and equip a new facility for its tribally-controlled school,
    the Ojibwe School, in order to replace its present, run-down facility.
        The existing Ojibwe School is a grant school under the Tribally
    Controlled Schools Act of 1988 (Public Law 100-297, Title V, Part B.;
    the ``Tribally Controlled Schools Act'') serving approximately 210
    children in grades K-12. The facility is old and decrepit. It utilizes
    four temporary portable buildings to house its Middle School (Grades 6-
    8) and library. It is not large enough to handle existing enrollment.
    The facility is in violation both of applicable building codes and BIA
    space guidelines. The 1992 BIA Construction Validation Report stated
    that, ``The building poses a clear and immediate danger to its
    occupants. To not replace the facility could be construed as negligence
    in the even a fire occurred. Any attempt to continue to use this
    facility on other than a short-term interim basis, is imprudent.''
        Notwithstanding these facility handicaps, the school has been able
    to provide high quality education to the students it is able to admit.
    The Fond du Lac Community, School Board, Reservation Business
    Committee, Education Administration and Staff have continually sought
    to improve Indian Education since the inception of the Ojibwe School.
    The involvement of the community has been instrumental to the existence
    of the school. With the help of tribal, state and federal programs, the
    Ojibwe School has evolved into a leader in tribal education. The school
    has been in operation since 1980 with a current annual operating budget
    of $3.3 million.
        The school operates as a pre-K-12 optional school by North Central
    Association (NCA) of Accreditation. As an accredited school, the
    program is required to satisfy all the components established by the
    NCA. In 1996, the Ojibwe School was second-warned for violation of
    Standard XII, School Facilities. A school may be dropped from NCA
    membership if steps are not taken to correct the cause for warning. In
    the meantime, serious health and safety problems, outlined by annual
    BIA and Indian Health Service surveys, continue at the Fond du Lac
    Ojibwe School.
                                   new school
        The new 90,000 square foot school proposed by Fond du Lac, to be
    built at an estimated cost of $12 million, would serve approximately
    365 students in grades K-12. It would be built on the Reservation, near
    the existing school in accordance with BIA educational space
    guidelines, North Central Accreditation Standards and educational space
    recommendations of the Minnesota Department of Education.
                                     ______

    Prepared Statement of John Wilmer, Sr., Chairman, the Bad River Band of
                         Lake Superior Chippewa Indians

        Mr. Chairman and members of the Committee. I am John Wilmer, Sr.,
    Chairman of the Bad River Band of Lake Superior Chippewa Indians, of
    Wisconsin. I appreciate this opportunity to provide the Committee with
    the Band's testimony on fiscal year 1998 appropriations.
                                  health care
        A. Contract health services.--The need for health care services has
    risen dramatically at Bad River--with our user population increasing
    from about 1100 in 1991 to about 2500 today. But funding has failed to
    keep pace. The shortfall is particularly critical with respect to
    contract health services--which is the major source of funding for most
    of our health care needs. As a result of funding limitations, contract
    care must be limited to emergency care only. (We urge the Committee to
    increase funding for contract health care.)
        B. Dental services.--Our dental program is able to pay only for
    emergency dental work for adults. With a current budget of $104,000 our
    dental program has a list of 221 adults waiting for dental services,
    for which no funds are available. Of these, 33 are elders. Often, the
    inability to obtain needed dental work for elders makes it difficult
    for them to eat--which in turn leads to further medical problems. We
    need an additional $200,000 to provide services to those now waiting
    for needed dental care.
        C. Diabetes.--As the Committee is well aware, diabetes is a major
    problem in Indian Country. At Bad River, we have 215 diabetes patients.
    Among these patients, we have witnessed a tragic increase in the number
    of amputations in the past year. To help address this, our diabetes
    patients need education and counseling on a range of nutrition issues.
    We request $50,000 for nutrition services for our diabetes patients. In
    addition, our diabetes patients need preventative and acute foot care.
    We seek $18,000 to contract with a podiatrist to promote healthy foot
    care among our diabetes patients.
                                   education
        A. Johnson-O'Malley program.--A key to the success of many of our
    students in the public school system is the Johnson-O'Malley program.
    Our JOM program provides needed counseling and support services--and
    study skills training--to about 475 students. There is no question that
    the personal attention provided by JOM staff has helped innumerable
    students complete high school and go on to higher education. But, over
    the past four years, funding for our JOM program has been seriously
    cut, diminishing our ability to provide the level of personal care that
    our students need and deserve. This year, the President is proposing to
    cut JOM again--this time by $1.1 million. We urge Congress to reject
    such a cut, and restore full funding for the JOM program.
        B. Mashkisibi School.--Over the years, we have learned at Bad River
    that not all of our students thrive in a typical public school
    environment. Some students--particularly those with a history of
    difficulties in the public schools as a result of emotional or other
    problems--need an alternative environment. At Bad River, we have taken
    the initiative to address the needs of these children--by establishing
    the Mashkisibi School, an alternative school for grades 9-12. The
    School, established in 1995, serves 12 to 15 students each year. These
    are students who would drop out if public school was their only option.
    The Mashkisibi School seeks to engage these students by integrating
    Ojibway language and culture into all aspects of the curriculum, and by
    focusing on the practical impact of all areas of learning. The School
    also provides a higher teacher/student ratio than the public schools,
    and seeks to provide a more personalized approach to learning. The
    School has demonstrated considerable success, keeping these children in
    school, and helping them to thrive.
        We have had no federal funds supporting this worthwhile endeavor.
    While we have been able to begin the School on a shoestring, to be able
    to survive in the long term, we will need federal support. To operate
    the school--providing salary to our fine staff--we need $82,000 for
    fiscal year 1998. And, to have a proper facility for our School, we
    need $200,000. We recognize that there is currently a moratorium on new
    BIA funded schools. But, in this case, where the Band has stepped in to
    educate a segment of the student population that was not otherwise
    receiving the services needed to keep them in school, an exception
    should be made.
                               natural resources
        Our natural resources are key to our cultural and economic survival
    as a people. Wild rice, deer and walleye are central to our lives, and
    subsistence use of these resources is widespread and increasing. The
    population on our Reservation has grown sharply over the past few
    years, as our members return from urban areas. Unfortunately,
    employment has not kept pace. With greater numbers of tribal members
    and too few jobs on the Reservation, more stress is placed on our
    finite natural resources. Proper management and enforcement efforts are
    more critical than ever to preserve the integrity of our Treaty rights
    and resources for members of the Band.
        In 1995, the Band entered a cooperative agreement with the State of
    Wisconsin regarding subsistence and commercial fishing in Lake
    Superior. This agreement enhanced the practical opportunities for
    tribal members to exercise their Treaty rights in Lake Superior. At the
    same time, it has increased the Band's regulatory and monitoring
    responsibilities. Among other things, the Band is required to perform
    on-board monitoring and patrol activities. This requires the allocation
    of trained staff. Beyond the increased costs involved in these
    cooperative activities on Lake Superior, our overall fish and game
    program costs (cost of living, insurance, equipment, fuel, supplies,
    etc.) have been spiraling. We request an additional $50,000 to enable
    us to meet our responsibilities under the Tribal-State agreement and to
    protect our resources for future generations.
        We also support full funding for the Circle of Flight program and
    BIA Fish Hatchery Maintenance, and the restoration of funding for BIA
    Fish Hatchery Rehabilitation.
                              indian child welfare
        Our Indian Child Welfare staff works with the victims of child
    abuse and neglect, and with families at risk of child abuse and
    neglect. They investigate incidents, provide on-call services for
    crisis situations, and serve as advocates for children in the court
    systems. They provide educational services to families to prevent abuse
    and neglect.The program is also involved in the placement of
        Indian children. The staff undertakes home studies for foster care
    and adoptive care placements. They seek Indian adoptive homes for
    Indian children--to assure continuity within our tribal community. And,
    they protect the interests of Indian children and the Tribe, by seeing
    that the terms of the Indian Child Welfare Act are met. All of these
    critically needed services are being provided with a staff of 3 and
    federal funds of a meager $55,000. We urge you to provide additional
    funds for Indian Child Welfare programs--to help us limit child abuse
    and neglect, and to find suitable Indian families for our Indian
    children.
                                white pine mine
        The people and resources of Bad River face a significant threat
    from a proposed mining project at White Pine, Michigan. This project
    would involve injecting massive quantities of sulfuric acid into a
    copper mine in an effort to leach copper from the rocks. In preparation
    for mining activities, railroad cars filled with sulfuric acid have
    repeatedly crossed our Reservation on their way to the mine. Both the
    mining, and the transportation of the sulfuric acid, present terrible
    risks to our Reservation and our tribal members. Among other things, a
    spill of sulfuric acid would be a major catastrophe.
        Unfortunately, the proposal to undertake this mining is advancing
    rapidly. The owner of the mine, Copper Range Company, is seeking a
    permit from EPA to begin the solution mining activities. It is also
    seeking a permit to construct a smelter adjacent to the mine. And, EPA
    is currently undertaking an environmental analysis (EAn) to examine a
    broad range of issues associated with the proposed mine and related
    transportation.
        The Band needs resources to enable it to adequately participate in
    the permitting and EAn processes--to address the potential adverse
    impact of the mine and transportation activities on the Band, its
    resources and its members. We need expertise in the following areas (1)
    a transportation engineer, to evaluate the risk of a spill, (2) a
    mining engineer, to study safety issues relating to the mining
    activities, (3) an hydrologist, to study the potential movement of
    fluids in the groundwater, (4) an environmental toxicologist, to
    determine the adverse impacts of a potential discharge on plants,
    animals and humans, (5) a geochemist, to examine the interaction of the
    sulfuric acid and rocks, to determine if containment is possible, and
    (6) an economist, to determine the feasibility of the proposal to pump
    and treat fluids in the mine site forever.
        The Band requests $200,000 from the BIA for a mining assessment
    program to enable us to obtain baseline data and analysis and to be
    full participants in the permitting and EAn process. This participation
    is vitally important to the future of the Band, as a wrong decision on
    this mining proposal could jeopardize the health of our people and the
    integrity of our Reservation homeland.
                                   conclusion
        We emphasize to the Committee that your work affects the lives of
    my people, and urge you to preserve adequate funding for Indian
    programs.
                                     ______

     Prepared Statement of Leonard Loretto, Governor of the Pueblo of Jemez

        Mr. Chairman and members of the Committee, I am Leonard Loretto,
    Governor of the Pueblo of Jemez in New Mexico. Thank you for the
    opportunity to testify before the Committee today concerning the Pueblo
    of Jemez.
               jemez irrigation project phase iii ($3.0 million)
        Farming is a fundamental part of the Pueblo's culture. We have
    grown corn and chili since prehistoric times. These products are not
    only a vital food source, but also necessary to our religious
    ceremonies. Our goal in this area is to maintain our culture and
    tradition and improve our economy by expanding our agricultural base.
        We need to complete the work on our irrigation system that is in
    the last phase of completion. We thank the Committee for its support
    for the first two phases. The first two phases have already resulted in
    a significant improvement in our farming capabilities due to the
    concrete lining of the main canals. This permits us to save water that
    was previously being lost through seepage. However, we still have more
    than 27 miles of lateral ditches that must be lined.
        As the Committee knows, the BIA priority list for theses types of
    projects results in only the large projects being funded. Last year,
    one irrigation project--the Navajo Irrigation Project--received more
    than $20 million in funding. While projects like Jemez's that is only
    one phase away from completion was left unfunded. We request the
    Committee to complete this work, by directing the BIA to provide enough
    money to complete Jemez's irrigation project. The benefits that this
    will produce for our People will be well worth the investment.
                      walatowa cultural center ($700,000)
        The Pueblo of Jemez wishes to enhance our tourism and outdoor
    recreation programs: (1) through the establishment of a Walatowa
    Cultural Center; and (2) by implementing the infrastructure required to
    accommodate outdoor enthusiasts who frequent the Holy Ghost and Dragon
    Fly fishing lakes. We are requesting $500,000 in support of
    construction of Phase 2, Walatowa Cultural Center, which is a 4,600
    square foot facility. We are further requesting and additional $200,000
    in support of infrastructure development for our fishing lakes.
        The establishment of the Walatowa Cultural Center for the Pueblo of
    Jemez will expand economic development potential through tourism by:
    (1) offering quality tourism attractions to the visiting public; (2)
    providing information which will facilitate a safe and enjoyable
    recreational learning experience; and (3) generating a higher
    expenditure per visitor, thus creating new revenue for the Pueblo. The
    establishment of the Cultural Center will support the preservation of
    tribal traditions, cultural values, arts and crafts and beliefs among
    new generations of Towa people.
                            bureau of indian affairs
    Tribal priority allocations
        We strongly support the President's request for Tribal Priority
    Allocations. TPA funds the core services of every tribal government. It
    includes funding for education, welfare, roads and tribal courts, which
    are necessary for any sovereign to prosper. While, we strongly support
    the President's budget request, we echo the Senate Committee on Indian
    Affairs' concern that the funding for Indian programs has steadily
    declined since 1978. Thus, tribes are continuously forced to do more
    with less.
    Social service funding ($126,000)
        In 1993, the Pueblo working with the Department of Justice
    developed a pilot project to address issues surrounding juvenile
    justice and delinquency. This project enabled the Tribe to work with
    its youth in a traditional counseling program. In addition, through the
    program we were able to assess the many factors that affect the life,
    styles and behaviors of our youth and develop solutions to the problems
    experienced by them.
        Since this program was initially only a three-year pilot project,
    DOJ did not renew the funding. When this project ended in 1996, the
    Pueblo was left without a specific program designated for youth. The
    Pueblo believes that this pilot program was a success and must be
    supported. We request an earmark of $126,000, to continue this valuable
    program. We are also concerned that while the BIA has created a line
    item for programs authorized under the Indian Child Protection and
    Family Violence Prevention Act, the BIA failed to request any funding
    for these programs. After several years, the BIA has finally completed
    the regulations for this Act. It is now time to fund the programs under
    this Act.
    Detention facility
        We are pleased that the Administration recognizes the critical need
    for additional detention facilities in Indian country. We support the
    requests for the Ute Mountain and Gila River facilities. Even with
    these two facilities going on line, there continues to be a tremendous
    need for detention facilities in Indian country. In the Albuquerque
    Area, there are 19 tribes, yet there is no tribal detention facility to
    serve the needs of these tribes. As a result, our law enforcement
    agencies must contract with non-Indian agencies at a significant cost.
    This cost is shared 50/50 between the tribes and the BIA. Thus,
    contracting is not only costly to the BIA, but to the tribes as well.
        We would like to know the cost of contracting with outside
    detention facilities. While we are not certain, we believe that
    building a new facility may, in fact, be a more cost effective way to
    meet the detention needs in Indian country. We believe it would be
    helpful if this Committee requested such a report from the BIA.
    Aboulselman case--water rights negotiation ($300,000)
        The Pueblo is a party in the United States v. Abousleman Stream
    Adjudication. This case, which involves the precious water resources of
    the arid Rio Jemez Basin, has been in litigation for well over ten
    years. Litigation is time-consuming, expensive and focuses on only
    reallocation of water supplies to parties to the litigation. The United
    States has already committed a water rights settlement negotiation team
    to help the Pueblo with these negotiations. To further the Pueblo's
    efforts in seeking a positive resolution of this matter the Pueblo is
    requesting an earmark of $300,000 from the BIA's Water Rights
    Negotiation Fund.
        In 1996, a tremendous amount of progress has taken place in the
    case. Specifically, because of the record drought this last summer,
    there was a call by the Pueblo and the United States to enforce senior
    priority rights. This forced the parties to the negotiation table. The
    Pueblos and the non-Indian irrigators negotiated an irrigation rotation
    schedule for the summer, which was approved and adopted by the federal
    court. This marked the first time in New Mexico history that the
    Pueblos and the non-Indian water users agreed to share the valuable
    water resource.
        Despite the tremendous progress that we have made in the Abousleman
    case the Bureau of Indian Affairs failed to provide any funding for the
    Pueblo to continue our work. Additional funding is essential to achieve
    the ultimate objective of a comprehensive negotiated water settlement
    in the basin. We request $300,000 be earmarked for the Pueblo to
    continue our work in the Abousleman case.
                             indian health service
    Support for continued research on asthma among Jemez Children
            ($100,000)
        A 1992 study by faculty from the University of New Mexico School of
    Medicine reported that the rate of acute asthma for children living
    within the Pueblo of Jemez is twice the national average. This is
    particularly alarming because it was previously thought that asthma was
    not a prevalent disease among Indian people. In 1996 the Pueblo of
    Jemez conducted baseline research on asthma and the relationship
    between our dependency on wood as a primary source of heating and
    cooking. Our preliminary research indicates that over 45 percent of
    households are significantly at risk to the effects of indoor air
    pollution. We request $100,000 to design and administer a comprehensive
    environmental health-epidemiological assessment to determine existing
    environmental factors which contribute to the known prevalence of
    asthma among Jemez tribal members, primarily focused on protection of
    our children and elderly.
    Emergency medical services
        We request an increase in the IHS appropriations to provide for two
    additional full time emergency medical technicians to be stationed at
    the Pueblo of Jemez. Currently, 2,566 motorists pass through the Pueblo
    on an average day. This amount doubles during the peak tourist season.
    We are 45-50 miles away from the nearest hospital our EMT service is
    crucial to saving lives that would otherwise be lost. However, we
    cannot now provide twenty-four-hour emergency medical technicians, to
    ensure the health and protection of our visitors.
        We have only two EMT's and eight volunteers, serving as First
    Responders. They cover 415 square miles, including more than 100 of
    miles of isolated roads and tourist sites. Consequently, the First
    Responders answer most night and weekend calls, as the two EMT's are
    unable to meet these needs. While these individuals have done an
    excellent job with limited resources, two additional EMT's would allow
    the Pueblo to provide comprehensive emergency services, through trained
    professionals twenty-four hours a day seven days a week.
                                     ______

     Prepared Statement of Ruby Atwine, Chair, Tribal Business Committee,
            the Ute Indian Tribe of the Uintah and Ouray Reservation

                                  introduction
        My name is Ruby Atwine. I am the Chair of the Tribal Business
    Committee of the Ute Indian Tribe of the Uintah and Ouray Reservation
    located in northeastern Utah. I am providing this written testimony in
    support of the Department of the Interior's proposed appropriation for
    the Ute Tribe's water settlement. The proposed appropriation of $41.5
    million is partial fulfillment of the obligations and promises made by
    the United States to the Ute Tribe in 1965 and reconfirmed by Congress
    in 1992. Those obligations and promises are set forth in the Ute Indian
    Rights Settlement, Title V of the Central Utah Project Completion Act,
    Public Law 102-575, 106 Stat. 4600, 4650 (Oct. 30, 1992). The purpose
    of the Settlement is, in part, to settle long-outstanding claims held
    by the Tribe relating to the failure to construct features of the
    Central Utah Project contemplated in the September 20, 1965 Agreement
    between the Tribe, the United States and the Central Utah Water
    Conservancy District. This particular appropriation is to partially
    fund the Tribal Development Fund provided for in section 506 of the
    Settlement.
        The Ute Indian Tribe is pleased with the opportunity to present its
    views to this distinguished Subcommittee. The Tribe looks forward to
    working with the members to implement the proposed appropriation, which
    will provide a critical step in completing the funding of the Tribe's
    Water Settlement; funding which is vital to the economic development of
    the Tribe and its members.
                              the ute indian tribe
        The Ute Indian Tribe is made-up of three bands, the Uintah,
    Whiteriver and Uncompahgre. The Reservation is made up of two separate
    reservations: the Uintah Valley Reserve established in 1861; and the
    Uncompahgre Reserve established in 1882. Together they encompass nearly
    4.5 million acres of Indian trust, fee and federal land. The Tribe
    holds approximately 1,000,000 acres of Reservation land in trust. The
    Duchesne River and its tributaries, Rock Creek, Lake Fork, Yellowstone,
    Uinta and Whiterocks Rivers are among the stream systems that pass
    south from the Uinta Mountains through the Reservation to the Green
    River and then on to the mainstem of the Colorado River.
        Approximately 3,300 tribal members live on the Reservation. They
    suffer from the highest unemployment rate in the entire Uintah Basin.
    While the Reservation is blessed with oil and gas resources, employment
    opportunities are limited. Other ``modern'' employment opportunities
    are proscribed by the lack of additional economic development. The
    Tribe and a few tribal members do engage in agricultural enterprises
    which provide only limited economic returns. Fish and wildlife
    resources are extremely important to the Tribe and could, if properly
    developed and managed, offer greater economic opportunities.
                        the ute indian rights settlement
        The Ute Indian Rights Settlement was passed by Congress and signed
    by the President in October, 1992. The facts surrounding this
    Settlement make it distinct from other Indian water settlements. The
    United States had a contractual obligation to the Tribe which it failed
    to fulfill. The Settlement represents substitute consideration not
    enticement to enter a settlement of the Tribe's water rights.
        As I previously noted, in 1965 the Tribe, United States and Central
    Utah Water Conservancy District entered into what is commonly referred
    to as the Deferral Agreement. In the Deferral Agreement, the Tribe
    provided the United States and the Central Utah Project 60,000 acre-
    feet of water annually to assure the funding and completion of the
    Bonneville Unit of the Central Utah Project. The Bonneville Unit of the
    CUP is the principal component of Utah's water supply future. It is one
    of the most complex and expensive transmountain diversion projects ever
    built by the Bureau of Reclamation. The project diverts water,
    including the 60,000 acre-feet made available by the Tribe, from the
    streams in the Uinta Basin and transports the water westward across the
    Wasatch Mountains to Salt Lake and Utah counties. In exchange for its
    substantial and essential contribution, the Tribe was to receive
    storage in two large dams and replacement water for the 60,000 acre-
    feet made available to the Bonneville Unit. The dams were never built,
    the replacement water never delivered and, if the Settlement is fully
    funded, the 60,000 acre-feet of tribal water will continue to be
    transported annually across the Wasatch Mountains. The Settlement is an
    attempt to place the Tribe in an economic position similar to that it
    would have achieved had the promised structures been built and the
    promised water delivered. As funding is delayed, that goal remains
    unachieved and the opportunities promised (once again) unfulfilled.
        While the sums of money authorized in the Settlement and included
    in the Department of the Interior's proposed 1998 budget, may appear,
    to some, generous, they are in reality relatively small when compared
    to the unfulfilled promises made to the Tribe beginning over 30 years
    ago in the Deferral Agreement or to the enormous economic potential
    offered by the Bonneville Unit, which could not have been completed
    without the Tribe's contribution. To date, Congress has fully funded
    the Tribe's farming programs, found in section 504 of the Settlement,
    and partially funded various reservoir, stream and habitat improvement
    projects provided for in section 505. The Tribe has begun initiating
    the various farm and habitat improvement programs established in the
    Settlement and is in the process of developing its long-range plans for
    utilization of those funds. However, funding of the ``Tribal
    Development Fund'', the largest and most important program in the
    Settlement, was only initiated in fiscal year 1997, in an amount far
    less than is contemplated in the Settlement.
                          the tribal development fund
        Section 506 of the Settlement establishes a Tribal Development Fund
    ``to be appropriated [in] a total amount of $125,000,000 to be paid in
    three annual and equal installments * * *.'' (Due to inflation factors
    statutorily applied to the 1992 authorization, the authorized amount
    has increased over the past four years to approximately $145 million.)
    In fiscal year 1997, Congress made the first appropriation for the
    Tribal Development Fund in the amount of $25 million. This
    appropriation, however, did not meet the statutory requirement of an
    equal one-third installment. Instead, Congress decided to reduce the
    appropriation and ``adjust'' future appropriations in accordance with
    section 506(b). That subsection provides that an adjustment will be
    made by the Secretary which represents the interest income ``that would
    have been earned on any unpaid amounts'' if Congress fails to fully
    fund the Development Fund in three annual and equal installments, It is
    the Tribe's understanding that the proposed $41.5 million appropriation
    for fiscal year 1998, includes an adjustment of approximately $1.5
    million. This amount represents the interest the Secretary has
    determined the Tribe would have received on approximately $23 million
    Congress failed to appropriate in fiscal 1997.
        The Settlement limits the Tribe to spending only the interest
    derived from the Development Fund on it economic projects. Moreover,
    the Tribe is required, under section 506, to prepare a Tribal
    Development Plan setting forth its economic development projects. That
    Plan must be approved by two independent financial consultants approved
    by the Secretary.
        Following receipt of the initial $25 million appropriation, the
    Tribe began a broad review and analysis of potential on-Reservation
    economic development programs. It soon became apparent that until
    funding of the section 506 Development Fund is complete, the Tribe
    cannot fully evaluate, develop or initiate a comprehensive plan to both
    create and foster economically viable enterprises on the Reservation
    and invest in outside economic ventures. It is vital, therefore, that
    funding of the section 506 Development Fund be completed as quickly as
    possible, albeit not in three equal installments, to allow the Tribe
    and its economic advisors to determine with some accuracy the amount of
    interest that will be available for project development on an annual
    basis. The Tribe can only develop a comprehensive, well planned
    economic development program that will provide the greatest possibility
    of success when it knows the amount available to the program for
    economic investment on a year-to-year basis.
                  the proposed fiscal year 1998 appropriation
        The Tribe is fully aware of the fiscal constraints under which both
    the Department of the Interior and the Federal Government as a whole
    must operate. However, Congress clearly recognized and understood in
    1992, that it was essential to fully fund the Development Fund as
    quickly as possibly to foster economic development on the Reservation;
    economic development which should have begun over 30 years ago with the
    projects promised to the Tribe in the Deferral Agreement. The Fund is a
    critical component of the Tribe's efforts to secure economic self-
    sufficiency in the future and that process cannot truly begin until
    funding is complete.
        The Tribe recognizes that in this time of fiscal constraint, the
    proposed appropriation of $41.5 million represents a substantial
    contribution of limited financial resources toward assuring full
    funding of the Tribe's Settlement as quickly as possible. The
    Department of Interior has recommended this appropriation within an
    overall $10 million reduction in the Indian Land and Water Claim
    budget. The Tribe appreciates the efforts of the Department and this
    Subcommittee on its behalf.
        It is important to recognize in reviewing this proposed
    appropriation, that $41.5 million falls short of what was clearly
    anticipated and promised by Congress in 1992. It does not amount to a
    full one-third of the overall authorization and it does not replace the
    shortfall in the 1997 appropriation. At the present rate, the Tribe
    estimates that it will take four to six years, fiscal years 2000-2002,
    before the Development Fund is fully funded. Until then, the Tribe can
    only initiate an extremely limited economic development program that
    will fall well short of that envisioned by the Department of the
    Interior and Congress and is vital to the Tribe and its members.
                                   conclusion
        On behalf of the Tribal Business Committee of the Ute Indian Tribe
    of the Uintah and Ouray Reservation, I would like to express my
    gratitude to the Subcommittee for this opportunity to present the
    Tribe's statement in support of the proposed $41.5 million water
    settlement appropriation for the Ute Indian Tribe. The Tribe and the
    United States have worked together for many years to assure that the
    Tribe would at least receive the economic benefits promised when it
    provided water to assure the construction of the Bonneville Unit of the
    Central Utah Project. We are now close to completing what has been a
    long process. The proposed appropriation of $41.5 million is a critical
    step in bringing this matter to a close and fulfilling the obligations
    undertaken by the United States in 1965 and reaffirmed by Congress in
    1992.
                                     ______

     Prepared Statement of Andrew Grey, Chairman, Sisseton-Wahpeton Sioux
                        Tribe, Lake Traverse Reservation

        My name is Andrew J. Grey, Sr., and I am Tribal Chairman of the
    Sisseton-Wahpeton Sioux Tribe. Our Tribe currently has over 11,200
    enrolled members and more than 5,500 of them live on the Lake Traverse
    Reservation in Northeast South Dakota and Southeast North Dakota. More
    than half of our reservation population is 18 years of age or younger.
        The Tribe currently employs more than 1,300 persons and is the
    largest single employer in the area. However, our unemployment rate
    still exceeds 30 percent.
        Our economy and jobs base is becoming increasingly diversified, but
    the Tribe is still overly dependent on jobs in our gaming industry and
    government services. Major efforts are underway to expend our small
    business sector, add manufacturing facilities to our economic mix and
    more fully utilize our land and natural resources to create jobs and
    generate income. By the year 2000, we plan to have 40 percent of our
    jobs outside of gaming and government services.
        Federal funds not only serve a Tribal function in our economic
    diversification efforts, but they are also essential in providing basic
    services to our members. That is why I appreciate this opportunity to
    provide testimony on the Bureau of Indian Affairs fiscal year 1998
    budget request.
        Our staff has analyzed the BIA's proposed budget, and although it
    provides for an increase in current funding levels, it contributes
    little to restoring the substantial losses that tribes have suffered
    since fiscal year 1994.
        Before I discuss the specific impact of current funding levels and
    the BIA's proposed fiscal year 1998 budget on our Tribe and its people,
    I will make some general observations on BIA funding in ``Indian
    Country,'' including the Lake Traverse Reservation.
        Historically BIA budgets proposed by past Administrations (and
    President Clinton's) have often provided for increases, but those
    increases have generally gone to support the BIA's Central and Area
    Office functions and staff. Few new or additional dollars actually
    reached the tribes or local BIA agencies.
        We appreciated the attention Assistant Secretary for Indian
    Affairs, Ada Deer, paid to this issue in her recent testimony, but we
    remain very skeptical of her claims relative to ``streamlining'' the
    BIA structure. Our view is supported by the fact that the fiscal year
    1988 budget includes for both the Central and Area Offices.
        I must also note that the fiscal year 1998 budget also provides for
    a $76.5 million increase for Tribal Priority Allocations (TPA),
    supposedly those funds go directly to tribes via Self Governance
    Compacts or Public Law 93-638 contracts. However, the increase when
    shared by 550 tribes, becomes quite minimal, particularly when local
    tribal allocations have historically decreased almost every year
    previously. Simply, the proposed funding increase does not restore
    prior losses.
        In addition, the population and employment data used to justify or
    demonstrate local need is frequently outdated and based on US Census
    information derived from substantial under counts of Native people on
    reservations. For example, almost 30 percent of the people living on
    our reservation were not counted in 1990. We are currently completing
    our own census and would like to contract the US Census for our
    reservation in 2000.
        Finally, the BIA's efforts to promote Public Law 93-638 contracting
    and Self Governance Compacts are laudable, but until tribes are
    convinced that all federal departments and agencies accept and clearly
    demonstrate their trust responsibility to and for tribes, most tribes
    will continue to believe that any diminishment of the BIA's role and
    function diminishes the Federal Government's trust responsibility.
        This assumption is supported by the fact that only 60 of the 550
    federally recognized tribes (after five years) have entered into Self
    Governance Compacts and only an additional 10 tribes will be added in
    fiscal year 1998.
        There is also little financial incentive for tribes to seek
    compacts, unless Tribal Shares (residuals) from Area and Central Office
    budgets are included. It will be very difficult to develop an equitable
    process in this regard, however, because residual funds have already
    been committed to 60 tribes based on a tribe-by-tribe approach and not
    an approach that includes all or most tribes.
        Our Tribal members (by referendum vote) have also rejected Self
    Governance, in part for those reasons. On the other hand, the SWST has
    taken full advantage of the contracting options and we have sixteen
    contracts with the BIA and a Master Contract with the Indian Health
    Service (for six programs) that total over $2.2 million.
        With that perspective in mind, let me now address the specific
    situation on the Lake Traverse Reservation.
        First, virtually all of our Public Law 93-638 contracts,
    historically, have been under funded and are usually further reduced
    each year. My comments, however, will be limited to the last two years
    of BIA allocations to our reservation.
        Between fiscal year 1996 and 1997, our Land Operations. Agriculture
    and Fish and Wildlife and Parks (contracts) programs have suffered the
    most severe reductions. Funding support has been cut over 40 percent,
    resulting in the elimination of tow full time positions and the
    conversion of five other to part-time, seasonal jobs. We've also had to
    return our lease compliance contract to the BIA.
        In addition, our Natural Rights Protection contract has been cut by
    almost 25 percent since fiscal year 1995 and only $11,000 is now
    available, hardly enough to hire staff or mount a credible program. The
    funds currently augment our National Resources Planning activities.
        Fortunately, our Tribal Realty staff are supported by land lease
    income and are not effected. These cuts have seriously undermined the
    Tribe's efforts to protect and manage its natural resources, including
    its agricultural lands. According to the BIA's fiscal year 1998 budget
    each of these areas is set for an increase, but we assume little of the
    money will reach us.
        The funds for our Tribal Court have been cut by 15 percent in the
    last tow years resulting in delays, backlogs, increased caseloads, and
    reduced services. We are already operating with a part-time Judge and
    prosecutor. Our Tribal Court currently operates on an annual budget of
    $188,500. Again, since the BIA's 1998 budget provides for only a slight
    increase in this area, we expect little improvement at the local level.
        Our Law Enforcement Agency is also seriously under funded, but BIA
    funding has been relatively stable for the last two years. Law
    Enforcement is scheduled for a substantial increase in the BIA's 1998
    budget, so we encourage the Congress to support it and target all of it
    to reservations.
        The SWST also needs a new detention (law enforcement complex)
    facility, but we recognize that even though the BIA's 1998 construction
    budget proposes an increase for detention facilities, the urgent demand
    far exceeds the recommended $16.5 million.
        Education continues to be a SWST priority and the BIA's budget does
    provide for increases for tribal schools (K-12) and Community Colleges.
    We have both a Tribal School and Community College, so we urge
    Congressional support for the requested increases.
        However, we are discouraged that the BIA's support for new school
    construction since fiscal year 1996 has decreased substantially. We
    need to replace a substandard, deteriorating facility now and are
    prepared to commit Tribal resources to that effort. Construction on the
    $10.325 million complex can begin this year, but we need the $1.5
    million that's available to Sisseton in the BIA's Facilities Management
    and Construction budget to match $1.5 million from the Tribe. A
    replacement facility for Sisseton was on the BIA Priority List (6) as
    early as 1990. We also intend to seek a direct appropriation from
    Congress and issue revenue bonds for the remainder of the costs.
        Relative to the BIA's lack of support for Economic Development, we
    strongly oppose the earlier elimination if its grants and technical
    assistance programs and we oppose its current plans to further reduce
    its funding for Economic Development in fiscal year 1998. In addition,
    the level funding (with inflation) proposed for its guaranteed loan
    programs will have limited impact due to the continuing needs of 550
    tribes. Most tribes do not have revenues from gaming or the leasing/
    sale of natural or mineral resources to support economic development.
        We do support the BIA's request for increased funding for Services
    to Children. Elderly and families. but we join with most tribes in
    opposing the transfer of this program (function) to the TPA system.
    There's already too little TPA money to go around at the local level
    and adding another priority to the list would only make a difficult
    situation worse. In addition, these funds have the greatest direct and
    immediate impact on the most vulnerable of our people and perhaps most
    clearly demonstrates the Federal Government's trust responsibility to
    all of us. The responsibility to adequately fund this function should
    remain with the BIA.
        In conclusion, our response to the BIA's fiscal year 1998 budget
    proposed is mixed and we remain skeptical of many of its claims (e.g.,
    streamlining) and intentions. However, we encourage the Congress to
    provide increased funds to support priorities I outlined in my
    testimony.
        Our own particular interest is to have at least the $380,000 that
    we lost in the last two years restored to our Public Law 93-638
    contracts and the local (BIA) agency's operating budget. We also
    urgently request that the Congress provide an fiscal year 1997
    supplemental appropriation of $150,000 to reimburse the SWST and the
    local BIA agency for those cost incurred (and not budgeted) in
    responding to our recent Winter emergency. These are costs that will
    not be reimbursed by FEMA.
        I appreciate your time and attention.
                                     ______

        Prepared Statement of Joe Moses, Chairman, Tribal Council, the
         Confederated Tribes of the Warm Springs Reservation of Oregon

        Mr. Chairman, I am Joe Moses, Chairman of the Tribal Council of the
    Confederated Tribes of the Warm Springs Reservation of Oregon. Our
    address is P.O. Box C, Warm Springs, Oregon, 97761. My testimony,
    submitted for the record, addresses the proposed fiscal year 1998
    appropriation for the Bureau of Indian Affairs with the following
    requests and comments:
        (1) Adopt the BIA Tribal Priority Allocations budget, which
    restores the program to approximately fiscal year 1995 levels.
        (2) Increase BIA Construction Resources Management Survey and
    Design by $3 million for tribal and BIA participation in hydroelectric
    relicensing activities before the Federal Energy Regulatory Commission.
        (3) Reject ``means tested'' distribution of BIA funding, an
    ``Istook'' amendment, and other legislative policy riders on
    appropriations bills.
        (4) Do not use the appropriations bill to carry out any part of the
    Strategic Plan to Implement the Reforms Required by the American Indian
    Trust Fund Management Reform Act of 1994.
        Below, I discuss each of these requests in further detail
    (1) Adopt the BIA Tribal Priority Allocations budget, which restores
            the program to approximately fiscal year 1995 levels
        The B.I.A. Tribal Priority Allocation (T.P.A.) budget is the heart
    of BIA support to tribes. These funds are spent at the local level
    according to specific tribal priorities. They fund essential tribal
    governmental functions and on-the-ground services to the Indian people.
    For years, tribes have sought to achieve some measure of stability in
    this critical part of the Bureau's budget so they may have some
    programmatic and administrative consistency from year to year. Just a
    few years ago, we thought a significant step had been made toward that
    end with the adoption of the B.I.A. Tribal Budget System, the central
    purpose of which was to provide tribal governments with stable
    recurring funding, flexibility, and tribal control. It was understood
    by many of us that, within the Tribal Budget System, T.P.A. was
    supposed to be the most reliable portion of the B.I.A. budget. Despite
    that, in recent years, T.P.A. has been funded at levels exceptionally
    below the fiscal year 1995 level. Now, for fiscal year 1998, the
    Administration's proposed budget for T.P.A. will roughly restore this
    critical program to that fiscal year 1995 level, with a very small
    increase for increased personnel costs over those years. It does not,
    however, reflect any cost-of-living adjustment for the remainder of the
    program. We urge the Committee to, at the very least, accept the
    Administration's T.P.A. budget proposal of $757 million.
    (2) Increase BIA Construction, Resources Management Survey and Design
            by $3 million for tribal and BLA participation in hydroelectric
            relicensing activities before the Federal Energy Regulatory
            Commission
        Over the next ten to fifteen years, federal licenses for
    hydroelectric projects involving close to 50 Indian tribes will expire
    and come up for renewal before the Federal Energy Regulatory
    Commission. Under the Federal Power Act, the Department of the
    Interior, as trustee for Indian land and water, is obligated to
    directly participate in those relicensing activities to establish
    appropriate conditions within the new licenses. Because these
    proceedings are of a quasijudicial nature, the Department of the
    Interior must develop and present expert testimony on a very wide range
    of highly technical issues.
        In addition, the affected tribes may very well seek to become
    involved in the relicensing proceedings on their own behalf, and many,
    because of the expense of such proceedings, must look to the Bureau of
    Indian Affairs for some assistance. Our Tribe is confronting this exact
    situation. We are in the hydroelectric business and are joint licensees
    with Portland General Electric on the Pelton Project, which
    substantially occupies our Reservation. The current license expires in
    2001 and the Tribe has already formally engaged the F.E.R.C.
    relicensing process by filing a Notice of Intent to seek the license.
    We estimate the effort will cost $4 million between now and 2001. We
    will be able to cover about two thirds of those expenses, but must seek
    Bureau help if we are to mount a credible application.
        In fiscal year 1997, the B.I.A. requested a budget increase of $4.5
    million to provide for active participation in the F.E.R.C. relicensing
    proceedings. Only $500,000 of the request was appropriated. For fiscal
    year 1998, the B.I.A. has scaled back its request to an additional $1
    million. We support that increase and request additional funding of $3
    million, to bring funding for this critical trust function to the level
    of need anticipated by the Bureau. The funding is essential if the
    Interior Department is to comply with the Federal Power Act and its
    trust responsibilities to the tribes, and if the tribes are to become
    less dependent on federal assistance by more completely realizing the
    economic benefits of hydroelectric projects involving their resources.
    (3) Reject ``means tested'' distribution of BLA funding, an ``Istook''
            amendment, and other legislative policy riders on
            appropriations bills
        Mr. Chairman, in recent years, a perception has arisen that Indian
    tribes are suddenly wealthy, and that, in this time of federal fiscal
    constraint, federal appropriations to these ``wealthy'' tribes ought to
    be curtailed. This is referred to as ``means testing'', and I want to
    urge you to resist it on three basic grounds: tribes generally are not
    wealthy, it would be discriminatory, and it would be contrary to our
    treaties.
        First, Indian tribes are not wealthy. By almost any measure, Indian
    people today are still among the most needy in the United States. The
    perception that tribes are suddenly wealthy is attributable to the
    overblown press coverage of a few, perhaps a dozen or so, tribes that
    have found substantial success in gaming. For most other tribes
    engaging gaming, such as ourselves, returns are far less spectacular,
    and most frequently offer only modest or marginal benefits. Most tribes
    still operate on budgets that are anemic compared to those of
    counterpart towns and counties.
        To the degree that gaming does provide some measure of financial
    benefit to tribes, it may also be short-lived, under constant challenge
    from states, the non-Indian gaming industry, and some elements in
    Congress. If gaming is eliminated or diminished, tribal economic
    circumstances will revert right back to their former status, which is
    far from vigorous. So, it would be mistaken and shortsighted to limit a
    tribe's appropriation based on the perception that it is somehow
    wealthy.
        Second, the distribution of federal funding to tribal governments
    based on their relative financial success, or lack thereof, would be
    discriminatory, not only among the tribes, but between the tribes and
    states and other units of government.
        Third, determining a tribe's funding on its comparative wealth is
    contrary to the treaties. Treaties are binding agreements for tribal
    cession of vast tracts of land and peaceful settlement on reservations
    in exchange for U.S. protection and support. That support is not
    contingent upon wealth or poverty, and for the U.S. to now propose
    withdrawing from part of those agreements because it asserts the tribes
    can somehow afford it is a unilateral violation of the intention of the
    treaties.
        We further urge that the Committee resist attempts to add other
    legislative ``rider'' amendments onto the fiscal year 1998 Interior
    Appropriations bill, specifically including any ``Istook'' type
    amendment to force tribes to sign agreements with states and local
    governments for the collection of sales and excise taxes as a condition
    of having any new lands placed in trust. Last Congress, Rep. Ernest
    Istook had such an amendment added to the House Interior Appropriations
    bill on a very close vote, and it was dropped from later versions of
    that legislation. In this Congress, Rep. Istook has recently introduced
    a very similar free-standing bill. Today, as last year, we very
    strongly oppose such legislation. The Istook amendment is a direct
    intervention of not only states, but undefined ``local'' governments as
    well, into the unique Constitutionally-based government-to-government
    relationship between Indian tribes and the United States. Pursuant to
    long-established laws and treaties, the Federal government has the
    responsibility to designate, hold, and protect land for Indian tribes.
    Rep. Istook's amendment, mandating the intrusion of state and local
    governments into that relationship, drastically alters a fundamental
    principle of tribal government and its relationship with the U.S. Such
    a proposal is highly objectionable to tribes on its face, and the
    prospect of having it moved as an amendment, without hearings or the
    full discourse of Congressional debate, is especially objectionable.
        Moreover, Rep. Istook's provisions are unnecessary. Rep. Istook,
    actively backed by commercial special interests, has grossly
    overdramatized the subject of his amendment. Just like most neighboring
    states with differing sales and excise tax structures, a great many
    tribes and states have voluntarily entered agreements to address the
    situation that Rep. Istook asserts demands the heavy-handed intrusion
    of big government.
        Amendments such as Rep. Istook's particularly serve to highlight
    the distortions and shortcomings that arise when legislating by rider.
    Accordingly, we ask that the Committee resist such legislative
    amendments, which not only complicate and cloud the appropriations
    process, but which also dismiss the standards of Congressional
    procedure and deliberation.
    (4) Do not use the appropriations bill to carry out any part of the
            Strategic Plan to Implement the Reforms Required by the
            American Indian Trust Fund Management Reform Act of 1994
        Finally, Mr. Chairman, our Tribe recently received a copy of the
    draft ``Strategic Plan to Implement the Reforms Required by the
    American Indian Trust Fund Management Reform Act of 1994''. While
    certain aspects of the plan have merit, we are concerned that other
    aspects need considerable study. The most significant item proposed in
    the draft is the creation of an independent organization, outside the
    Department of the Interior, which would assume all trust asset
    management functions, including natural resources. This proposal needs
    considerable review and examination. In that regard, we strongly urge
    restraint in any appropriations actions which would implement any
    portion of the proposal as it relates to removal of further functions
    from the Bureau of Indian Affairs. We expect to continue our review and
    actively participate with other tribes in evaluating the plan. As you
    know, plans for Indian Country of the past have not worked well when
    they don't have the full participation of the tribes in their
    development. We will expect to communicate further with your Committee
    as the process moves forward.
        That concludes my remarks. Thank you.
                                     ______

       Prepared Statement of Hon. Ismael John, Senator, Nitijela of the
     Marshall Islands; and Hon. Neptali Peter, Mayor of Enewetak Atoll, on
            Behalf of the Enewetak/Ujelang Local Government Council

        Mr. Chairman and distinguished members of this Subcommittee: Thank
    you for providing this opportunity to the people of Enewetak to
    describe issues relating to food production and the environmental
    situation on Enewetak Atoll. We would also like to inform you of the
    initiatives we have taken these past few years to improve not only food
    production but also the health and education of our people. These
    initiatives include a complete overhaul of our agriculture program; the
    institution of a nutrition education program; the renovation of a three
    story building which now houses our sixteen classroom elementary
    school; the hiring of two highly qualified American teachers to help us
    with our education effort; and, attempts at the economic development of
    our atoll to permit fishing and/or tourist activity.
        Mr. Chairman, at the outset we wish to express our gratitude to the
    United States Congress for the appropriation of funds these past ten
    years to provide food to our people through a program which has become
    known as the Enewetak Food and Agriculture Program. We are also
    grateful that the Administration has included funding in the amount of
    approximately $1.091 million for the Enewetak Food and Agriculture
    Program in its fiscal year 1998 Budget. However, we must note that the
    $1.091 million in the Administration's budget is the same amount as the
    amount appropriated in fiscal year 1987. That is, the funding for the
    program has substantially declined these past 10 years in real dollars.
    Applying a 3.5 percent inflation factor, the $1.091 million
    appropriated in 1987 now has the purchasing power of approximately
    $700,000. In short, the program over the years has experienced over a
    35 percent cut in funding. At the same time our population has
    increased from approximately 1,000 persons to over 1,400 persons. We
    have been successful in employing strategies to cut costs and to
    maximize the funds available to us. However, in order for the program
    to achieve its intended purpose, funding needs to be increased to at
    least keep pace with inflation. Consequently, we ask that the amount of
    $1.5 million be appropriated by this Subcommittee for the Enewetak Food
    and Agriculture Program to reflect the impact of inflation on the
    $1.091 million over the past 10 years. (Applying a 3.5 percent
    inflation factor to the $1.091 million for the past ten years results
    in an amount of approximately $1.5 million.)
        In addition, we note that authorization for funding of the Enewetak
    Food and Agriculture Program expires at the end of fiscal year 1997. We
    trust that the Congress recognizes the necessity and importance of
    continued funding of the food and agriculture program to assist the
    peoples affected by the United States Nuclear Testing Program.
    Accordingly, we trust that the Congress will amend Section 103(h)(2) of
    Public Law 99-239 (Compact of Free Association Act of 1985) to
    authorize funding for an additional five years, through fiscal year
    2001.
        Below, we briefly describe why the Enewetak Food and Agriculture
    Program is necessary, and report to you efforts made by us to put these
    funds to the best possible use.
                  cleanup of residual radiation contamination
        Our objective is the cleanup of Enewetak Atoll from radiation
    contamination to a level which would allow full and unrestricted use of
    our atoll. This objective would permit us to feed and house our growing
    population and would permit us to pursue economic development.
                               present situation
        Between 1977 and 1980 the United States undertook to rehabilitate
    Enewetak from the devastation and radiation contamination which
    occurred as a result of nuclear weapons testing conducted by the United
    States. Forty-three nuclear devices were exploded on the atoll
    including the first thermonuclear device (hydrogen bomb) detonated by
    the United States. Although that rehabilitation effort was a good
    start, it remains unfinished. We presently have use of less than 50
    percent of our atoll for living and food producing purposes. Even that
    figure is misleading because of the poor soil conditions of the 50
    percent of the land available to us. The soil is in poor condition
    because most of it was covered by asphalt and concrete during use of
    Enewetak by the United States for nuclear weapons testing.
                     enewetak food and agriculture program
        The Enewetak Food and Agriculture Program enables us to live on
    Enewetak. It provides funding for imported food, continued agriculture
    rehabilitation, operation of a motor vessel which brings us the
    imported food, a nutrition education program, and an operation and
    maintenance component conducted out of a facility on Enewetak known as
    the field station.
        1. Efforts made to increase food production. As we previously
    explained to this committee, we were unhappy with the state of the
    agriculture rehabilitation program when we inherited the program from
    the Department of Energy. Accordingly, in 1993 we had an assessment of
    our agriculture situation conducted by experts affiliated with
    universities in the Pacific. The purpose of such assessment was to
    determine the current agriculture situation and to develop a plan for
    increased food production. The plan was completed and implementation of
    a new program occurred in late summer 1993. The most significant aspect
    of the program is the reinfusion of nutrients into the soil. This is
    accomplished by digging trenches and placing organic material in the
    trenches along with a compost mixture of copra cake and chicken manure.
    The reinfusion of nutrients into the soil is extremely labor intensive
    and requires the importation of copra cake and chicken manure. Although
    the work is progressing, additional funding is required to provide
    greater manpower and the necessary equipment, materials and supplies.
    The inflation adjusted funding of $1.5 million as requested in this
    statement would greatly assist in accelerating the agriculture
    rehabilitation of the atoll.
        2. Importation of food. Imported food is required because of the
    poor soil condition of the land available to us and the radiation
    contamination of other lands. Since we have taken over the program we
    have increased the quantity of imported food by 50 percent without any
    increase in the overall program budget. We have accomplished this by
    utilizing bidding procedures for food purchases; elimination of
    transportation charges by use of our motor sailer (Wetak II);
    elimination of import tax on food; and reduction of other program
    expenses.
        3. Nutrition education program. Since our people cannot rely on
    traditional foods we must import food, the nutritional value of which
    is unfamiliar to us. Several years ago we became aware that some of our
    people, particularly our children, suffered from malnutrition.
    Accordingly, we instituted a nutrition education program. We are
    pleased to report that we have been apprised by physicians that
    malnutrition among our children has been greatly reduced.
        4. Wetak II (waterborne transportation). The Wetak II, a fifty foot
    motor sailer, is used to primarily transport our imported food
    purchases and agriculture material from the region to Enewetak. Food
    and agriculture material is transported from Majuro, a distance of 600
    miles from Enewetak. We are extremely proud of the hard work and
    perseverance of our local crew and local captain in carrying out this
    assignment. Transportation in this manner permits us to save
    substantial shipping costs.
        5. Field Station. Operation and maintenance of the entire program
    is conducted out of a facility referred to as the Field Station. The
    machinery and equipment required by the agriculture, food and
    transportation components of the program are kept at the Field Station.
    Field Station personnel provide all the required agricultural work;
    maintain, service, and operate the equipment required by the various
    components of the program; make payments and maintain books of
    accounts; and coordinate the procurement of food, material and
    equipment. The overall manager of the program is Johnson Hernest. Other
    management personnel include Samson Yoshitaro and Mathan David. The
    program employs 39 full and part-time employees.
                    radiological monitoring and health care
        We have noticed an increase in the incidence of thyroid nodules and
    cancers in our population. Accordingly, we must be assured that our
    people are adequately monitored on a whole body basis and for plutonium
    inhalation or ingestion. Similarly, we must be assured that the
    environmental monitoring of residual radionuclides in the soil continue
    at the frequency and type of work indicated by Lawrence Livermore
    Laboratory. We also note that we were told that the Defense Nuclear
    Agency was curtailing its monitoring activities of the Runit nuclear
    waste containment site (the Dome). We consider the monitoring of the
    Runit dome to be a continuing responsibility of the United States.
    Accordingly, we asked that an agency of the U.S. assess the current
    condition of the dome and its effect on the surrounding environment. In
    addition, we asked that a plan for the long term monitoring of the dome
    be developed. We understand that the assessment work has begun. We
    trust that the remainder of our request will also be undertaken by the
    United States.
        Our concerns regarding the exposure of our people to radiation is
    underscored by our belief that we were contaminated by radiation from
    the fallout of the 1952 Mike test while we were living on Ujelang
    Atoll. This belief, and the fact that our people reside on an atoll
    that contains residual radiation, emphasizes the need for better
    monitoring and better medical care of our population than has occurred
    to date. We are included in the 177 Health Care Program (also known as
    the Four Atoll Health Care Program). However, that program is burdened
    by an enrollment of over 11,000 persons which limits the medical care
    available to our population. In fact, the administrator of the program
    has calculated that the program is able to spend only $11 per person
    per month. Clearly, such an amount is inadequate to provide any
    semblance of adequate medical care let alone the type of care required
    by a population resettled on an atoll that contains residual radiation
    from the testing program.
                            environmental situation
        The issues that we have mentioned above are directly related to the
    environmental condition of Enewetak. We are trying to do the best we
    can with the little arable land available to us. However, the real
    issue for our long-term well-being is the environmental remediation of
    our entire atoll so that all of it can be used without fear of
    increased health risk from radiation contamination. We are aware of the
    commendable efforts made in the United States to cleanup radiation
    contaminated sites. Oakridge, Tennessee is undergoing environmental
    remediation at a cost of several hundred million dollars per year and
    cleanup is projected to require thirty years of such effort. Other
    sites such as Hanford, Rocky Flats and Los Alamos are just a few of the
    areas receiving environmental cleanup. We understand that the standards
    to which the contaminated areas in the United States are being cleaned-
    up are standards much more stringent than those employed in the cleanup
    of Enewetak. For example, the dome on Runit island on our atoll is used
    to store radioactive material collected from throughout our atoll. We
    understand that the storage of such material in the manner stored on
    Runit would not be permitted in the United States. Furthermore, the
    dome is only a small portion of Runit. The remainder of Runit is
    contaminated with the extremely dangerous radioactive element,
    plutonium. Although we understand that the United States intended to
    cleanup those plutonium affected areas of Runit, no such cleanup ever
    took place. Worse, no effort was ever taken to ensure that adequate
    warnings, fencing and other methods generally used for the protection
    of people from contamination were maintained and/or put in place. We
    understand that this situation would not be permitted in the United
    States. Runit is but one example of how the cleanup methods used on
    Enewetak differ from those later employed in the United States. Another
    example is the level to which the land itself would be cleaned up to
    allow full and unrestricted use. The level of cleanup employed on
    Enewetak does not permit full and unrestricted use of large portions of
    our atoll. Our environmental situation must be addressed to permit us
    to make as much use of our atoll as possible.
                            education rehabilitation
        Several years ago we became concerned with the educational system
    on Enewetak Atoll. We had an assessment of our education situation
    conducted. As a result of that assessment, we hired two very qualified
    American teachers to assist us in upgrading our elementary school. We
    are very pleased with the development of our education program and the
    enthusiasm for learning that such program has engendered in our
    schoolchildren and community. In addition to a new and more effective
    education program, we rehabilitated a three story structure which is
    now used as a sixteen classroom elementary school for our 320
    schoolchildren. We are proud that our new school building is one of the
    finest such facilities in Micronesia.
                              economic development
        We are attempting to have Enewetak developed as a fishing base,
    fresh fish transhipment facility, and a tourist diving destination.
    Enewetak seems to be in a good location for such endeavors. In
    addition, there are some existing facilities (runway and fuel tanks)
    which could be upgraded to facilitate economic development. A
    feasibility study and business plan was completed for the fishing base
    and fish transhipment concept. We were negotiating with an interested
    private sector operator. Unfortunately, there was serious concern about
    the residual radiation on the Atoll and the perception in the Japanese
    market of radiation contamination on Enewetak atoll. This concern and
    perception about the residual radiation contamination at Enewetak
    presents a major impediment to economic development and underscores the
    need to finish the environmental clean-up of the Atoll. We hope to have
    cost figures for such remediation within the next twelve months.
                                   conclusion
        In closing, we thank the Congress for funding the Enewetak Food and
    Agriculture Program and trust that it will give due consideration to
    the necessity for an inflation adjustment to that funding. We also
    trust that the issues describe herein, particularly the remediation of
    radiation contamination at Enewetak, will be addressed by the United
    States.
                                     ______

      Prepared Statement of the Circle of Nations Wahpeton Indian School
                              Board (Wahpeton, ND)

        For over ninety years, the Circle of Nations Wahpeton Indian School
    has been an important place to people from many areas of the country.
    It is a tribal community within the town of Wahpeton, a traditional
    tribal meeting ground where three rivers bring together the Plains,
    Woodland, and Mountain cultures. The states of North Dakota, South
    Dakota, and Minnesota intersect here
        Tribal leaders count on this school to help families who are having
    troubles and whose children have not been able to get the services they
    need in their own home areas. The Circle of Nations School is a
    residential boarding school that offers special education, counseling,
    health and nutrition services in a 24 hour daily home living program
    for the nine-month academic year.
        The provision of education and health services to Indian people has
    been established by numerous treaties and agreements in United States
    history. This was recognized when the school was created by an act of
    Congress in 1904. The continued federal-lndian trust responsibility was
    underlined when the school converted from BIA to tribal control in 1993
    under Public Law 93-638, the Indian Self-Determination and Education
    Assistance Act. The school is now administered under a grant contract
    to the Sisseton-Wahpeton Dakota Nation.
        The school was made a therapeutic model with Public Law 103-382,
    the Improving America's Schools Act of 1994. This concept is a positive
    departure from the old boarding school system that has been widely
    criticized as a contributor to family dysfunction and cultural
    breakdown in tribal communities throughout the United States. But the
    concept must be staffed and funded to be carried out to its full
    potential.
        We, the school board, represent tribal nations with the largest
    populations of students enrolled at Wahpeton. The school board wishes
    to express their true and unequivocal support of the Circle of Nations
    School. The program at Wahpeton is our concentrated effort to create a
    sensible and cost-effective approach to problems that affect the future
    of our youth and our communities.
        ``It takes a village to raise a child.'' This saying is currently
    popular as the new answer to nationwide symptoms of social ills such as
    crime, drugs, poverty, illiteracy, diseases, and the breakdown of the
    family. This country's Indian people have always known that it takes a
    village. Today, the Wahpeton therapeutic residential school community
    is what must serve that purpose for many Indian children.
        There is no social or financial safety net that ensures that all
    Indian children will get adequate healthcare or educational assistance
    in their home communities. Having these programs all concentrated in
    one place, with a good school and highly skilled, dedicated workers is
    the only logical solution to the needs these children have.
        Students come to Wahpeton for reasons that are all too familiar
    with the Circle of Nations School. Homelessness is a common condition
    among students and their families, as are chemical dependency and
    mental health problems. Most students have been physically and/or
    sexually abused. Traumatic brain injury and learning disabilities are
    not an unusual factor in the mix. Some have major hidden health
    problems like FAS/FAE. It is impossible to diagnose all who are
    affected by fetal drug and alcohol exposure.
        All of these things have to be taken into consideration and
    addressed for each child. This takes a number of staff of different
    disciplines to teach and guide these students all around the clock for
    the whole school year. No student has just one problem that brought
    them to Wahpeton. They all come into play to put the student at risk. A
    few cases can be cited as an illustration of the sorts of challenges we
    are faced with as a school.
        One student was found living in an abandoned urban warehouse,
    physically abused and neglected by an alcoholic, mentally ill, and
    indigent parent. Indian Child Welfare found a foster placement in the
    student's home state, but the student could not adjust to the public
    school and was truant, using drugs and alcohol, and involved in gang
    fights. The student completed two school years at Wahpeton and
    experienced success in drug and violence prevention, sports, academics,
    social development and cultural activities. Meanwhile a suitable
    guardianship was arranged for the student's transition from CNS to the
    higher grades. Although the school gets many such applications from
    agencies trying to place students from similar circumstances, it is not
    realistic to admit a large number of these high-risk street kids
    without the resources to deal with them effectively.
        Most students have some degree of homelessness and frequent moves
    in their history. Families of students may move from place to place and
    use a relative's mailing address or phone for messages. Often students
    will try to call home after being at school for a period, only to find
    the phone disconnected. Parents who are forced to move feel that their
    children are safe at the school when family upheaval occurs.
        An example: Three siblings were enrolled at Circle of Nations
    School for the fall semester with a permanent mailing address given on
    the student admissions application. In the winter a story appeared in
    the state's largest newspaper which featured the students' homeless
    parents and older siblings living in a van. Yet the parents had always
    been in regular contact by phone and mail to the school.
        Another student came to Wahpeton from another state and soon began
    to get infractions for AWOL, chemical abuse, assault, and angry
    disruptions. The student was placed in a structured counseling and
    behavior program on campus. While counselors and social workers applied
    to various adolescent treatment programs and tried to elicit funds from
    various state, tribal, and federal entities, the student revealed a
    history of abuse in the household, which was ongoing. The alleged
    perpetrator lived in the household and was reportedly abusing other
    children. Although the abuse had been previously reported and
    investigated, the charges did not stick.
        The student feared to return home for the summer. No agency would
    take custody of the student even though the parent voluntarily
    relinquished custody. No state, tribe, or county would assume
    jurisdiction or responsibility for this child's welfare. No treatment
    center would accept the student for varying reasons. The Indian Service
    Regional Youth Treatment Centers in the student's home area rejected
    this student because the student's dual CD/mental health treatment
    needs were specifically outlined (the school had a psychological
    evaluation done for this student) and judged as too high.
    Unfortunately, this scenario is not atypical.
        For decades now the school has been a last resort for students with
    nowhere else to go. There are numerous success stories: teachers,
    scholars, administrators, business and professional people, actors,
    artists, public officials and senators. The present superintendent, an
    alumnus and graduate of the Wahpeton Indian School, knows well the
    experience of these students, having spent the year round through
    elementary and middle school grades. Developing children have time and
    resilience in their favor. If given the skills, they can learn how to
    cope and to pull themselves through life.
        Life today is more complicated for all children in this country.
    The students at Wahpeton need more specialized help than in the past.
    We would like our students to grow up to be successful. However, we
    realize that our task is to help students overcome difficulties that
    they already have, and prevent a costly outcome in the future. For
    without our ``village'' pitching in to raise the child, the child
    becomes an adult without a social conscience or the strength of spirit
    to be self-sufficient.
        It makes sense to pool resources at a residential school. In the
    ideal plan, the kind of funding that is concentrated on an isolated
    youth treatment center would instead be used to create a comparable
    center on campus for the youth who need it most. These students are
    going to end up requiring the use of different health, social service,
    and law enforcement services anyway, if they are left on their own in a
    problem environment.
        BIA and Indian Health Service funds and service do not follow these
    students to Wahpeton. Once removed from their home tribal areas, they
    will probably lose eligibility for Medicaid as well. Indian Health
    Service provides a school nurse and basic health service only. There is
    no psychiatrist, psychologist, or mental health clinician.
        The Circle of Nations School is requesting funds to further develop
    and staff the Behavioral Health Center on-campus. These are start-up
    funds for a program that has been operating on a small scale during the
    1996-97 school year. This program could pay for itself in five years if
    the necessary staffing and supervision were available.
        In this era of dwindling resources and budgetary cuts, the obvious
    solution is to consolidate and serve a population with the most
    potential benefit. This is the purpose of school reform and in
    agreement with the whole village, whole child concept.
                                     ______

    Prepared Statement Lorene Willis, President, National Indian Education
                                  Association

        The National Indian Education Association (NIEA), the oldest
    national organization representing the education concerns of over 3,000
    American Indian and Alaska Native educators, school administrators,
    teachers, parents, and students, is pleased to submit this statement on
    the President's fiscal year 1998 budget regarding Indian education.
    NIEA has an elected board of 12 members who represent a broad cross-
    section of the national Indian education community. NIEA's annual
    convention provides our members with an opportunity to network, share
    information, and hear from Congressional leaders and staff and federal
    officials on policy and legislative initiatives impacting Indian
    education.
        First, we want to commend President Clinton for a budget that
    emphasizes the importance of education for all American citizens,
    including the First Americans. His school construction and education
    technology initiatives are critically needed by Bureau of Indian
    Affairs (BIA)-funded schools. Yet, we must not forget that programs
    such as the Office of Indian Education (OIE) in the Department of
    Education (DOE), Impact Aid, and higher education scholarships deserve
    further consideration for possible increases. Our testimony will
    discuss Indian education and related programs administered by the BIA
    and the Indian Health Service (IHS) as well as the school construction
    initiative.
        Second, we have noted the transfer of funding for OIE programs from
    the Interior to the Labor-HHS-Education Appropriations Subcommittee.
    Prior to this development, OIE was the only DOE program funded from an
    appropriation other than Labor-HHS-Education, which often placed it at
    odds with the BIA's other priority programs. Our testimony also address
    OIE. We believe education is part of the federal trust responsibility
    regardless of what type of school--public or tribal--Indian and Alaska
    Native students attend.
                       a. bureau of indian affairs [bia]
        NIEA concurs with the BIA's fiscal year 1998 budget investment of
    $467 million for school operations. An additional $58 million is
    requested for Continuing Education, Tribal Priority Allocations (TPA),
    and Special Programs.
        Adult education.--Adult Education is a vital, yet continually
    under-funded, program that is desperately needed by adult American
    Indians and Alaska Natives who did not complete high school to help
    them obtain General Educational Development degrees (GEDs). The
    program's funding has decreased over the past three years to the fiscal
    year 1998 request level of $2.3 million--itself a $85,000 decrease from
    fiscal year 1997. All tribes need adult education programs and, with
    the elimination of OIE's Adult Education Program in 1997, funding for
    the BIA's program is critical. We urge a minimum of $4 million for BIA
    adult education in fiscal year 1998.
        Higher education scholarships.--NIEA supports the President's
    request of $29.5 million for higher education scholarships. This
    program provides grants to tribally-contracted programs to provide
    financial aid for eligible Indian and Alaska Native students attending
    accredited post-secondary institutions. While scholarships are based on
    need, the program funds about 25 percent of a student's need. However,
    the unmet financial need for Indian and Alaska Native students
    nationwide is about $80 million.
        Johnson-O'Malley (JOM) program.--The fiscal year 1998 request is
    $17.216 million, a $1.040 million decrease from fiscal year 1997 and a
    $7.143 million decrease from the fiscal year 1995 level of $24.359
    million. This is the only BIA program which provides for culturally
    relevant and supplementary academic needs of Indian children attending
    public schools. Given an increasing, rather than decreasing, student
    population, NIEA recommends funding for JOM at $24 million in fiscal
    year 1998.
        Indian school equalization program (ISEP) formula.--The President's
    fiscal year 1998 request is $296 million for this program, which
    provides formula-based funding for 185 BIA-operated, elementary and
    secondary contract and grant schools. The amount, representing a $10.5
    million increase over fiscal year 1997, would provide about $3,094 per
    Weighted Student Unit (WSU) compared to $2,904 per WSU in School Year
    (SY) 1996-97. NIEA continues to support a funding level of $3,500 per
    WSU, which we have recommended since fiscal year 1993. We note that the
    proposed $3,094 per WSU is still far below the average per student
    expenditure by public elementary and secondary schools of $6,300 per
    student in SY 1995-96 as reported by the National Center for Education
    Statistics (NCES).
        Family and child education (FACE) program.--The fiscal year 1998
    request of $5.5 million for this program is an amount that for two
    years has remained unchanged despite a growing population. It is also
    $1 million less than the enacted fiscal year 1995 level of $6.5
    million, itself a reduction by $1.1 million from fiscal year 1994. We
    urge funding for this program at the fiscal year 1995 level with a 4
    percent adjustment for inflation.
        Student Transportation.--NIEA supports the fiscal year 998 request
    of $34.3 million for student transportation. BIA-funded schools, which
    are located primarily in rural, isolated areas, remain well below the
    national average. According to the latest School Bus Fleet information,
    the national average for student transportation costs in SY 1993-94 was
    $2.94 per mile for public schools. But, the BIA-funded transportation
    cost in fiscal year 1996-97 was at $1.60 per mile for 15,197 miles
    driven for day and boarding schools--a difference of $1.34 per mile.
        Administrative Cost Grants.--NIEA supports the fiscal year 1998
    request of $44.7 million. With at least 10 of the remaining 49 BIA-
    operated schools on the Navajo reservation indicating they will convert
    to grant status after July 1997, at a projected cost of $4.6 million,
    the BIA will need another $1.6 million for this expense. Severence
    costs may or may not be factored into the Administration's request, and
    there may be additional school conversions in fiscal year 1998.
        Education facilities operation and maintenance (O&M).--The fiscal
    year 1998 request for Facilities O&M is $74.6 million, a slight
    increase from fiscal year 1997. We support this level with misgivings
    because funding continues to fall below the level needed for this area.
        Tribal departments of education (TDOE's).--Since the President's
    budget fails to provide funding for this item, NIEA recommends at least
    $3 million for TDOE's, which are authorized by Public Law 103-382, the
    ``Improving America's Schools Act.'' We believe sufficient funding
    should be provided to assist tribes to accomplish the original intent
    of the Act.
        Tribal Colleges/Post-secondary Schools.--NIEA supports the
    President's request of $29.3 million for tribally-controlled colleges
    operating grants, although the real need is about $40 million based on
    an estimated 6,815 Indian Student Count (ISC). NIEA also supports $2
    million for tribal college endowments, $2 million for economic
    development, and $1.8 million for emergency facility repair and
    renovations. In addition, tribal colleges have never received
    facilities construction or renovation/repair money from the BIA. While
    the national average for Full-Time Equivalent (FTE) funding at
    mainstream community colleges is approximately $6,200 per year, the
    level of FTE funding for some special population colleges is about
    three times that provided to the tribal colleges. NIEA also supports
    separate funding levels in fiscal year 1998 for BIA-funded post-
    secondary vocational institutions including Haskell Indian Nations
    University at $8.1 million, Southwest Indian Polytechnic Institute
    (SIPI) at $4.6 million, the Institute for American Indian Arts (IAIA)
    at $5.5 million, and the United Tribes Technical College (UTTC) at $2.5
    million.
        Graduate scholarships.--The fiscal year 1998 request of $1.33
    million for the Special Higher Education Graduate Program, which is the
    primary funding source for American Indian and Alaska Native graduate
    students, is totally inadequate to help these individuals meet the
    costs of achieving an advanced degree. NIEA requests a funding level of
    $3 million for fiscal year 1998. The program, which is administered by
    the American Indian Graduate Center (AIGC) of Albuquerque, New Mexico,
    has been woefully underfunded for the last 3 years. For school year
    1995-96 the actual unmet need was $10 million. During the fiscal year
    1995-96 year the program funded an estimated 500 students at an average
    award of $3,300--considerably lower than the $6,750 per student award
    for fiscal year 1991-92. Scholarship awards have been decreasing
    despite an ever-increasing demand for these limited funds.
        Replacement school construction.--The fiscal year 1998 request of
    $14 million for Replacement School Construction is to complete the Many
    Farms High School on the Navajo reservation in Arizona. While we
    support this request, we must also point out that the current request
    list for new schools also deserve Congress's attention and support.
        Education facilities improvement and repair (FI&R).--NIEA supports
    the fiscal year 1998 request of $32.2 million for Education FI&R.
    Furthermore, since there is a backlog of over $600 million in this
    program, we request that Education FI&R be funded at the fiscal year
    1995 level of $34.3 million with a 4 percent adjustment for inflation.
                         b. indian health service (ihs)
        Indian health professions scholarships.--The President's fiscal
    year 1998 request is $28.3 million, a $1.5 million increase over the
    fiscal year 1997 enacted level. However, NIEA supports the National
    Indian Health Board's (NIHB) recommended level of $29.7 million. The
    Indian Health Professions Sections 103, 104, and 114 under Title I of
    the ``Indian Health Care Improvement Act'' provides authorizations to
    support scholarship recipients, loan repayment to health professionals,
    and temporary employment during non-academic periods.
        School-based health education programs (IHS and BIA).--NIEA
    successfully advocated in 1992 to obtain a new authorization in the
    Indian Health Care Improvement Act (IHCIA) to establish school-based
    health education programs. Our fiscal year 1998 request is $5 million
    for both programs ($3.5 million for IHS and $1.5 million for BIA).
    Under Section 215 of the Act, the Secretary of HHS is authorized to
    award up to $15 million in grants to tribes to develop school health
    education programs for reservation-based children in grades K-12 which
    could be set up in public, contract, grant and private schools. The
    Interior Secretary is directed to develop, in consultation with the
    Secretary of DHHS, a comprehensive school health education program for
    children ages pre-school through Grade 12 in BIA-funded schools. The
    Secretary of HHS is directed to do likewise within IHS.
        The curricula in BIA-operated schools would include programs such
    as nutrition education, personal health and fitness, mental health
    wellness, substance abuse prevention, safety education, and activities
    for the prevention and control of communicable diseases. The Interior
    Secretary is also directed to provide training in health curricula to
    teachers in BIA-operated schools to ensure coordination and integration
    with existing programs and services and to encourage tobacco-free
    school environments. The area of school health education currently
    receives minimal support from both the BIA and IHS. Through an intra-
    agency agreement, IHS receives $230,000 annually from the Centers for
    Disease Control and Prevention (CDC) for school health education
    programs, which is the entire budget for this effort. Otherwise, BIA
    has no specific funds for this purpose. We urge the Committee to
    support funding for this authorization by at least $3.5 million for
    grants to tribes and $1.5 million for the BIA to fulfill its
    requirements under Section 215.
        HIV/AIDS prevention.--According to the CDC, there were 1,434
    reported and verified diagnosed cases of AIDS among Native Americans as
    of June 1996, approximately a 12 percent increase over the amount CDC
    reported in October 1995 (1,283). Although the CDC's announcement on
    February 27, 1997 that the number of deaths nationally from AIDS had
    declined, including a 32 percent drop among American Indians and Alaska
    Natives, it did not address the issue of individuals living longer with
    AIDS and needing long-term care. We have noted there is no line item
    for AIDS medication in IHS's budget and that the President's budget
    does not cover the cost of drugs to treat Indian and Alaska Native
    people infected with HIV. The fact remains, however, that for these
    individuals, IHS is the only source for their medical care. Despite
    recent improvements in the treatment of HIV/AIDS, such as the
    development of more effective drugs, far too many of our people are
    being denied this type of care because IHS is not being funded to
    provide it. NIEA supports the National Congress of American Indians'
    (NCAI) recommendation that a restricted line item be included in IHS's
    budget to cover the cost of AIDS-related treatment.
        Furthermore, while NIEA supports the fiscal year 1998 request of
    $3.8 million for HIV/AIDS Prevention, which is only a slight increase
    from fiscal year 1997, we cannot impress strongly enough upon the
    Committee the need for additional funding to combat this dreaded
    disease. NIEA recommends a significant increase in actual funding to
    all HIV/AIDS education and prevention programs within IHS, and urges
    the Committee to impress upon HHS to implement the final
    recommendations of the President's Advisory Council on AIDS Services
    Committee regarding Native American AIDS Care Issues.
              c. proposed national school construction initiative
        President Clinton has proposed a $5 billion school construction
    initiative which would provide funds over the next four years for
    nationwide school construction and renovation. The proposed $5 billion
    would help pay for up to half the interest that local school districts
    incur on school construction bonds, or for other forms of assistance
    that will spur new state and local infrastructure investment. Interior
    Secretary Bruce Babbitt has asked the Office of Management and Budget
    to include a 10 percent set-aside for BIA-funded schools rather than
    the 2 percent which is being considered by the legislation's sponsors.
        The proposed 10 percent set-aside would allow the BIA to address
    its backlog of school repair projects, including school replacements.
    The estimated backlog of BIA schools needing repair and renovation is
    $675 million. NIEA wholeheartedly supports the Secretary's request for
    a 10 percent set-aside for BIA-funded schools if the President's school
    construction initiative is enacted.
        In conclusion, we want to thank the Subcommittee for continuing to
    give its attention to the issues and concerns we have raised in our
    testimony. In light of the federal government's trust responsibility
    for the education all American Indians and Alaska Natives, and on
    behalf of our members, we urge the Subcommittee's support for
    maintaining or increasing the funding for the Indian education and
    related programs discussed herein at the levels we have recommended.
                                     ______

    Prepared Statement of James E. Billie, Chairman, the Seminole Tribe of
                                    Florida

        The Seminole Tribe of Florida is pleased to submit this statement
    regarding the Tribe's fiscal year 1998 request for $1.21 million from
    programs in the Department of Interior. The Tribe asks: that Congress
    provide $840,000 from the National Park Service, Everglades research
    budget for the Seminole Tribe for activities related to the Everglades
    Restoration Initiative on the Big Cypress Reservation; that Congress
    provide $199,500 from the Bureau of Indian Affairs for water quality
    studies, as a part of the Tribe's Everglades restoration efforts for;
    and that Congress provide an additional $173,000 from the Bureau of
    Indian Affairs for the design and construction of the best management
    practices on the Big Cypress Reservation.
        The Tribe's Everglades Restoration Initiative is a $63 million
    project to construct a comprehensive water conservation system. This
    project is designed to improve the water quality and natural
    hydropatterns in the Big Cypress Basin. This project will contribute to
    the overall success of both the federal and the state governments'
    multi-agency effort to preserve and restore the delicate ecosystem of
    the Florida Everglades. In recognition of this contribution, the
    Seminole Tribe's Restoration Initiative has been endorsed by the South
    Florida Ecosystem Restoration Task Force (see attachment) and has been
    found to be consistent with the recommendations of the Governor's
    Commission for a Sustainable South Florida.
                         the seminole tribe of florida
        The Seminole Tribe lives in the Florida Everglades. The Big Cypress
    Reservation is located in the western basins, directly north of the Big
    Cypress National Preserve. The Everglades provide many Seminole Tribal
    members with their livelihood. Our traditional Seminole cultural,
    religious, and recreational activities, as well as commercial
    endeavors, are dependent on an healthy Everglades ecosystem. In fact,
    the Tribe's identity is so closely linked to the land that Tribal
    members believe that if the land dies, so will the Tribe.
        During the Seminole Wars of the 19th Century, our Tribe found
    protection in the hostile Everglades. But for this harsh environment
    filled with sawgrass and alligators, the Seminole Tribe of Florida
    would not exist today. Once in the Everglades, we learned how to use
    the natural system for support without harm to the environment that
    sustained us. For example, our native dwelling, the chickee, is made of
    cypress logs and palmetto fronds and protects its inhabitants from the
    sun and rain, while allowing maximum circulation for cooling. When a
    chickee has outlived its useful life, the cypress and palmetto return
    to nourish the soil.
        In response to social challenges within the Tribe, we looked to our
    Tribal elders for guidance. Our elders taught us to look to the land,
    for when the land was ill, the Tribe would soon be ill as well. When we
    looked at the land, we saw the Everglades in decline and recognized
    that we had to mitigate the impacts of man on this natural system. At
    the same time, we acknowledged that this land must sustain our people,
    and thereby our culture. The clear message we heard from our elders and
    the land was that we must design a way of life to preserve the land and
    the Tribe. Tribal members must be able to work and sustain themselves.
    We need to protect the land and the animals, but we must also protect
    our Tribal farmers and ranchers. Recognizing the needs of our land and
    our people, the Tribe, along with our consultants, designed a plan to
    mitigate the harm to the land and water systems within the Reservation
    while ensuring a sustainable future for the Seminole Tribe of Florida.
    The restoration plan will allow Tribal members to continue their
    farming and ranching activities while improving water quality and
    restoring natural hydroperiod to large portions of the native lands on
    the Reservation and ultimately, positively effecting the Big Cypress
    National Preserve and Everglades National Park.
        The Seminole Tribe's project addresses the environmental
    degradation wrought by decades of federal flood control construction
    and polluted urban and agricultural runoff. The interrupted sheet flow
    and hydroperiod have stressed native species and encouraged the spread
    of exotic species. Nutrient-laden runoff has supported the rapid spread
    of cattails, which choke out the periphyton algae mat and sawgrass
    necessary for the success of the wet/dry cycle that supports the
    wildlife of the Everglades.
        The Seminole Everglades Restoration project was designed to allow
    the Tribe to sustain ourselves while reducing impacts on the
    Everglades. The Seminole Tribe is committed to improving the water
    quality and flows on the Big Cypress Reservation. We have already
    committed significant resources to the design of this project and to
    our water quality data collection and monitoring system. We are willing
    to continue our efforts and to commit more resources, for our cultural
    survival is at stake.
        In addition to addressing the ecosystem concerns related to the Big
    Cypress Reservation, the Tribe has been actively involved in the
    development of the ecosystem-wide restoration plan. The Tribe, as an
    active member of both the Governor's Commission for a Sustainable South
    Florida and the South Florida Ecosystem Restoration Task Force and
    Working Group, has worked cooperatively with our neighbors to design a
    sustainable future for all of South Florida.
                seminole tribe everglades restoration initiative
        The Department of Interior, through the BIA, has provided the Tribe
    with about $200,000 in each of the fiscal years 1994 through 1997. In
    addition, through the NPS, Interior provided the Tribe with $390,000 in
    fiscal year 1997. The Tribe has used these funds to monitor and analyze
    the quality and quantity of water coming onto and leaving the
    Reservation. The Tribe has also developed a conceptual plan that will
    enable us to meet new water quality standards essential to the cleanup
    of our part of the Everglades ecosystem and to plan for the storage and
    conveyance of our water rights. The appropriated funds have also been
    used to design the Tribe's best management practices program, with the
    assistance of the Department of Agriculture's Natural Resources
    Conservation Service. We continue to use available funds to further the
    design and planning work necessary to implement our Everglades
    Restoration Initiative.
        The Tribe's Everglades Restoration Initiative is designed to
    mitigate the degradation the Everglades has suffered through decades of
    flood control projects and urban and agricultural use and ultimately to
    restore the nation's largest wetlands to a healthy state. Our
    Everglades Restoration Initiative will enable the Tribe: to collect and
    monitor data to establish a baseline and to evaluate performance of the
    overall system design; to design and construct surface water management
    systems to remove phosphorus, convey and store irrigation water,
    improve flood control, and rehydrate the Big Cypress National Preserve;
    to commit to the long-term operation and maintenance of new water
    management systems; and to design and implement comprehensive best
    management practices for the Big Cypress Reservation.
        The Initiative will cost approximately $63,427,496. This project
    will enable the Tribe to meet the numeric target for phosphorus
    concentration that is being used for design purposes by state and
    federal authorities. It will also provide an important public benefit:
    a new system to convey excess water from the western basins to the Big
    Cypress National Preserve, where water is vitally needed for
    rehydration and restoration of lands within the Preserve.
        In addition, a portion of the Tribe's project is being considered
    as a ``critical project,'' under Section 528(b)(3) of the Water
    Resources Development Act of 1996. This authority allows the Corps of
    Engineers (COE) to begin construction of a number of Everglades
    restoration projects on a fast track. On the basis of consensus
    agreements reached at a series of meetings, the Tribe's critical
    project is expected to be funded. The planning and design funding
    requested in this testimony is crucial because the funds will allow the
    Tribe to continue to move the critical project portion of the
    Initiative along in order to meet the Congressional deadline.
                                   conclusion
        Improving the water quality of the basins feeding into the Big
    Cypress National Preserve and the Everglades National Park is vital to
    restoring the Everglades for future generations. By granting this
    appropriation request, the federal government will be taking a
    substantive step towards improving the quality of the surface water
    that flows over the Big Cypress Reservation and on into the delicate
    Everglades ecosystem. Such responsible action with regard to the Big
    Cypress Reservation, which is federal land held in trust for the Tribe,
    will send a clear message that the federal government committed to
    Everglades restoration.
        The Seminole Tribe is ready, willing, and able to begin work
    immediately. Doing so will require substantial commitments from the
    Tribe, including the dedication of over 9,000 acres of land for water
    management improvements. However, if the Tribe is to move forward with
    its contribution to the restoration of the South Florida ecosystem, a
    substantially higher level of federal financial assistance will be
    needed as well.
        The Tribe has demonstrated its economic commitment to the
    Everglades Restoration effort; the Tribe is asking the federal
    government to participate in that effort,also. This benefits not just
    The Seminole Tribe, but all Floridians who depend on a reliable supply
    of clean, fresh water flowing out of the Everglades, and all Americans
    whose lives are enriched by this unique national treasure.
        In closing, I must also urge you to give careful consideration to
    increasing the funding set-aside for Tribal Priority Allocation (TPA)
    accounts. The BIA budget has already absorbed a disproportionate share
    of the cuts which Congress has made to discretionary funding. TPAs, of
    all categories within BIA accounts, most directly boost tribal
    economies by providing direct funding to tribal priority
    infrastructure, health, and education needs. With growing populations
    and annual inflation, even ``holding the line'' on TPA's amounts to a
    reduction in funding. Although the federal government is working
    through tight budget times, I urge you not to try to balance the
    federal deficit on the backs of the Tribes. The federal government has
    a trust responsibility to the Tribes. Severe cuts to the BIA budget,
    and to TPA's specifically, violate that trust responsibility. All
    Tribes, including the Seminole Tribe of Florida, are struggling with
    increasing needs and decreasing funding. For the sake of our children
    and the survival of Tribal culture, I urge you to fund fully the TPA's.
        I appreciate the opportunity to present my views to this
    Subcommittee and would be happy to provide additional information upon
    request.
                                     ______

             Prepared Statement of the Colorado River Indian Tribes

        The Colorado River Indian Tribes is pleased to have the opportunity
    to submit the foregoing statement to the Senate Appropriations
    Subcommittee on Interior and Related Agencies regarding the fiscal year
    1998 appropriations that are necessary to effectively operate our
    tribal government programs.
                            bureau of indian affairs
        The proposed BIA budget of $1.73 billion would restore $126.1
    million to the BIA for fiscal year 1998. This $126.1 million increase
    in less than half the amount that was lost in fiscal year 1996. None of
    the funding lost in fiscal year 1996 has been restored.
        The BIA budget request for fiscal year 1998 emphasizes funding for
    Tribal Priority Allocations (TPA) programs, which include tribal Self-
    Determination contracts and Self-Governance compacts. The requested
    increase is necessary to keep pace with the transfer of additional
    Indian programs into TPA by the BIA. Tribal Priority Allocations funds
    will support this transfer of programs and funding from the BIA to
    tribal governments will allow more local control of programs with less
    federal bureaurocracy. Although this increase is, it is hardly adequate
    to meet the needs of the programs that serve Native American people.
                             indian health services
    IHS
        The proposed IHS budget of $2.4 billion requests an increase of $68
    million over the fiscal year 1997 appropriated level. However, the
    funding is not adequate to keep pace with medical inflation costs,
    population growth and newly-recognized tribes, and would not reduce the
    backlog of unmet health care needs. The Colorado River Indian Tribes
    are particularly concerned about the lack of increases for Contract
    Health Services for the past two years.
    Construction of Parker Out-patient Facility
        The Colorado River Indian Tribes (Tribes) believe that the long
    overdue replacement of the Parker Out-patient Facility should be a top
    priority with IHS. Total funding of $20,291,320 is needed to complete
    the design and construction of the Parker Health (Ambulatory) Center.
    This included $661,020 to complete the design phase of the project and
    $19,630,300 for the construction phase and medical equipment. After
    many years of delay in the planning process to begin replacement of the
    health care facility, the Tribes assumed responsibility of the project
    and a contract for the design and construction of the facility was
    awarded. Since then, Architectural/Engineering services for the design
    is near completion and construction is expected to begin in the spring
    of 1998, provided that funding is appropriated in the fiscal year 1998
    budget.
        Funding for construction of this project is needed in order to
    bring this project to completion. The current facility is old,
    originally constructed in 1930 with additions made in the 1950's, and
    functionally obsolete and cannot serve the medical needs of the
    population. In the past the Tribes have received Congressional support
    for the construction of the facility. Funding for the construction and
    staffing of the new facility has been rated top priority for the last
    ten years and construction has yet to be initiated.
                         specific appropriation request
    Colorado River Indian Irrigation System
        In 1993, $1.9 million was allocated for the Colorado River Indian
    Irrigation Project. Although rehabilitation work on the Colorado River
    Indian Tribes Irrigation Project has made much progress, much work is
    still needed to complete the rehabilitation work. Funding in the amount
    of $3,450,000 is requested for the following components of the project:
        1. Replacement of existing large gate check structures (8) which
    are old hand-operated wooden gates that severely reduce the amount of
    water delivered to the farms and cause numerous breaks in the canal
    banks. These failing structures need to be replaced with numerous
    breaks in the canal banks. These failing structures need to be replaced
    with modern radial gate control structures with automated level
    controls at an estimated cost of $1,600,000.
        2. Replacement of six existing large radial gate structures, which
    are extremely corroded and cannot he effectively operated dale to old
    controls. These gates are failing and should be rehabilitated.
    Structural rebuilding, and installation of modern electric controls and
    automation will allow them to effectively control the large amount of
    water flowing through them. They currently serve over 40,000 acres. The
    cost is estimated at $600,000.
        3. Replacement of existing wooden wasteway structure which
    maintains the water level in one of the largest laterals in the CRIT
    Irrigation System which leaks (wastes) a very large amount of water to
    a drain emptying to the Colorado River. This structure needs to be
    replaced with a modern concrete and metal sluice gate with electric
    controls and automatic level sensors to prevent flooding damage to the
    neighboring cropped fields at an estimated cost of $300,000.
        4. Lateral 73-36, which serves a substantial portion of the
    southeastern quarter of the Reservation, has inadequate irrigation
    water carrying capacity to meet the needs of the crop lands in that
    area. If the Tribes are to use that land, it must be enlarged to
    increase the culvert and gate structures and related field turnouts at
    an estimated cost of $300,000.
        5. There are currently no farm water delivery measurement devices
    for the 80,000 acres of irrigated crop land on the Reservation. The
    Tribes must have the means to carefully control and distribute their
    water and regulate the farm lessees to keep water use at its most
    efficient. In addition, the Tribes cannot make full use of their
    irrigable land without these measurement devices and good efficient
    water control. Estimated cost of $400,000.
        6. All improvements to the irrigation system will require
    professional engineering design and supervision when constructed.
    Estimated cost for such engineering design consultant services is
    $250,000.
                                   conclusion
        The Colorado River Indian Tribes ask for your support in protecting
    the funding for BIA and IHS in fiscal year 1998. In 1995, the Senate
    Budget Committee included the following language in its 1996 Concurrent
    Resolution on the Budget, calling for protection of the BIA and IHS
    funding at the 1995 levels for the next seven years:
        ``The [Senate Budget] Committee recognizes the unique trust
    relationship between the U.S. Government and the nation's Indian tribes
    and pueblos. That trust relationship is based on a government-to-
    government principle embodied in treaties and subsequent actions by
    both the Executive and Legislative Branches of Government, and the
    courts. The Committee acknowledges this trust relationship, and assumes
    that programs serving Native Americans through the Bureau of Indian
    Affairs will be given consideration for ongoing federal support.''
    (Senate Report 104-82)
        To uphold this Congressional commitment, the Colorado River Indian
    Tribes request this language to be included in the 1998 Concurrent
    Resolution on the Budget.
        The Colorado River Indian Tribes thank you for the opportunity to
    bring these matters to your attention. Please feel free to contact the
    Tribes If you have any additional questions.
                                     ______

     Prepared Statement of Bruce Wynne, Chairman, Spokane Tribe of Indians

        Thank you for the opportunity to submit this testimony on behalf of
    the Spokane Tribe. The Tribe is located in Eastern Washington, has
    2,145 members and a Reservation of 156,000 acres. While the Spokane
    Tribe was historically a fishing tribe, we now rely primarily on timber
    for tribal income. There are three program areas within the Bureau of
    Indian Affairs for which the Tribe is asking for increased funding over
    the Administration's fiscal year 1998 request: Tribal Priority
    Allocation ($195,900); Upper Columbia United Tribes ($400,000); and
    Lake Roosevelt Management ($100,000). We also support the President's
    proposed increase of $3 million for funding for the Tribally Controlled
    Community Colleges. In the Indian Health Service, the Tribe is asking
    the Subcommittee to support funding for new modular units to house the
    Tribe's clinic programs (approximately $500,000); funding for an
    elderly assisted living program ($200,000); and funding for operational
    costs of the Healing Lodge of the Seven Nations youth treatment
    facility ($2.1 million). In addition, there are two policy matters the
    Tribe wishes to bring to the Subcommittee's attention: the first is the
    proposal to remove the trust responsibility office from the BIA which
    we oppose at this time and the second is the need to include tribes in
    the decisions related to restructuring of the Pacific Northwest Energy
    System.
                            bureau of indian affairs
    Tribal Priority Allocation (TPA) Account
        The BIA budget request shows a modest increase in TPA funding. As
    you know, TPA represents nearly 50 percent of the total budget for the
    BIA but it is the lifeblood of tribal governments. It is the money
    tribes receive to support services for their people. We do not have a
    tax base; the United States owns legal title to all our lands and they
    are not taxable. The United States obligation to provide funds for
    tribal health, education and welfare programs is part of the treaty
    guarantees made to tribes by the United States in return for the
    cession of millions and millions of acres of land.
        Because of the decreases in fiscal year 1996 and fiscal year 1997
    funding for the TPA account, the proposed increase will leave tribes
    barely even with the fiscal year 1995 actual dollar level but actually
    losing in terms of adjustments for inflation. At Spokane, our TPA
    funding in fiscal year 1997 was $593,200; the anticipated funding in
    fiscal year 1998 would be $635,700, an increase of $42,500. Mr.
    Chairman, we use these funds for many purposes, including tribal
    government infrastructure, services for children and the elderly,
    scholarships, education, courts, law enforcement, adult vocational
    training, agriculture and forestry. As you can see, the funds must be
    stretched very thin for all programs. The services the Tribe is
    expected to deliver versus the amount of our contracts for these
    programs does not fulfill the BIA's trust responsibility. For example,
    our contract for natural resources is $2,800, obviously not enough to
    fund even a support staff person; community fire protection is funded
    at $4,100; public safety at $12,700. Our additional identified needs
    total $195,900 as shown below: $40,000 for scholarships; $40,000 for
    fire protection; the Tribe currently loses 98 percent of all structure
    fires because of bad equipment, inadequate communications, and remote
    fire stations; $115,900 for tribal courts. The Tribe's court caseload
    has increased fourfold in two years.
        We ask the Subcommittee to support the President's proposed
    increase for TPA and to add more if possible to this account which
    targets spending at the local level. An across-the-board ten percent
    increase over the President's budget would be of great benefit to all
    tribes nationwide.
    Tribally Controlled Community Colleges Act
        The President's budget requests an increase of $3 million for the
    TCCC's. We believe this minimum amount is necessary to maintain stable
    and productive colleges on Indian reservations. The Spokane Tribal
    College is in its early stages of development as a sister college of
    the Salish-Kootenai College at the Flathead Reservation in Montana. We
    are proud of our accomplishments to date and look forward to full
    participation in the TCCC's program in the near future.
    Upper Columbia United Tribes (UCUT)
        The primary purposes of the UCUT program is to mitigate the harm to
    fish and wildlife caused by the construction and operation of
    hydroelectric facilities on the Columbia River and its tributaries. The
    tribal portion of this program has helped the Northwest Power Planning
    Council to understand the fundamental importance of fish and wildlife
    resources to the religious, cultural and economic livelihood of the
    Indian Tribes. UCUT funds are used to implement, monitor and evaluate
    fish and wildlife plans, as well as for regulatory enforcement, for
    planning, and for coordination between state, federal and tribal
    governments.
        The President's budget request of $297,000 includes a return of
    $74,000 that had been transferred in fiscal year 1997 to the Kootenai
    Tribe under its self-governance program. Because UCUT involves
    management of a shared resource by four tribes in the Northwest, it is
    also a shared responsibility and thus is not a program that is amenable
    to separation of funding. We believe the proposed transfer is correct
    and hope that the Subcommittee will concur.
        We have recently completed an assessment of total funding needs for
    this program and found it to be just over $700,000. The four UCUT
    tribes would be most grateful if the Subcommittee would recommend an
    increase of $400,000 to $700,000 for fiscal year 1998. This increase is
    needed for the tribes to continue to leverage funding from other
    sources such as BPA and EPA; to implement new fish and wildlife
    projects approved by NPPC in 1995; and to maintain and improve existing
    projects approved in 1987, 1994, and 1995. In addition, funds are
    needed to assist tribes in developing recommendations for a NPPC
    amendment process being initiated this year.
    Lake Roosevelt
        Lake Roosevelt was formed when the Grand Coulee Dam was constructed
    in the early 1940's. Both the Spokane and Colville Tribes participate
    in the management of the environment and the recreational uses of the
    area surrounding the Lake. The Tribes implement the cooperative
    management agreement entered into between the Tribes and the Department
    of the Interior for management of this resource. The BIA has asked for
    an increase from $577,000 in fiscal year 1997 to $590,000 in fiscal
    year 1998. The Tribe supports the proposed increase. For the
    Subcommittee's information, the Spokane Tribe's contract amount is
    $185,000; the actual, documented need is $285,000. Right now, the
    contract supports salaries and vehicle costs for three rangers; it does
    not fund the parks maintenance staff, vehicles or supplies. The Tribe
    must pay these costs from its own revenues. Therefore, the Spokane
    Tribe requests an additional $100,000 earmarked for the Tribe's
    management contract for Lake Roosevelt.
        The Tribe also supports the testimony of the Northwest Intertribal
    Court System requesting funding for the Indian Tribal Justice Act and
    for the NICS program through the BIA.
                             indian health service
        As a general comment, the Spokane Tribe is concerned about the
    inadequate funding base for the Indian Health Service, particularly the
    lack of funds for Alcohol and Substance Abuse, and the inadequate base
    for Mental Health Services. We note that the fiscal year 1998 budget
    request does not include increases for inflation and to meet the cost
    of implementing managed care throughout the IHS system. The Tribe is
    also concerned about the ongoing need for additional resources for
    construction funds, since many of the clinics in the Northwest are
    outdated, and unable to meet standards for quality health care.
        An IHS service unit clinic at Spokane serves all of the Indians
    residing on and near the Spokane Reservation. The clinic is small and
    is housed in a substandard facility. It is understaffed, with not
    enough doctors, dentists and other needed health personnel. We
    understand that Representative Nethercutt, who is the Tribe's
    representative in the Congress, is working with the IHS to obtain
    modular units to house the clinic. We ask the Subcommittee's support
    for his efforts. The cost will be about $500,000.
        In addition, Mr. Chairman, we would like to begin an assisted
    living program for our elderly citizens through the CHR program at IHS.
    The Tribe would need a minimum of $200,000 to establish such a program.
        Our third request under IHS is for $2.1 million in fiscal year 1998
    for operational costs of the Healing Lodge of the Seven Nations. The
    Healing Lodge is a residential program that utilizes a holistic and
    traditional American Indian approach as well as the 12-step principles
    of recovery for the treatment of chemically dependent youth. The
    Healing Lodge is governed by seven tribes in Washington, Idaho and
    Oregon. In addition to the Spokane Tribe, the Colville, Kalispel, Nez
    Perce, Kootenai, Coeur d'Alene and Umatilla Tribes participate. Last
    summer, the facility moved to a new site in the Spokane Valley. Within
    a 32-youth and 12-family bed facility on a forested 38-acre site, the
    treatment team responds to the needs of Native youth by offering such
    treatment services as group and individual therapy; culturally-relevant
    therapy; life skills instruction; chemical dependency lectures; family
    therapy; aftercare and transitional planning; and health and mental
    health, nutrition and fitness assessments. At the end of February, the
    Healing Lodge completed its first cycle under a new, eight-week
    treatment program, having provided services to 151 youth aged 13 to 18.
    Of that total number, 62 completed treatment and were transitioned to
    aftercare programs.
        Finally, the Spokane Tribe also supports the testimony of the
    Northwest Portland Area Indian Health Board in its entirety. We are
    particularly supportive of the proposed bill language that would allow
    use of maintenance and repair funds to be used for new construction
    when the costs of repair exceeds the costs of new construction. The
    Tribe also supports the request for $200 million to cover unfunded
    mandatory costs increases.
                                 policy matters
        The Tribe is very concerned about the proposed plan to implement
    reforms required by the American Indian Trust Fund Management Reform
    Act of 1994. In particular, the Tribe has determined that further study
    must be undertaken of the proposal to create an independent
    organization, outside the Department of the Interior, that would assume
    all trust asset management functions. Because of our concerns, we
    strongly urge that the Subcommittee not take any action to implement
    any part of the proposal until the Tribes have reached some agreement
    on the matter.
        In addition, the Tribe is involved in an effort to develop a truly
    comprehensive restructuring plan for the Pacific Northwest Energy
    System. A steering committee, appointed by the governors of Washington,
    Oregon, Idaho, and Montana, developed recommendations for energy system
    restructuring that was driven largely by utility and industrial
    interests; it did not involve the affected Tribes. These same governors
    recently appointed a Transition Board to expedite implementation of the
    Steering Committee's recommendations but, again, the Transition Board
    does not include any tribal representatives nor have they attempted to
    involve the Tribes in their deliberations. The Tribes are concerned
    that the recommendations now under review do not address impacts on
    fish and wildlife and cultural resources, nor do they assure
    continuation of conservation programs or support for renewable energy
    efforts. We wanted the Subcommittee to be aware of our concerns in this
    area. Tribal efforts to organize to respond to these threats to federal
    law and treaty obligations are costly. We do not now ask for
    appropriations for this purpose but wanted you to know our concerns and
    the kinds of issues Tribes face almost constantly and to which they
    have little or no resources to respond.
        The Tribe appreciates the opportunity to submit this testimony, and
    we look forward to working with the Subcommittee during the fiscal year
    1998 appropriations cycle.
                                     ______

       Prepared Statement of Dr. Edward Slocum, Superintendent, New Town
                          Public School District No. 1

        My name is Edward Slocum. I am superintendent of the largest school
    district on the Fort Berthold Indian Reservation in western North
    Dakota. Our school district provides an education for 47 percent of the
    Native American children on Fort Berthold. Over 80 percent of the K-12
    enrollment of the New Town Public School District No. 1 are Native
    American students. Ironically, our district is one of only two
    districts on this reservation which are not able to receive funding as
    a BIA ISEP Grant School through the U.S. Department of the Interior.
    This written testimony will focus on why it is so important for
    Congress to provide the funding necessary for ISEP to allow the current
    moratorium on new school starts to be lifted.
        You may wonder why, if this district wanted to be a BIA funded
    school, did we wait so long to decide to apply? Historically, New Town
    was not believed to be located on the reservation when the U.S. Army
    Corps of Engineers created the city of New Town by relocating three
    smaller towns, which were flooded when the federal government built the
    Garrison Dam. Then, in 1974, the U.S. Supreme Court ruled that a large
    piece of land, including the city of New Town, was indeed located on
    the Fort Berthold Indian Reservation. The delayed effects of these two
    major federal decisions were eventually reflected when the K-12 student
    enrollment reached over 50 percent Indian students in the New Town
    Public School District in 1986. Since then, that percentage has been
    climbing every year and the student enrollment has been increasing
    steadily.
        On February 23, 1995, the New Town Public School District's Board
    of Education met with the Tribal Council of the Three Affiliated Tribes
    and obtained a resolution authorizing the New Town School Board to
    apply for BIA grant funding for school operations, as provided for in
    Public Law 100-297, Title V, Parts A & B. By that time, K-12 student
    enrollment was nearing 50 percent Indian students, and three of the
    five School Board Members were Native Americans. The district has been
    applying every year since then only to be denied due to the moratorium
    on new school starts.
        The most recent State data, School Finance Facts. January 1997,
    showed New Town Public School District's average cost per pupil as
    $4,076.09, while Mandaree School District, a Bureau funded ISEP school
    also located on the Fort Berthold Reservation, has been able to spend
    $10,967.45 per pupil. The New Town Public School District has been
    averaging nearly 70 percent of its students on Free and Reduced meals
    over the past several years due to the high unemployment rate on the
    reservation. The strong correlation between the economically
    disadvantaged and academically disadvantaged is abundantly evident in
    our district. Nearly 50 percent of our elementary aged students qualify
    for Title I assistance as educationally disadvantaged. The New Town
    Public Schools can not afford any Gifted and Talented Programs. The
    district has just finished replacing all buses originally purchased
    during the 1970's and many textbooks are far older than the recommended
    five year replacement age. The district's tax base only yields $337,000
    per year towards our 3.9 million dollar General Fund. Impact Aid is
    never fully funded and so those revenues do not adequately compensate
    for the lands taken off the tax rolls.
        Of our 589 Indian students, 125 do not generate Impact Aid dollars
    because they do not live on qualifying Indian Trust Lands. It has been
    calculated that our district would be eligible for an increase in
    funding of approximately $3.5 million if approved as a BIA funded ISEP
    grant school. These funds are badly needed to provide for the
    educational needs of the students of the district.
        In summary, it is our hope that adequate funding levels will be
    provided by Congress to enable districts such as ours to be allowed to
    become a BIA funded school. It is unimaginable that the Three
    Affiliated Tribes of Fort Berthold Reservation can have half of their
    enrolled member students ineligible for the quality of education
    intended for Native American children in the passage of Public Law 100-
    297.
                                     ______

    Prepared Statement of Mervin Wright, Jr., Chairman, Pyramid Lake Paiute
                                     Tribe

        Good morning, Chairman Gorton, Members of the Committee and
    Honorable Tribal leaders. My name is Mervin Wright, Jr. and I am the
    Tribal Chairman for the Pyramid Lake Paiute Tribe of Nevada. On behalf
    of the Pyramid Lake Paiute Tribe, I appreciate the opportunity to
    testify before the Senate Sub-Committee on Interior Appropriations. We
    express our gratitude for Committee support in the past, and
    respectfully request the Committee to fund the Tribe's priorities for
    fiscal year 1998: High School Construction, Education, Water Rights
    Settlement, Resource Management, Indian Health Services, Environmental
    cleanup, Law Enforcement, and Cultural Preservation. A brief history
    will support this request for funding.
                                 tribal history
        The Pyramid Lake Paiute Tribe is one of many Paiute band of the
    Northern Paiute Nation and was affirmed by the Indian Reorganization
    Act of 1934. The Pyramid Lake Indian Reservation is the largest Indian
    reservation in the State of Nevada covering approximately 476,000
    acres. The reservation contains entirely within its boundaries, a
    natural desert lake from which the Tribal name was derived. It is the
    largest terminal lake in the United States and has a surface area of
    110,000 acres and is deep as 330 feet. A prehistoric indigenous fish
    species called the Cui-ui (pronounced Kwee-wee) has existed in Pyramid
    Lake for thousands of years and is the foundation of our Paiute
    culture. The Cui-ui is currently listed as an endangered species, while
    another inhabitant fish species the Lahontan Cutthroat Trout is listed
    as threatened species. The Lahontan Cutthroat Trout is an important
    aspect of our livelihood, as is the Cui-ui and was once the primary
    economic support for our Paiute People.
        The enrolled membership of the Tribe is approximately 1,800 people.
    As a Tribal Government, the Tribal Council responsibility is to provide
    primary services to our elderly, our children, and the support for
    social order within our reservation. Cultural identity is becoming a
    prevalent matter of importance in preserving the well being of our
    people. Education is a primary focus for the betterment of our People.
    Health care is an area that requires professional care at an affordable
    price. Social Services will enhance the well being of our People in
    addressing social ills of our modern day society. These are issues
    which have additional pressures that we are managing and require
    financial resource support for eventual success.
    Pyramid Lake High School: $10,000,000
        The planning and architectural design phase of our high school is
    100 percent complete. As one of many Tribes who have placed education
    as an important asset of our People, unfreezing of the Tribal high
    school construction list will be a major step to assist in preparing
    our children for future endeavors in career and professional
    advancement. A high drop out rate and low self esteem among our high
    school students causes parents and administrative staffs to react,
    sometimes negatively, to address the problems of drop out rates. The
    physical conditions of school modular facilities are often equivalent
    to trailer parks; children who attend such facilities often have
    increased feelings of low self-esteem. A new high school will enhance
    the acceptance of an educational standard of achievement that will
    promote post secondary education and the well being of our communities.
        Unfreezing the construction list will provide the means for
    advancement of all Indian Tribes currently on the construction list to
    begin recognizing the effort by each government to achieve an objective
    that promotes consistent objectives in our societies. In promoting and
    supporting a high standard of achievement, and from personal
    experience, each child entering high school must be provided the
    opportunity to realize the challenge of successful completion of an
    educational institution. Tribes have become better prepared and
    educated to deal with social disorders and recognize the goal of
    motivating our children to strive for better conditions for their lives
    than the experiences we hold from our past.
    Water rights settlement/water resources management: $6,500,000
        The Pyramid Lake Paiute Tribe has a long history of water
    litigation on the Truckee and Carson Rivers in Northern Nevada. Since
    the inception of the Newlands Reclamation Project in 1902 and the
    accompanying Derby Dam construction in 1908, the degradation of the
    Pyramid Lake aquatic habitat and environmental structure has been
    seriously damaged. Litigation was costly and the Tribe decided to enter
    negotiations in the mid-1980's in an attempt to resolve outstanding
    issues through talks with upstream municipalities, the States of Nevada
    and California and the federal government. A settlement act was
    achieved in 1990 with the Congressional passage and Presidential
    signing of Public Law 101-618, the Truckee-Carson-Pyramid Lake Water
    Settlement Act.
        The Pyramid Lake Paiute Tribe is in the process of settling two
    outstanding lawsuits which were filed in the early 1980's against the
    Truckee Meadows Water Treatment Plant. The lawsuits have been
    dismissed. However, the water rights purchase program to augment
    instream flows to the Truckee River during July, August, and September
    was agreed to by the parties to resolve concerns about future expansion
    of the wastewater plan. Six million dollars has already been
    appropriated and is in the federal system. The United States Department
    of Interior, on behalf of the Tribe, is obligated to purchase $12
    million worth of water rights from willing water right holders in the
    Truckee River Basin. We are concerned that if the Bureau of Indian
    Affairs gains control of any amount of these tribal funds, the Tribe
    will lose some of the benefit intended for the Tribe. The Tribe is
    quite capable of managing and administering this program.
        We are currently involved with negotiating the final stage of the
    Truckee-Carson-Pyramid Lake Water Settlement Act (Title II of Public
    Law 101-618); however, the management and monitoring enforcement
    measures will not conclude with achievement and approval of this
    settlement. The Pyramid Lake Paiute Tribe is one of five principle
    signatories of the settlement act. As we begin the initial
    implementation phases of the settlement act, it is acknowledged of the
    immense administrative responsibility accompanying implementation of
    this law. The Tribal Water Resources Management Contract will require
    $500,000 in funding support for a highly technical advanced operation
    associated with monitoring flows and water quality criteria, scheduling
    releases, managing released flows, accounting of water supplies and
    participating in further implementation and regional water
    negotiations. The decision to enter negotiations was one to avoid
    litigation expenses, plus to achieve resolution by compromising from
    each side to lessen the ability to create and support adversarial
    positions.
    Health Services: $1,000,000
        The social structure on our reservation is one of fragile capacity.
    The problem associated with the lack of adequate services to our People
    is a reflection of funds appropriated for unnecessary purposes. The
    Health Service provided through Indian Health Services is not adequate.
    The services reaching our People are not reflective of the amount of
    funding support in the Area and Headquarter Offices of this agency. The
    Tribe has built its own clinic facility, but the bureaucracy
    surrounding the service absorbs much of the funding before actual
    services can be provided. This amount will support contract health,
    dental, mental health, substance abuse, child abuse, and social based
    services.
    Cultural resource preservation: $300,000
        The Pyramid Lake Paiute Tribe is affected by the enactment of
    various federal laws and State statutes associated with the protection
    and preservation of cultural resources. Some issues have the effect of
    compromising and damaging existing resources. The Tribe has the ability
    to represent concerns and issues before federal and state agencies, but
    does not have the financial ability to organize an effort to work
    cooperatively and in conjunction with such agencies. The Tribe will be
    responsible for planning and developing important representation to
    protect and preserve cultural resources. This amount will provide the
    Tribe the ability to work with other Paiute Tribes in an effort to
    utilize necessary resources to protect cultural resources.
    Environmental clean-up: $250,000
        Pyramid Lake received substantial impacts associated with the New
    Year's Flood in the Truckee River Basin. Two sewer mains were broken,
    the Sparks industrial area suffered serious flooding which resulted in
    a number of unidentifiable contaminants reaching the Truckee River and
    eventually ending up in Pyramid Lake. Several bird species have been
    taken for toxicology studies to determine the extent of contamination.
    The impact to the micro-organism habitat is not yet known and our fear
    is that the beginning of a food chain so important to the rest of this
    habitat has suffered consequential damage. This fund will support
    activities in an effort to maintain control measures for water quality.
    As we proceed into monitoring requirements under a water quality
    agreement (stated above) and proceeding with implementing tribal water
    quality standards, it is important to establish and implement a
    hazardous material response against environmental degradation.
    Law enforcement: $500,000
        Tribal law enforcement requires financial support for effective
    enforcement of tribal laws and regulations. In enforcing the regulatory
    requires for law and order, fish and game and ordinance compliance,
    this funding will support the ability to work cooperatively with
    federal officials, state officials, and local jurisdictions. It is
    important that our tribal government accept and support the needs of
    adequate law enforcement for proper enforcement measures to meet our
    community needs.
    Policy Issues
        BIA and IHS Reorganization.--As Congress begins to review the
    reorganization of the federal agency, BIA, there are serious concerns
    with respect to the structure of the BIA which provides actual services
    to reservation communities. When tribes view their resources, certain
    considerations must be acknowledged to the trust obligation of the
    federal government. In recent years the federal agencies have struggled
    for power and authority in Indian affairs. The BIA is not recognized as
    a force within Interior in representing the trust responsibility
    directly to Indian Tribes. The authority vested in the Interior
    Department to uphold the trust responsibility does not exist with the
    proper authority, BIA.
        Now, in reviewing the structure of the BIA, it is the BIA Area
    Offices and the BIA Agencies that tend to regulate the authority of
    this federal agency. The services provided through the Interior
    appropriation process gets into the system, but normally the area and
    agency offices tend to absorb the funds intended for tribal programs.
    In some cases, the federal laws are misinterpreted and BIA officials
    misguide Tribes in complying with statutory requirements. It is a
    matter of reducing the bureaucracy causing setbacks, but not cutting
    funding for services. This Congress should seriously consider strategy
    thinking in recourse management. The focus must view the trust assets
    as priority.
        The IHS is in the same situation. The services are not received at
    adequate levels. It is the Area Office and the Headquarters where the
    bureaucracy absorbs the funding intended to provide services on the
    ground. A comparison in one case, is the commissioned officials making
    six digit salaries, and the Tribe receives $152,000 to serve 1,300
    patients in contract health services. The purpose or reorganizing the
    IHS should be viewed as one to increase the services at the
    reservation. It is recommended that the process of restructuring the
    IHS not result in less services. Deficit spending is occurring in this
    agency, and the Area Offices are not accepting responsibility in
    balancing the deficit. The Tribes who have provided needed services
    through contracting must not be penalized for the efforts we are
    making. Tribal members eligible for Medicaid and Medicare, but the IHS
    system offers their services as a supplement, not as an addition to the
    care provided. Either way the system provides the best method to serve
    our patients.
        School construction.--While the bulk of the responsibility for
    Indian school construction falls now within the BIA, the President has
    asked for $5 billion to fund school construction needs in the United
    States and we are hopeful that the Congress will accept this proposal.
    However, we know that funds for this would be appropriated by the
    Subcommittee on Labor and HHS Appropriations. We understand that
    Interior Secretary Babbitt has suggested that 10 percent of these
    funds, if appropriated, be set aside for school construction. We agree.
    The federal government owns the legal title to our lands and we have no
    tax base. In our view, the first responsibility of the federal
    government to the nations's school construction needs should be on
    Indian lands. Ten percent of $5 billion would take care of much of the
    unmet school construction needs in Indian country.
        Trust responsibility.--The federal trust responsibility is one that
    our People know well and is one that I cannot allow to be overlooked or
    placed secondary to resources of material content. We are People of
    this land, the first People of this land and express our concern for
    equal, if not better, services for our People than has been provided by
    the Congress over the past 20 years.
                                     ______

    Prepared Statement of Joseph C. Saulque, Chairman, Owens Valley Indian
                                Water Commission

        This appropriations request is for the U.S. Department of the
    Interior, Bureau of Indian Affairs, Water Resources Protection Program.
    The amount of funding being requested for fiscal year 1998 is $258,068.
    This money will be used for capital startup costs for the Owens Valley
    Tribes' comprehensive Groundwater Monitoring Program and negotiation
    support costs.
             background information about organization to be funded
        In 1991, the Paiute people commonly known today as the Owens Valley
    Paiute Indians, but to themselves are known as Nume which means people,
    chartered the Owens Valley Indian Water Commission (Commission) to
    serve as their water department to: negotiate the tribes' water rights
    with the federal government and the Los Angeles Department of Water and
    Power (LADWP); address the impacts of LADWP's water extractions and
    diversions on reservation environments; and improve water-related
    conditions on the reservations.
        The Commission is comprised of two tribal members from each tribe
    for a total of ten Commissioners. Six of the Commissioners also serve
    on their respective tribal councils and the others are appointed by
    tribal resolution.
        The Owens Valley Tribes are part of the greater Northern Paiute
    Nation whose original territories encompassed the greater part of
    western Nevada, parts of Oregon and Idaho and east central California.
    The Owens Valley Tribes include the Big Pine Paiute Tribe of the Owens
    Valley, the Bishop Paiute Tribe, the Fort Independence Paiute Tribe,
    the Lone Pine Paiute-Shoshone Tribe, all located in Inyo County, CA,
    and the Utu Utu Gwaitu Paiute Tribe located in Mono County, CA.
    California's Owens Valley stretches for 100 miles along the eastern
    flank of the Sierra Nevada range. At present, the tribes occupy only a
    small fraction of their ancestral lands. The majority of these lands
    are now owned by the City of Los Angeles Department of Water and Power
    for water gathering activities or are administered by the Inyo National
    Forest Service and the Bureau of Land Management. The Owens Valley
    supplies 70 percent of Los Angeles' domestic water supply.
                       exportation of owens valley water
        At the turn of the century, the City of Los Angeles (City) began
    acquiring land and water rights in the Owens Valley which at present
    total 300,000 acres in Inyo and Mono Counties, comprising 97 percent of
    the privately held land. In 1913, the City completed a surface aqueduct
    (the first) between the Owens Valley and Los Angeles and began
    exporting Owens Valley water.
        In 1941, the City completed the Mono Basin Project which gathered
    the natural run-off from the Mono Basin and delivered water to Los
    Angeles through the first aqueduct. Since 1917, the City has drilled
    more than 360 wells in the Owens Valley to access groundwater to be
    used as a supplementary source of water during dry years.
        In 1959, the City proposed the construction of a second aqueduct to
    carry water from Owens Valley to Los Angeles for the purpose of
    completing the development of the Inyo-Mono supply and to ensure the
    City would not lose certain water rights on which it had filed. At the
    time the City finished constructing the aqueduct in 1969, it had not
    yet started increasing its exportation of groundwater when the
    California Environmental Quality Act (CEQA) became law in 1970. Because
    the groundwater extraction was viewed as a separate project dividable
    from the construction of the second aqueduct, the Court of Appeal
    required the City to prepare an Environmental Impact Report (EIR) under
    the CEQA. The City has prepared two EIR's (1976, 1981) and both of
    these have been declared legally inadequate by the Third District Court
    of Appeal for the State of California.
        In 1984, the Court granted permission to the City and the County of
    Inyo (County) to enter into an interim long-term groundwater management
    agreement and attempt to negotiate a resolution of the pending
    lawsuits. The final EIR submitted to the Court on October 21, 1992,
    contains the final agreement of the parties which describes a long-term
    groundwater management plan. Neither the Tribes nor the United States
    are parties to this agreement.
        While the County has found the City's final EIR to be adequate, the
    Third District Court of Appeal has retained jurisdiction of the
    lawsuit. The State of California's Department of Fish and Game, as well
    as other environmental groups and concerned individuals, have
    challenged the adequacy of the City's EIR. It now appears that a
    settlement has been reached by the parties and that this settlement was
    presented to the Court of Appeal on January 24, 1997. The Commission
    had no input concerning this proposed settlement.
        In 1990, the Big Pine Tribe (who at that time was the lead tribe of
    the Commission) prepared comments concerning the City's proposed EIR.
    After the filing of these comments, the Commission requested and
    received amicus curiaestatus with the Third District Court of Appeal.
        During this same time, the Commission began negotiations with the
    Los Angeles Department of Water and Power (LADWP) concerning its
    environmental concerns, as well as the issues of reserved water rights
    for lands traded to the City in a 1939 land exchange with the United
    States. In this exchange, the United States has traded 3,126 acres of
    land throughout the Owens Valley for 1,391.5 acres of land which are
    now the reservations of the Bishop, Big Pine, and Lone Pine Tribes. In
    this agreement, the water rights were reserved on the traded lands,
    with the City agreeing to provide, in perpetuity, four (4) acre feet of
    water per acre per year annum to the present reservation lands. The
    United States reserved the water rights to the 3,126 acres traded to
    the City and the City retained the water rights to the present
    reservation lands.
        The Commission believes the present FEIR and long-term groundwater
    management agreement fails to recognize the off-reservation water
    rights of the Tribes, and fails to protect these rights, as well as the
    vegetation and general environment on the present reservations. The
    negotiations with the LADWP center around these issues.
          commission groundwater monitoring and negotiation activities
        In recognizing its trust responsibilities and in support of the
    Commission's efforts, the Bureau of Indian Affairs, Central Office,
    provided $219,000 to the Commission in fiscal year 1991-92. This money
    was used to support the negotiation activities with the LADWP and to
    hire Commission technical consultants. The Commission hired a
    hydrologist, Dr. Woldezion Mesghinna of Natural Resources Consulting
    Engineers, Inc. and a research specialist, Mr. Daniel Gallacher, of
    Historical Research Associates Inc., to investigate and quantify the
    reserved water rights held by the United States on the lands traded to
    the LADWP.
        In August 1992, the Bureau of Indian Affairs agreed that the
    Commission would have the lead role in negotiating with the LADWP while
    the United States would support the negotiations and provide technical
    assistance. The Commission had been in discussions and negotiations
    with the LADWP since early 1992 and had made substantial progress in
    addressing areas of concern to the Owens Valley Tribes. At a meeting
    held in April 1993, discussions between the Commission, its experts and
    the LADWP centered on the reserved water rights retained by the United
    States and the methodology used to quantify those rights.
        Unfortunately, in 1993 negotiations stalled when the Bureau of
    Indian Affairs chose not to continue funding the Commission's efforts
    until the 1993 fiscal year had almost expired in September. It was not
    until October 1993 that the Commission was able to confirm that $88,500
    had been contracted. These funds were used to fund additional studies
    concerning the Practicably Irrigable Acreage Quantification.
        In December 1993, a federal fact-finding team was appointed to
    investigate the water claims filed by the Commission on behalf of the
    Tribes. In September 1994, the team completed its investigation and
    prepared a final report.
        As the negotiations continue, the Tribes' water rights, water
    resources and reservation environments continue to be negatively
    impacted by the City's water gathering activities. In 1994, the
    Commission was successful in securing BIA funding in the amount of
    $200,000 to initiate a groundwater monitoring program and protection
    system for the Owens Valley reservations. Rather than directly contract
    with the Commission to oversee the development of the system, the BIA
    provided these funds to the United States Geological Survey (USGS) to
    develop the system. The system was never developed. The BIA informed
    the Commission that USGS reported having spent over $90,000 to drill
    monitoring wells for the Owens Valley Tribes. In actuality, there were
    no wells drilled by the USGS on any of the Owens Valley reservations
    with these funds. The Commission has on several occasions requested
    from the BIA a copy of the USGS report of work completed. No report has
    been provided. In November 1994, the Commission was informed by the BIA
    that the balance of these funds had been returned to the BIA Central
    Office in Washington and redistributed to another tribe. Consequently,
    the Owens Valley Tribes are without a groundwater monitoring system to
    safeguard their water rights, water resources and reservation
    environments.
        Based on the fact-finding team's report, a federal negotiation team
    consisting of Mr. Dan Jackson, Mr. Bob Laidlaw, and Mr. Curtis Milsap
    was appointed in July 1995, to help facilitate a settlement between the
    Commission and the LADWP. During the rest of 1995 and 1996, the parties
    have met on numerous occasions and have made steady progress.
    Currently, the parties and their consultants are meeting to discuss and
    agree on a quantification of the federally-reserved water rights
    belonging to the Owens Valley Tribes.
        In fiscal year 1995 the Commission received Water Resources
    Protection Funding in the amount of $150,000 and initiated a
    comprehensive Groundwater Monitoring Program. Due to limited funding
    the program is being developed in four phases. The first phase was
    completed in fiscal year 1995 ($34,056). The second phase will be
    completed in fiscal year 1996 ($75,316) and it is anticipated the third
    ($40,546) and fourth phases ($39,534) will be completed in fiscal year
    1997.
        The Commission is requesting continued funding to complete these
    negotiations and to provide for the capital start-up costs of actual
    groundwater monitoring. The capital costs include the installation of a
    shallow and a deep acquifer monitoring well on each of the five
    reservations. The amount being requested for fiscal year 1998 is
    $258,068.
                         funding for california tribes
        The Commission strongly feels there has been inequities in the
    amount of funding being provided to California Tribes. For over 100
    years, studies conducted by federal, state and private agencies have
    reached the same conclusion: California Indians are not receiving a
    fair share from federal Indian programs; and because they have received
    less support from the federal government, California Indians have
    suffered in social-economic well-being relative to other Indian groups
    in other states.
        Well-documented reports have come from both Republican and
    Democratic administrations concluding that per capita spending for
    California Indians was below that in other areas. For example, in 1975,
    per capita spending for California Indians was $309.97 of the total
    Bureau allotment, while spending in the Minneapolis Area was $859 per
    person and spending in Portland averaged $1,576 per person. The degree
    of inequity is understated because the Bureau systematically
    undercounts California Indians. In 1989 the Bureau's California service
    population count was 28,815 and the 1990 census count for California
    Indians was 236,078. Approximately 100,000 of the 236,078 California
    Indians are actual Native California Indians.
        The history of federal policy toward California Indians offers
    insight into the weakness of the Bureau's service population criteria.
    The failure of the federal government to ratify the 1852 treaties it
    negotiated with California Indians and to establish a suitable
    reservation land base for them means that the general criteria limiting
    service population to Indians ``on or near reservations'' should not be
    applied in California. This geographic criterion is currently not
    applied to Indians in Oklahoma and Alaska. The number of California
    Indians who participated in claims awards based on past deprivation of
    land proves that the federal government views them as Indians, yet the
    Bureau refuses to recognize their tribal groups.
        Budget analysis from the 1980's and 1990's confirms that these
    inequities have persisted. Based on the Operation of Indian Programs
    and the BIA's official service population figures for the years 1990 to
    1994, California Indians are receiving only one-third to one-half the
    funding received by all other Indians. In 1994, for example, the
    Sacramento's per capita funding was $700.30 while the rest of the BIA-
    served Indian population enjoyed per capita funding of $1,310.51.
                     reduction in natural resource funding
        The continual reduction in appropriated funds for the BIA's natural
    resources budget, including water resources, is unjust. Only five
    tribal governments in California have quantified their water rights.
    Consequently, there is a lot of future work to be done on tribal water
    rights issues in the State of California, let alone in the Owens
    Valley, and funding is needed to perform this work.
                    bia natural resources funding reductions

                                 FUNDED FIGURES
                            [In thousands of dollars]
    ------------------------------------------------------------------------
              Category               1991       1992       1994       1996
    ------------------------------------------------------------------------
    Water resources.............    $11,123    $10,353     $5,507     $3,682
    Total natural resources
     (including water resources)     79,992     78,041     64,224     53,489
    ------------------------------------------------------------------------

        The Commission requests that Congress increase the BIA's Water
    Resources funding to $10 Million in fiscal year 1998, with at least $1
    Million earmarked for California Tribes for each of the next five
    years. In addition, the Commission urges the House Appropriations
    Committee on Interior Appropriations to recognize the inequities in
    funding for California Tribes and provide per capita funding for
    California Tribes that is equal to the rest of the BIA-served Indian
    population.
                                     ______

      Prepared Statement of Jones Begay, President, Association of Navajo
                       Community Controlled School Boards

        I am honored to submit this statement on behalf of the Association
    of Navajo Community Controlled School Boards--an association of 13 BIA-
    funded schools on the Navajo Reservation operated by local tribal
    school boards under contracts or grants with the BIA. In addition to
    serving as President of the Association of Navajo Community Controlled
    School Boards, I am also a delegate to the Navajo Nation Council and am
    President of the Black Mesa Community School Board which operates a
    small school for 100 Navajo children in a very isolated area of the
    Navajo Reservation in Arizona.
        Our comments focus on the portions of the BIA School Operations
    budget most in need of your serious attention.
                             student transportation
         We need a significant increase in funding for this budget which
    supplies the funds for operation of our school bus systems. These funds
    are allocated on a per-mile basis, but the per-mile rate--currently at
    only $1.60--is far, far below the costs we incur. At Black Mesa, our
    100 students are scattered over a large geographic area that requires a
    daily bus run of just under 500 miles. Our buses run primarily on un-
    improved roads. This makes for a very long bus ride in both the morning
    and afternoon. Our bus driver costs, fuel costs and bus maintenance
    expenses are very high--far higher than $1.60 per mile.
        Our problems will get worse very soon, as the moratorium on
    increases in the school bus lease rate charged by GSA will soon end. We
    expect large increases in these lease rates.
        Funding for student transportation has never been sufficient to
    meet our costs. This means we must take scarce dollars from the funds
    you supply for our instructional programs to supplement student
    transportation. We have no choice. If we cannot bring the children to
    school, we cannot educate them.
        We ask you to significantly increase the BIA budget request for
    student transportation to a level that can provide us with the national
    average per-mile rate for public schools: $2.92 per mile.
                           administrative cost grants
        This is the budget that enables tribal school boards to exercise
    the Indian self-determination rights guaranteed by Congress. It funds
    our indirect and administrative costs. Without adequate funding in this
    account, tribal school boards do not have the funds they need to
    properly run the administrative responsibilities they take on when they
    decide to operate a school.
        BIA asks for an increase of $2.5 million for Administrative Cost
    Grants. This does not mean that individual schools Administrative Costs
    are increasing. Rather BIA seeks the increase because 12 more schools
    will convert from BIA operation to tribal operation in school year
    1998-99, the school year funded by the fiscal year 1998 budget request.
    Ten schools will convert to tribal operation in the upcoming school
    year.
        We are not sure that the $2.5 million increase will be sufficient
    to supply the Administrative Cost Grants of the ``converted'' schools
    because the BIA's budget does not explain how it was calculated. If it
    is not enough, all the existing schools will suffer a reduction in
    funding. We ask you to find out now if it is enough. Please do not wait
    for us to come back in two years to tell you it was insufficient.
    Severance costs
        When a school ``converts'' from BIA operation to tribal school
    board operation, two funding events occur: (1) the school becomes
    eligible for an annual Administrative Cost Grant; and (2) the BIA
    incurs a one-time severance cost for the federal employees who worked
    at the school. These severance costs must be paid even if these former
    federal employees are re-hired by the tribal school board.
        The BIA budget justification does not identify the amount of
    severance costs that will be incurred, nor does it state from which
    budget category the funds will be supplied. The BIA education law does
    not permit these severance costs to be paid from any of the funds
    Congress supplies for School Operations. The reason is, of course, that
    School Operations funds are intended for program and administrative
    costs of the schools, not for severance pay for former federal
    personnel.
        We ask you to include report language that reminds BIA it may not
    use ISEF funds, Administrative Cost grant funds, student transportation
    funds or any other School Operations monies for employee severance pay.
                      facilities operation and maintenance
        The federal government owns the buildings in the BIA school system.
    This means that Congress and BIA should be as interested as we are in
    making sure these buildings are maintained properly. But year after
    year, insufficient funds are provided for operation and maintenance of
    our federally-owned school buildings.
        Several years ago Congress ordered BIA to develop a formula for
    calculating the amount of funding that should be provided for
    facilities maintenance. For the past several years, we have received
    only about two-thirds of the amount this formula requires.
        When this happens, building maintenance is sacrificed. We cannot
    cut corners on our electricity bills, or water bills or heating bills.
    We have to pay these in full. And we must make sure our boilers and
    fire safety systems are operating properly and that the buildings are
    kept clean. This leaves very few dollars for preventive maintenance and
    minor repairs. When these do not get done, our buildings deteriorate at
    a fast rate.
        We ask that you increase the school facilities O&M budget by one-
    third (to $99 million) to preserve the investment the United States has
    made in these buildings.
                                teacher housing
        The final word I want to offer is about the need for decent housing
    for teachers at reservation schools. At Black Mesa, we have to supply
    housing for our teachers because there is no private rental housing
    available. This is the situation at nearly every school in the BIA
    system.
        We would be grateful if Congress could establish even a small
    recurring funding program for employee housing construction--perhaps
    $1-2 million per year. Without teachers, even the finest school in the
    BIA system would not be able to do its job. And without housing, we
    cannot recruit teachers.
        We thank you for your interest in the welfare of the Indian
    children in the BIA school system.
                                     ______

    Prepared Statement of Apesanahkwat, Chairman, Menominee Indian Tribe of
                                   Wisconsin

        On behalf of the Menominee Indian Tribe of Wisconsin, I wish to
    submit this statement on the President's fiscal year 1998 budget
    request for programs in the Bureau of Indian Affairs (BIA). Our
    specific concerns include: Adequate funding for Law Enforcement;
    funding for Road Maintenance above the President's requested level of
    $27.5 million; increased funding for Conservation--Other Rights
    Protection program; adequate funding for the tribal judicial systems;
    funding for Construction--Infrastructure Development; full funding of
    Contract Support Costs; funding Education--School Operations, at a
    minimum, the President's requested level of $467 million.
        As the Subcommittee may know, the Menominee Tribe was one of the
    recognized tribes terminated in the 1950's. Since regaining our federal
    recognition 20 years ago, we have endeavored to exercise our self-
    determination to achieve the self-sufficiency that is the goal of all
    tribes. We have made strides in improving the quality of life for our
    tribal members through careful management of our natural resources and
    economic development ventures such as the Menominee Nation Gaming
    Corporation. Yes, we are a gaming tribe but our business is only
    moderately successful--generating about $750,000 a month in revenue.
    The Menominee Tribe utilizes this much needed income to not only
    supplement federally-funded programs but to fund programs for which
    there are no other available resources. Some examples of uses for these
    revenues include: solid waste disposal ($500,000/yr.), graduate
    scholarships ($62,9000/yr.), tribal and youth recreation programs
    ($360,500/yr.), and infrastructure development ($2 million since 1994
    for water and sewer systems in the new Middle Village tribal housing
    development, community-wide road projects and updated telephone system,
    etc.).
        We are, however, experiencing increased demands on these limited
    revenues due to decreased funds from the state and/or county in areas
    such as welfare assistance and support for the public library located
    on our reservation. We bring these matters to your attention to
    highlight that while self-sufficiency is our goal, we require the
    continued assistance of the federal government through adequate funding
    of the federal programs we operate for the benefit of our tribal
    members.
                            bureau of indian affairs
        Tribal law enforcement.--The Menominee Police Department is a 38-
    member force, funded by $866,200 through the BIA and supplemented by
    $1.23 million in tribal funds. Still this amount is not adequate for
    providing the level of public safety and enforcement of tribal,
    federal, and state laws necessary for the size of our community--which
    covers 360 square miles and serves a tribal population of over 4,000
    members. As noted above, tribal revenues are limited and the need to
    supplement other programs increases with each fiscal year. We,
    therefore, request that Congress support, at a minimum, the
    Administration's request for a general increase of $46.7 million to the
    Tribal Priorities Allocation (``TPA'') account, which includes an $8.7
    million increase for law enforcement.
        Road maintenance.--The Administration's request of $27.5 million
    for Road Maintenance shows only a small increase--less than $2 million
    over the amount for the past two fiscal years, and still less than one-
    third of the annual need in Indian country. Funds in this line item are
    not only utilized for routine maintenance and administration of roads,
    but also for maintenance of bridges, airstrips, ferry boat operation
    and maintenance and emergency maintenance (snow removal, ice control,
    washout repair, etc.). The transfer of Road Maintenance to the Tribal
    Priority Allocations account has negatively impacted the availability
    of funds. In fiscal year 1997, the Menominee Tribe suffered a 16
    percent decrease in Roads funds. Coupled with extreme weather
    conditions and heavy snowfall, we now face extreme funding problems as
    we have only $10,000 balance for the remaining half of the fiscal year.
    With these remaining scarce dollars, we seriously doubt the Menominee
    Tribe will be able to maintain its 308 miles of BIA roadway in
    accordance with the mandates of Federal Highway Safety guidelines.
        We would urge Congress to fund Road Maintenance at 100 percent of
    need to enable tribes to address the backlog, and to order Road
    Maintenance removed from TPA.
        Other rights protection.--The Menominee Conservation Department is
    charged with establishing and enforcing the tribal hunting laws within
    the boundaries of the reservation. This area encompasses over 235,000
    acres, with 80 lakes and more than 300 miles of rivers and streams. The
    Conservation Department also conducts wildlife studies, direct fish and
    wildlife management projects and conduct research projects. These
    activities not only ensure the protection and conservation of our
    natural resources but will also, hopefully, reclaim some of the
    traditional food sources of the Menominee. Currently, the Conservation
    Department is comprised of six game wardens, one Fish and Wildlife
    Biologist/Manager and one support staff, operating on a budget of
    $375,000 (one-third of which amount is provided by the tribe).
        In order to adequately enforce the laws and properly manage the
    Tribe's natural resources, we request that Congress increase funds for
    this vital program.
        Tribal courts.--We have testified previously on the need to
    properly fund the tribal court systems. As you may recall, the Indian
    Tribal Justice Act, Public Law 103-176, was enacted to provide
    additional resources for the development and enhancement of tribal
    judicial systems. Unfortunately the Bureau has never requested
    additional funds for tribal courts as authorized by Public Law 103-176
    and the Special Tribal Courts program has been eliminated. Furthermore,
    even if Congress funds Tribal Courts at the Administration's requested
    level of $11.1 million, it would be $3 million less than the fiscal
    year 1995 enacted level. The Menominee Tribe, like many other Indian
    nations and courts in general, is facing increased burdens on the court
    due to a rising number of cases and understaffing. In spite of the
    approximately $217,000 tribal supplement to the Tribal Court budget, we
    are not able to adequately meet the need. We ask this Subcommittee to
    continue to assist all tribes in meeting the judicial needs of their
    people by appropriating an increased and specified funding level for
    Tribal Courts apart from the TPA account.
        Construction.--A critical need for many tribes is in the area of
    infrastructure development, e.g. water and sanitation systems, new
    roads, installation of utilities. As you are no doubt aware, many
    tribes, including the Menominee, are faced with increasing
    populations--due to an influx of tribal members returning to the
    reservation, an increased birth rate and increased longevity. We
    recommend that the Subcommittee consider a separate funding category
    under the Construction account for infrastructure development
    initiatives.
        Contract support.--The Menominee Tribe is disappointed that the
    Administration only requests $105.8 million for Contract Support Funds
    (CSF), as funding at this level would not fully fund the need.
    According to the Bureau's Budget Justification, the $105.8 million
    would enable the BIA to pay only 95 percent of the CSF need. In fiscal
    year 1997 they paid only 87 percent of need. Every time CSF is not
    fully funded, our programs suffer.
        The Indian Self-Determination Act is clear that the Secretary must
    fully fund contract support cost needs. The transfer of CSF to the
    Tribal Priority Allocations account merely masks the true level of need
    since tribes must make up for contract support cost shortfalls by using
    direct program funds. In doing so, we diminish services in those
    programs. We urge that Congress fully fund this essential program cost
    as required by law.
        Education--school operations.--The Menominee Tribe urges Congress
    to fund, at a minimum, the Administration's requested level of $467
    million for School Operations. The Menominee Tribal School, a tribal
    contract school, serves 248 students in grades K to 8. We note that
    although the requested level may result in a nominal increase to the
    amount per student we receive for each student, there will continue to
    be severe funding shortages in the Transportation and Facilities
    Operation and Maintenance activities. We hope Congress will improve the
    Administration's request and supply additional funding for these
    critical activities.
        The Menominee Tribe appreciates the support this Subcommittee has
    given to our Tribe over the years and thank you for the opportunity to
    provide our views on the proposed fiscal year 1998 budget for the
    Bureau of Indian Affairs.
                                     ______

      Prepared Statement of W. Ron Allen, President, National Congress of
                                American Indians

                                  introduction
        Greetings Chairman Gorton, Senator Byrd and distinguished members
    of the Interior and Related Agencies Appropriations Subcommittee. On
    behalf of the National Congress of American Indians and our 200 plus
    member Tribes, I appreciate this opportunity to submit testimony
    regarding the President's budget request for fiscal year 1998 Indian
    programs and services under this subcommittee's funding jurisdiction.
    My name is W. Ron Allen. I am President of the National Congress of
    American Indians (``NCAI''), the oldest and largest Indian organization
    in the nation devoted to protecting Tribal sovereignty, and Chairman of
    the Jamestown S'Klallam Tribe located in Washington State.
                             background information
        Mr. Chairman, it has rarely, if ever, occurred that programs
    serving the American Indian and Alaska Native population have received
    the federal funding required to fulfill even the most basic needs of
    tribal members. American Indians and Alaska Natives rank at the bottom
    of most social and economic indicators. Of the 557 federally-recognized
    Indian Tribes, a great majority of their populations are characterized
    by severe unemployment, high poverty rates, ill-health, poor nutrition
    and other sub-standards living conditions. In 1989, the average
    unemployment rate in Indian Country was 52 percent, and by 1990 the
    rate had jumped to 56 percent.\1\ The 1990 Census shows the percentage
    of Indian people living below the poverty line is 31.6 percent, or
    three times the national average.
    ---------------------------------------------------------------------------
        \1\ See generally ``1990 Census Population--Characteristics of
    American Indians by Tribe and Language,'' U.S. Department of Commerce,
    economic and Statistic Administration, Bureau of the Census.
    ---------------------------------------------------------------------------
        Tribes have faced extraordinary challenges throughout the
    appropriations process in recent years. Unprecedented reductions in
    federal Indian program funding have left many Tribes facing extreme
    circumstances. Non-funding riders attached to Interior Appropriations
    bills reached well past the scope of the appropriations process and
    attempted to diminish Tribal sovereignty and change the basic fabric of
    the federal-tribal relationship. Further, while we appreciate the
    commitment to balance the federal budget, we maintain that such a
    laudable initiative does not and should not preclude the federal
    government from fulfilling its trust responsibilities to Indian Tribes
    throughout this great nation. As Congress begins to shape the fiscal
    year 1998 budget, the NCAI urges the reversal of the downward direction
    the annual appropriations process has taken on Indian programs. We
    believe that the President's fiscal year 1998 budget request has taken
    a very positive step in that direction.
                the president's fiscal year 1998 budget request
    A. Bureau of Indian Affairs
        The President's fiscal year 1998 budget calls for $1.7 billion to
    be allocated to the BIA, an increase of $127 million over the 1997
    enacted levels. As important as these increases in funding are to
    Tribes, and despite the apparent commitment to Tribal self-governance,
    this increase is but a mere step in the direction of providing adequate
    funding and only begins to correct the recent unprecedented reductions
    in critical tribal programs.
        Tribal priority allocations.--Tribal Priority Allocations (TPA),
    the mainstay in the BIA budget for Tribal operations funding, were
    decreased by nearly $100 million in fiscal year 1996. This occurred
    during the same cycle that over $200 million in programs and services
    were shifted from other areas of the BIA budget into TPA in an effort
    to give tribal governments more control over those tribal operations.
    The President's fiscal year 1998 budget for TPA is $757.3 million, an
    increase of $76.5 million over the fiscal year 1997 enacted level. The
    majority of these increases are earmarked for Tribal Government
    Operations and Human Services, which combined cover a broad spectrum of
    services provided at the Tribal level for its communities, children and
    families, elderly and poor, and government operations such as police
    and fire protection. Of special concern to our member Tribes is the
    lack of funding for the Indian Tribal Justice Act (Public Law 103-176)
    and the Indian Child Protection and Family Violence Prevention Act
    (Public Law 101-630, Title IV), both considered ``New Starts'' under
    current Congressional budget categorization, for which no funding is
    appropriated. We urge this Congress to consider the mounting needs for
    these programs, especially their significance in supporting a Tribe's
    ability to implement welfare reform in Indian Country, and fund these
    line-items at their authorized levels. Mr. Chairman, TPA funding in
    particular must be increased in order to improve the quality of life
    for Indian communities.
        BIA construction.--The NCAI urges support of the President's
    request of $125 million for Construction funding. Our schools, courts,
    police and fire departments all have facilities that are in desperate
    need of repair or replacement. Many Tribal communities are still
    awaiting much needed new construction project funding to rehabilitate
    or replace these and other facilities, including dams and other
    resource projects. Every year, these facilities face increased safety
    hazards that must be addressed through proper maintenance and re-
    engineering projects. The President's request for BIA Construction
    projects is a step in the right direction.
        Indian trust funds.--Management of Indian Trust Funds is in dire
    need of reform. Without a commitment from the Administration and
    Congress that ensures adequate funding levels and that oversight is
    provided, the overwhelming amount of mismanaged and unidentified trust
    fund accounts over the last 50 years will never be reconciled. It is in
    the best interest of all parties that the reconciliation of Individual
    Indian Monies (IIM) accounts and trust land asset accounts are
    resolved.
        The Office of Special Trustee for American Indians (OSTAI) has
    submitted a draft strategic plan for trust fund management. This plan
    would fundamentally change the way trust activities are managed by the
    federal government. The Special Trustee has recommended that all trust
    management duties, responsibilities and activities including Trust
    Resources Management, Trust Funds Management and Land Title and Records
    Management be carried out by a new federal government sponsored entity
    that would exist outside of the Department of Interior. This strategic
    plan has gone far beyond its initial mandate to review the financial
    condition of Indian trust accounts. NCAI would urge the Committee to
    not support this plan until complete and meaningful consultation has
    occurred with Tribal governments.
        Indian education.--NCAI joins with the Administration and the
    Congress in renewing our country's commitment to education and in
    supporting ambitious elementary and secondary education proposals. NCAI
    also welcomes the significant investment in Indian education. The $500
    million request, which represents an increase over fiscal year 1997
    enacted levels, will help meet some of the needs of Indian students
    attending Bureau-funded schools. The increase of $16.8 million over
    fiscal year 1997 for School Operations will help the Bureau deliver
    quality education, provide safe transportation, and convert Bureau
    operated schools to grant schools. However, the funding levels for
    other primary and secondary Indian education programs fail, once again,
    to meet the growing needs of our Indian students attending Bureau-
    funded schools.
        Major educational programs that further opportunities for learning,
    enhance the learning environment of Indian students, and merit
    particular attention include: Adult Education--with the elimination of
    OIE's adult education program, BIA adult education must at least be
    funded at $4 million; Johnson O'Malley (JOM)--the real need in JOM is
    $54 million which will help alleviate current program funding
    restraints heightened by a 5 percent increase in JOM students in fiscal
    year 1997; Indian Student Equalization Program (ISEP)--the $296 million
    request will provide $3,094 per Weighted Student Unit (WSU). This per
    student outlay is significantly below the average per student
    expenditure of public elementary and secondary schools which had a
    $6,300 per student outlay in school year 1995-96; Replacement School
    Construction--$14 million is requested, an increase of $10 million over
    fiscal year 1997 which is needed for completion of the Many Farms High
    School. Although we support this project, we urge additional funding
    for the construction of additional new schools; Facilities Improvement
    and Repair (FI&R--$32.2 million is requested for education FI&R which
    will help to address the material weakness in Bureau schools. However,
    additional funding is still needed to address the current backlog of
    over $600 million in this program. The NCAI supports the National
    Indian Education Association (NIEA) statement to this Subcommittee on
    the President's fiscal year 1998 budget as it affects Indian Education.
        Cultural and historical preservation.--The Native American Graves
    Protection and Repatriation Act, Public Law 101-601 (NAGPRA), provides
    the legal basis for the return of sacred objects and human remains, as
    well as for the protection of burial sites, and is critical in
    correcting many errors of the past and present. However, NAGPRA cannot
    bring about a better future until adequate funds are appropriated so
    that Tribes can complete the repatriation process, and continue to
    protect our people's heritage. Despite a continual joint Tribal-museum
    request of $10 million from fiscal year 1994 through fiscal year 1997,
    Congress has appropriated only a fraction of that amount--$2.3
    million--for NAGPRA related grants. This funding level is far below the
    projected need to comply with the provisions of the Act and well below
    the $10 million request. The President's fiscal year 1998 budget
    request of $2.3 million must be increased by Congress in order for
    Tribes to implement the goals of NAGPRA.
        Many of our member tribes also rely on the protections available
    under the National Historic Preservation Act, Public Law 89-665 (NHPA).
    There are currently 14 tribes which have signed agreements with the
    National Park Service regarding the assumption of State Historic
    Preservation Offices (SHPO) duties. That number is expected to triple
    within the next year with more Tribes continuing to take on the role of
    SHPO'S. This activity alone supports the need for increased funding,
    however NHPA allocations fell from $2 million in fiscal year 1996 to
    $1.8 million in fiscal year 1997. In order to preserve our nations vast
    history and the cultural traditions of our people, the President's
    fiscal year 1998 budget request of $2.3 million must be supported by
    Congress as the minimum standard funding level to allow Tribes to carry
    on this important work.
        National Indian Gaming Commission (NIGC).--The NIGC performs
    critical functions in overseeing Tribal gaming operations and should be
    funded at an annual appropriation of $10 million. The NIGC receives
    $1.5 million annually from fees on Class II gaming and receives
    approximately $1 million from appropriations. The NIGC has been
    functioning at approximately a $4.2 million annual operating expense
    level, but this level of funding is threatened because the NIGC will
    run out of start-up monies in fiscal year 1997. Under this scenario,
    the NIGC will have a $1.7 million deficit in fiscal year 1998. In order
    to remedy this situation, the $1.5 million dollar cap on fees from
    Class II gaming should be removed, and fees should be extended to Class
    III gaming. If the cap is not removed, the Administration contributions
    should be increased to $2.7 million in order to maintain the current
    minimum operations. The NIGC has the regulatory authority that is
    necessary and appropriate to ensure that Tribal gaming can continue
    with the same exemplary record that it has compiled to date. In the
    absence of adequate funding, NIGC's abilities to meet its
    responsibilities will be severely impaired, and the future of Tribal
    gaming will be at risk.
    B. Indian Health Service
        Funding for the Indian Health Services (IHS) is allocated in two
    distinct categories--Services and Facilities. The President's fiscal
    year 1998 budget request of $2.1 billion for the IHS is a marginal
    increase over the fiscal year 1997 enacted levels; however,
    approximately $367 million more is needed to restore the funding
    decreases over the past few fiscal years. These reductions have led to
    an increase in unmet needs surrounding mandatory costs, mandatory
    contract support, facility construction costs, and inflationary costs
    under Contract Health Care programs and must be rectified.
        IHS services.--The President's $1.8 billion request is a $29
    million increase over the fiscal year 1997 enacted level. Although
    Services funding continues to show marginal increases every year, these
    slight increases do not meet the current needs of approximately $2.04
    billion. It is estimated that nearly half of the nation's Indian
    population live in the urban areas of this country. Tribal governments
    continue to share in the duties and responsibilities of providing
    health care for those individuals living in urban areas in conjunction
    with the federal government. For these reasons it is critical that our
    clinical services, including hospitals and health clinics, as well as
    our preventative health care programs receive adequate funding to keep
    pace with the increased needs of our service area populations, both in
    the Tribal communities and the urban areas.
        For example, the IHS budget for the HIV/AIDS program does not cover
    the cost of drugs to treat Indian people infected with HIV. We are
    aware that the cost of these drugs is significant; however, we are also
    concerned that Indian people infected with HIV whose only source of
    medical care is the IHS may not receive proper care if they and their
    physicians do not have access to these life-saving drugs. NCAI
    recommends a restricted line item in the IHS budget that covers the
    cost of AIDS-related medications.
        IHS facilities.--The President's request for $300 million for IHS
    Facilities--an increase of nearly $39 million over last year, is a
    welcomed change in the direction of Facilities funding. However,
    funding levels for IHS Facilities must be increased to approximately
    $149 million in order to maintain health care facilities in Indian
    Country. Tribes have reported that facilities are struggling to keep
    pace with the needs of the service areas. Old facilities are in need of
    major improvements and some service areas require the erection of new
    facilities. I urge this Congress to make one of its goals the renewed
    support for increased health care facilities in Indian Country and to
    start this commitment by supporting the President's fiscal year 1998
    budget request for IHS Facilities.
        Indirect costs.--Although funding levels for the Indian Health
    Services have gradually increased over the last two years, changes in
    allowable costs associated with these operations have created
    additional financial burdens on Indian health care systems. Of concern
    to every Tribal program manager was Congress' elimination of funding
    for indirect costs associated with the administration of Indian
    programs and services. This action, which began with the passage of the
    fiscal year 1995 Rescissions bill and continued through the fiscal year
    1996 appropriations process, creates substantial reductions (up to one-
    third in some cases) in actual operating budgets. Indirect costs
    associated with health care services are inherently higher than other
    areas of operation. In the non-Indian communities, health care
    operations were better able to absorb these indirect cost restrictions
    by passing on those additional costs to the states, their patients, and
    other forms of cost reimbursements. Tribes do not have this ability and
    are forced to absorb these costs by eliminating or reducing funding for
    other tribal operations.
        Welfare reform.--Federal welfare reform has created an even greater
    need for Tribal governments to directly administer certain Medicaid and
    other welfare services closely tied to the health care arena. IHS must
    provide technical assistance and other support funding for Tribal
    governments faced with developing new Tribal programs and services, or
    operating through state initiated programs that do not meet the unique
    needs of Indian people. Direct funding for these new Tribal programs
    will protect the ability of Tribal governments to provide for their
    members.
                                   conclusion
        Mr. Chairman, we urge the Congress to fulfill its fiduciary duty to
    American Indians and Alaska Native people and to uphold the trust
    responsibility as well as preserve the Government-to-government
    relationship, which includes the fulfillment of health, education and
    welfare needs of all Indian Tribes in the United States. Tribes
    throughout the nation relinquished their lands as well as a great
    multitude of resources in exchange for this trust responsibility. The
    President's fiscal year 1998 budget acknowledges the fiduciary duty
    owed to Tribes. We ask that the Senate consider the funding levels in
    the President's budget for the Department of Interior and Related
    Agencies as the minimum funding levels required by Congress to maintain
    the federal trust responsibility and by Indian Country to continue on
    our journey toward self-sufficiency. This concludes my statement. Thank
    you for allowing me to present for the record, on behalf of our member
    tribes, the National Congress of American Indians' initial comments
    regarding the President's fiscal year 1998 budget.
                                     ______

     Prepared Statement of Ted Strong, Executive Director, Columbia River
                          Inter-Tribal Fish Commission

        Mr. Chairman, on behalf of the Columbia River Inter-Tribal Fish
    Commission (CRITFC), thank you for the opportunity to present the
    Commission's views on how the budget for the Bureau of Indian Affairs
    (BIA) should be structured to meet tribal fishery resource needs. For
    fiscal year 1998, the CRITFC has identified needs totaling $9,506,433
    for Columbia River fisheries management and associated programs, an
    increase of $7.014 million over the fiscal year 1997 appropriated level
    of $2.493 million. The total needs identified includes continued
    funding for fisheries management, the Columbia River tribes' planning
    efforts involving the Columbia River Gorge Scenic Act, Columbia River
    Habitat Programs, Columbia River Endangered Species Program, and
    critical Watershed Restoration activities, as well as past under-
    recovered pay cost adjustments, totaling $103,903, mandated by law. In
    addition, the administration has proposed, and we support, funding
    enforcement activities at ``in-lieu'' fishing access sites at $250,000
    in fiscal year 1998. Finally, the Columbia River tribes receive funding
    for participation in the Pacific Salmon Treaty process, consistent with
    annual recommendations of the U.S. Section of the Pacific Salmon
    Commission. We support the U.S. Section recommendation for fiscal year
    1998, at the funding level of $3,152,046 for the Pacific Salmon Treaty
    program in the BIA, with CRITFC and its member tribes to receive
    $861,305 of that amount, plus fiscal year 1997 and fiscal year 1998 pay
    cost adjustments.
                   direction to interior and related agencies
        In addition to the funding levels identified above, we ask that you
    direct the Bureau of Land Management, United States Forest Service,
    National Biological Survey, and the U.S. Fish and Wildlife Service to
    enter into cooperative agreements or 638 contracts as provided for
    under Public Law 103-413, with the CRITFC and with each of the
    individual member tribes in order to provide funding for coordination,
    participation, and project implementation under the several recovery
    plans. Each of the listed federal agencies has had several years during
    which to apply appropriated funds to implement authorized programs that
    would provide for healthy and sustainable fisheries; the tribes believe
    that it is now time for them to be given the opportunity to reach this
    goal.
                               mission statement
        The 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. Since 1979,
    the CRITFC has contracted with the BIA under the Indian Self-
    Determination Act (Public Law 93-638) to provide this technical
    support. 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 Commission's technical experts, in coordination with the tribes'
    technical experts, have identified where the land and water managers as
    well as state and federal fishery managers have fallen short in
    protecting and restoring the habitat and production of all salmon
    stocks and we have, at the request of the tribes, provided
    recommendations for correcting management practices that have led to
    the loss and destruction of salmon and its habitat. The tribes'
    restoration plan documents the threats to their 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. The tribes' ultimate goal is to restore a sustainable
    resource for the benefit of all peoples in the Pacific Northwest, the
    following programmatic descriptions briefly describe how the tribes
    hope to achieve that goal.
                        watershed restoration cost share
        For the Fisheries Services programs, $5.5 million of the proposed
    increase is for the watershed-based salmon restoration program. The
    tribes have identified $30 million in habitat restoration work that
    must take place in the Columbia River Basin in order to begin to
    restore salmon populations. Of this work, about half is located on
    tribal reservations and ceded lands; therefore, the tribes must be
    prepared to manage and administer at least $15 million in watershed
    restoration activities, and will need to provide the required 25
    percent match. The $30 million will come from regional sources, for
    example, from the Northwest Power Planning Council's Fish and Wildlife
    Program funded by the Bonneville Power Administration. So, out of the
    $5.5 million, $3.75 million will provide the required 25 percent match
    for $15 million of tribal watershed restoration activities. That is,
    every dollar provided through appropriations for this program will
    leverage a three dollar match from regional funds. The cost share
    monies will go directly to tribal governments implementing projects. Of
    the balance of the $5.5 million, $1 million will be used to support
    building tribal capacity to administer and manage the habitat
    restoration activities and $750,000 will be used to direct a Columbia
    Basin habitat monitoring program to monitor the effectiveness of the
    $30 million in watershed projects. In lieu of the $3.75 million
    identified for BIA cost-sharing on watershed restoration projects, the
    Bureau of Indian Affairs could facilitate efforts between each of the
    four tribes and their Commission and the Bureau of Land Management,
    United States Forest Service, National Biological Survey, and the U.S.
    Fish and Wildlife Service to enter into cooperative agreements or 638
    contracts as provided for under Public Law 103-413, in order to provide
    funding for this cost share.
                         watershed restoration outreach
        An important aspect of implementing the watershed restoration
    program throughout the Columbia River Basin will be explaining the
    benefits of the program to the potential partners in out year programs.
    The tribes believe that additional benefits might be realized through
    private corporations or citizens participating in the watershed
    restoration effort, either directly through identified projects or
    through the independent development of complementary projects.
    Developing and encouraging this type of participation, as well as
    explaining the benefits of the underlying program, will require
    extensive public outreach efforts. The estimated cost for this
    component is $200,000 for fiscal year 1998.
                   columbia river endangered species program
        In January 1991, at the Bureau of Indian Affairs' request, the
    Commission submitted an assessment of our foreseeable needs regarding
    outstanding hunting and fishing rights. We requested $600,000 for
    determining the proper allocation of the conservation burden among all
    sources of salmon mortality in the Columbia and Snake basins and
    $400,000 for implementing hatchery production reform. The majority of
    these funds are to be distributed to the tribal fishery programs, with
    the remainder to the Commission for coordination and additional
    technical support. These programs represent on-going needs; thus far
    only $300,000 has been provided under the Columbia River Endangered
    Species Program, leaving an unmet need of $700,000. The tribes and
    Commission would utilize the balance of the funds consistent with both
    salmon restoration plans and our on-going programs.
                        enforcement at ``in-lieu'' sites
        Under Public Law 100-581, the Congress authorized the U.S. Army
    Corps of Engineers to acquire and develop access sites and facilities
    along the Columbia River to replace usual and accustomed fishing places
    inundated as a result of the construction of Bonneville Dam, known as
    ``in-lieu'' sites. Once these in-lieu sites are acquired and developed
    by the Corps, they will be turned over to the Department of the
    Interior, Bureau of Indian Affairs, for administration as Treaty
    Fishing Access Sites. Administration of these sites will involve
    increased enforcement responsibilities, which is estimated at $250,000
    for fiscal year 1998.
                        protection of cultural resources
        Under the several salmon restoration plans being reviewed for
    implementation in the Columbia River basin, there are several proposals
    that will affect river operations, ranging from reservoir pool draw
    downs to naturalized river flow options. Under any of these scenarios,
    river level elevations will decline, leading to exposure of tribal
    cultural sites, including tribal burial sites. Protection of these
    cultural and religious resources, including criminal and civil
    penalties, are provided pursuant to the Archaeological Resources
    Protection Act and the Native American Graves Protection and
    Repatriation Act. The additional costs associated with enforcement
    activities to protect these resources are estimated at $500,000.
        As for the Commission's ongoing programs, the work of the
    Commission's staff is being undermined by the manner in which the
    Bureau of Indian Affairs is providing funds for the indirect costs of
    these programs:
    Contract support/indirect costs
        Each of the last three years, indirect cost reimbursement to the
    CRITFC has fallen between $80,000 to $100,000 below legislated levels.
    We are concerned that this shortfall will continue to increase, unless
    Congress takes action to ensure that contract support requirements are
    fully financed.
        Current estimates indicate the BIA will have a 10 percent shortfall
    in paying indirect costs for 1997.--While a separate fund has been
    established to provide indirect cost reimbursements for new contracts,
    indirect cost funds for ongoing contracts still fall far short of
    program requirements. This continuing trend has serious ramifications
    for the Commission's operations, such as deferring computer equipment
    purchases, and curtailing support services needed to meet the
    organizational mission.
        In addition, indirect cost shortfalls have the effect of amplifying
    the Commission's indirect cost rate due to the under-recovery of
    indirect costs. That is, the Commission operates with an indirect cost
    recovery deficit and must attempt to cover that deficit when applying
    for other federal and non-federal grants in order to have the
    capability to support the grant project. On the other hand, if the BIA
    provides full indirect cost reimbursements on BIA funds, our indirect
    cost rate will be dramatically reduced and we will be better able to
    persuade other governmental and non-governmental entities to provide
    program funding.
    Pay-cost adjustments
        Add $103,903 to provide for under-recovered pay cost and inflation
    for adjustments for 1992, 1993, 1994, 1995, and 1996. Direct BIA to
    insure that all Public Law 93-638 contracts are treated in accordance
    with these annual adjustments.
        Several years ago the Committee directed the BIA to stop ignoring
    the Commission contract in making the normal annual pay cost and
    inflation adjustments being afforded BIA operations and other Public
    Law 93-638 contractors. For a number of years the BIA complied, prior
    to 1992. While the BIA has provided pay cost adjustments for fiscal
    year 1997 and fiscal year 1998, we would ask that the Committee direct
    the BIA to provide full adjustments for the fiscal years 1992, 1993,
    1994, 1995, and 1996.
        Finally, only last week we received a copy of the draft ``Strategic
    Plan to Implement Reforms Required by the American Indian Trust Fund
    Management Reform Act of 1994.'' While certain aspects of the draft
    plan may have merit, we are concerned that it still require
    considerable study. Relative to this Commission's primary mission, we
    are concerned about the new proposal in the draft plan to create an
    independent organization--outside the Department of the Interior--to
    assume all trust asset management functions. How this might relate to
    fishery resources is unclear; in fact, there are many unanswered
    questions. Clearly, this proposal requires considerable review and
    examination by the tribes. We believe that appropriations to fund
    implementation of those parts of the plan that relate to removing
    functions from the Bureau of Indian Affairs should not be provided
    until the tribes have had a full opportunity to review and evaluate
    that plan. We expect that our member tribes will continue to review and
    actively participate with other tribes in evaluating this draft plan
    and that they will communicate with you further as this draft plan
    moves forward.
        Mr. Chairman, in summary, we believe that the Commission is an
    excellent working model of the Indian Self-Determination Act. Through a
    governing body of leaders from four tribes working together to protect
    their treaty fishing rights and a staff of biologists, hydrologists,
    law enforcement personnel, and other experts advising tribal policy-
    makers, this Commission has demonstrated that tribes are able to take
    the lead on natural resource issues, provided that adequate resources
    are available. We are asking for your continued support of our efforts.
    We trust the Subcommittee will take these concerns into account when
    considering the fiscal year 1998 Bureau of Indian Affairs budget. We
    are prepared to provide any additional information you may require in
    analyzing the BIA's budget.
                                     ______

    Prepared Statement of Wm. Ron Allen, Commissioner, U.S. Section of the
                           Pacific Salmon Commission

        Mr. Chairman, my name is Ron Allen, I am the tribal Commissioner
    representing the United States of America on the Pacific Salmon
    Commission. For the record, I have provided the executive summary of
    the proposed budget prepared by the U.S. Section Budget Committee for
    implementation of the Treaty. It details budgets for Tribal, Federal,
    and State agencies involved in the Treaty. The U.S. Section has
    identified a required funding level of $3,152,046, plus pay cost
    adjustments for fiscal year 1997 and fiscal year 1998, for tribal
    research projects and participation in the United States/Canada Pacific
    Salmon Treaty process for fiscal year 1998. These program
    recommendations have been integrated with those of the state and
    federal agencies so as to avoid duplication of effort and provide for
    the most efficient expenditure of scarce funds. In the BIA's budget in
    past years, these funds have been allocated between Self Governance
    compacts and the United States/Canada Pacific Salmon Treaty line item.
    This year, in a move endorsed by the U.S. Section, the BIA will
    transfer $924,000 from the self governance compacts back to the Salmon
    Treaty account. Please note that this amount falls $134,046 short of
    the amount necessary to fully restore this account. This is due to
    recent cuts in self governance funding. In order to ensure the
    effective implementation of the United States/Canada program, the U.S.
    Section recommends that this committee, in addition to the base
    transfer, restore the additional $134,046 to our base funding, thereby
    funding the United States/Canada account at $3,152,046 in fiscal year
    1998. I would note that, at that amount, you would only be restoring
    this program to its fiscal year 1995 combined funding level.
        The United States and Canada established the Pacific Salmon
    Commission, under the Pacific Salmon Treaty of 1985, for the purposes
    of conserving salmon stocks, providing for the optimum production of
    salmon stocks, and controlling salmon interceptions. While the first
    few years of the Treaty provided tangible benefits for both countries,
    the Commission's work has become increasingly difficult over the last
    few years: the status of some of chinook and coho stocks originating in
    Washington, Oregon, Idaho, and British Columbia continues to grow worse
    while the demands to maintain culturally and economically important
    fisheries increases. The Commission could not meet one of these needs
    without sacrificing the other. While both country's managers agreed
    that conservation needs should be addressed first, we found it
    increasingly difficult--if not impossible--to agree on which fisheries
    should bear the sacrifice necessary carry out that responsibility. In
    the last year, though, we have initiated two important changes: within
    the United States, we have adopted an abundance based approach for
    chinook management; with Canada, we have embarked upon a ``Regional
    Stakeholders Process'' in an attempt to resolve our ongoing debate over
    ``Equity'' under the Treaty.
        Until the last two years, the United States watched in frustration
    as Canada ignored our requests for significant harvest reductions in
    Canadian fisheries harvesting U.S. origin coho, and chinook. This
    stance by Canada only increased the pressures on harvest management
    within the U.S. Chinook conservation concerns, particularly for stocks
    originating in Idaho, Oregon, and Washington, finally resulted in a
    lawsuit within the United States in 1995. This lawsuit was the result
    of the United States and Canada's inability to develop a more
    responsive chinook management regime, one that took into account the
    annual fluctuations in the abundance of stocks. The tribes and the
    states of Washington and Oregon, through litigation, enjoined Alaska's
    chinook fishery in 1995, while Canada undertook some chinook harvest
    reductions as well. These actions addressed the chinook conservation
    requirements in the short term, but left many questions unanswered.
        In 1996, the U.S. Section, after lengthy negotiations, adopted an
    internal agreement on how to manage the Southeast Alaska chinook
    fishery, utilizing an abundance based management mechanism. We only
    took this step in the United States after negotiations with Canada did
    not provide us with a coastwide management mechanism. The approach
    adopted by the United States allows for the harvest of chinook to go up
    in Southeast Alaska as the aggregate abundance of stocks increase, but,
    equally important, this approach reduces the allowable harvest as the
    aggregate stock abundance goes down. In this way, the United States
    hopes to be able to more proactively address conservation concerns for
    chinook stocks in U.S. fisheries. But because this effort cannot work
    without Canada's participation, it is our intention to negotiate a
    compatible management regime for Canadian fisheries through the Salmon
    Commission process, using our agreement as a starting point.
        As for Equity, the United States proposed and Canada agreed to use,
    a regional forum to address our continuing debate over how to implement
    this important Treaty principle. Under this approach, we have enlisted
    fishers, the people that know the fisheries and their problems the
    best, to provide us with recommendations on how to resolve the several
    long standing issues in this area. Using one group for Alaskan and
    Northern British Columbia fisheries and another group for Southern
    British Columbia and Fraser River fisheries, the parties have tasked
    these fishers with reviewing past management regimes and asked them to
    come back with innovative solutions. While they will be struggling with
    difficult issues, I believe there is reason to be optimistic about
    solutions coming out of this process.
        Mr. Chairman, considering the explanations I have just provided for
    some of the things you may have heard, the signing of the United
    States/Canada Pacific Salmon Treaty must still be recognized as an
    essential step forward for the conservation and enhancement of the
    truly renewable salmon resource of the Pacific Northwest, Alaska, and
    Canada. Under the Treaty, both countries committed themselves to a
    coastwide rebuilding program for chinook salmon stocks, to the
    conservation of the coho stocks of both countries, and to a harvest
    sharing of Fraser River sockeye and pink salmon stocks in order to
    provide for stable United States and Canadian harvests. Even with the
    difficulties outlined above, the Commission continues to work towards
    those goals. There is no doubt that the resource would be in much worse
    shape today had the Treaty not been in place for the last ten years.
    Prior to this Treaty, fish wars often erupted with one or both
    countries overharvesting fish that were returning to the other country,
    to the detriment of the salmon resource. Now, under the Treaty, we
    share a mutual commitment--if at times a rocky one--with Canada to
    rebuild chinook stocks, to conserve salmon populations coastwide, and
    to insure that each country is receiving the benefits of its salmon
    production.
        Especially in years of difficult negotiations, you should recognize
    that the information provided by the programs becomes even more
    critical from a management perspective. When there is no agreement
    between the United States and Canada, the burden on U.S. resource
    managers of domestic fisheries increase by well more than twofold--
    without adequate technical information, they must take much more
    conservative management actions to avoid overfishing the stocks.
        Beyond our budget recommendations, it is important to remember that
    a primary consideration of Pacific Salmon Treaty negotiators was that
    the Treaty would allow for both the United States and Canada to proceed
    with planned enhancement activities. You should recognize that
    additional funding should be provided, as promised at the time the
    Treaty was signed, to carry out these enhancement activities. Within
    the region, we are developing cooperative arrangements to further
    region-wide efforts to rebuild salmon stocks. Continued delay in
    undertaking enhancement activities is placing considerable strain on
    those bearing the burden of conserving the salmon resource--largely
    fishermen coastwide, and all too often the tribal fishermen.
    Enhancement of this resource will provide for a stable, diversified
    economy coastwide. Of course, enhancement under the Treaty means the
    use of both natural and artificial methods and includes restoring the
    spawning habitat of a river, enhancing passage to the spawning and
    rearing areas, and using supplementation to rebuild weak or depressed
    stocks. And again, since they have been developed to rebuild or
    conserve salmon populations, these enhancement activities would also be
    expected to complement and hasten the recovery of salmon stocks listed
    under the Endangered Species Act.
        Finally, you should take into account the fact that the annual
    value of the commercial harvest of salmon subject to the Treaty is
    worth well over $500 million when stocks are at productive levels,
    supporting the infrastructure of many coastal and inland communities.
    The value of the recreational fisheries, and the important economic
    diversity they provide for local economies throughout the Pacific
    Northwest and Alaska, is also immense. And, of course, the value of
    these fish to tribes of Washington, Oregon, and Idaho goes far beyond
    their monetary value and reaches the cultural and religious lives of
    Indian people. Lastly, continued attention--and significant monetary
    investments--is focused on salmon as a result of listings of Pacific
    Northwest salmon populations under the Endangered Species Act. Given
    the resources, we manage a resolution to this complex situation,
    especially if we are allowed to work towards the true intent of the
    Treaty: mutually beneficial enhancement of the shared resource.
        Mr. Chairman, that concludes my written testimony submitted for
    consideration by your Committee. I want to thank the Committee for the
    support that it has given the U.S. Section in the past. Rolland
    Rousseau, Chairman of the U.S. Section Budget Committee, will be able
    to answer any written questions you or Committee members may have
    regarding the U.S. Section of the Pacific Salmon Commission budget.

    Summary of tribal program under the United States-Canada Pacific Salmon
    Treaty

            Fiscal years                                           BIA total
    1997 actual appropriation...............................  \1\ $3,018,000
    1998 recommmendation....................................       3,152,046
    Shortfall/restoration...................................         134,046

    \1\ This amount is the total of self governance account funds ($924,000)
    and the United States-Canada Pacific Salmon Treaty account ($2,094,000).
    As a result of targeted cuts in funds that were provided under Tribal/
    Agency Operations for tribes participating in the Self-Governance
    Compacts, this amount is a reduction in program funding provided by
    Congress in earlier years. In order to carry out the programs endorsed
    by Congress in past years, an additional $134,046 should be restored to
    the United States-Canada Pacific Salmon Treaty.

    Prepared Statement of Wm. Ron Allen, Commissioner, U.S. Section of the
                           Pacific Salmon Commission

        Mr. Chairman, my name is Ron Allen and I am a Commissioner on the
    Pacific Salmon Commission, established by the Treaty between the United
    States and Canada for the purposes of conserving salmon stocks and
    controlling salmon interceptions. I am providing this testimony as a
    member of the U.S. Section Budget Committee. The Committee's staff has
    also been provided with a copy of the recommended budget prepared by
    the U.S. Section for implementation of the Treaty. It details budgets
    for Tribal, Federal, and State agencies involved in the treaty. For the
    U.S. Fish and Wildlife Service, the U.S. Section recommends funding the
    fiscal year 1998 base program for Pacific Salmon Treaty activities at
    $615,000, an increase of $150,000 over the amount provided by Congress
    in fiscal year 1997, providing a necessary add-on to the USF&WS base
    budget for the Regional Mark Center. All of the funds are needed for
    data collection and analysis directly related to the implementation of
    the Treaty and are used in cooperative programs involving Federal,
    State, and Tribal fishery agencies and the Department of Fisheries and
    Oceans in Canada. The monetary commitment of the United States is
    matched by the commitment of the Government of Canada.
        The United States/Canada Pacific Salmon Treaty continues to be
    important to the wise management of the salmon of the Northwest and
    Alaska. The cost to manage this resource is small compared to the value
    of the salmon to the economies of both countries. The value of the
    annual commercial harvest of salmon subject to the Treaty is estimated,
    when stocks are healthy, at over $1 billion, supporting the
    infrastructure of many inland and coastal communities in Southeast
    Alaska, Canada, Washington, Oregon and Idaho. The value of the
    recreational fisheries, and the important economic diversity they
    provide for local economies throughout the Pacific Northwest and
    Alaska, is also immense and in some ways incalculable relative to the
    societal benefits they provide local communities. Recent downturns in
    stock productivity make the USF&WS programs, especially the Regional
    Mark Center, critical to managing currently depressed stocks. And, of
    course, the value of these fish to tribes of Washington, Oregon, and
    Idaho goes far beyond their monetary value and reaches the cultural and
    religious lives of Indian people.
        As part of the U.S. Section's management activities, millions of
    young salmon are marked each year with coded wire tags that allow the
    U.S. Section to evaluate its fishery management decisions. The adult
    salmon that return to the fisheries and spawning areas are sampled and
    the tags are recovered, providing important migratory and catch rate
    information to both researchers and managers. This information
    continues to be the backbone of evaluating the Treaty's programs and
    successes and is also an invaluable tool in gauging the recovery
    programs being evaluated by the Pacific Northwest and Alaska as part of
    the Endangered Species Act process. This critical work is facilitated
    by the Regional Mark Center.
        For fiscal year 1998, we are requesting that the Committee provide
    the Fish and Wildlife Service with a $150,000 add-on to fund the
    Pacific States Marine Fisheries Commission's (PSMFC) Regional Mark
    Center. The Regional Mark Center coordinates the standards of the
    Treaty's comprehensive, long-term activity and acts as the central
    computerized repository for the information on tag releases and
    recoveries. The Fish and Wildlife Service will contract with the PSMFC
    to provide this service. Because of the added concern for salmon stocks
    generated by the Endangered Species Act, this information has become
    even more critical to Alaska and the Pacific Northwest, as well as
    Canada, in order to evaluate fishery management decisions. Because the
    responsibilities of the Regional Mark Center will continue to grow as
    the demand for this information grows, the U.S. Section is recommending
    that $150,000 be added to the Service's base Resource Management
    program funding for this critical Treaty activity.
        Mr. Chairman, that concludes my testimony submitted for
    consideration by your Committee. I want to thank the Committee for the
    support that it has given to the Treaty in the past. I am available to
    answer any questions you or Committee members may have regarding the
    U.S. Section of the Pacific Salmon Commission budget.

       SUMMARY OF U.S. FISH AND WILDLIFE SERVICE PROGRAM NEEDS FOR UNITED
                       STATES-CANADA PACIFIC SALMON TREATY
    ------------------------------------------------------------------------
                                          Fiscal years--
                                 -------------------------------
                                       1997           1998        Shortfall
                                  appropriation  recommendation
    ------------------------------------------------------------------------
    Fisheries (staff and tagging
     activities)................      $465,000        $465,000   ...........
    Pacific States Marine
     Fisheries Commission.......  .............        150,000      $150,000
                                 -------------------------------------------
          Total.................       465,000         615,000       150,000
    ------------------------------------------------------------------------

                                     ______

      Prepared Statement of Joyce Burr, Superintendent, Circle of Nations
                                     School

        Honorable Senators: My name is Joyce Burr I am the superintendent
    of Circle of Nations School, an off-reservation boarding school
    operating under a contract from the BIA to the Sisseton-Wahpeton Sioux
    tribal governing body under Public Law 100-297. The 6-member school
    board represents tribes with the largest enrollment of students, from
    the states of North Dakota, South Dakota, Minnesota, Montana,
    Wisconsin, and Nebraska.
        The Circle of Nations School is located on a 53-acre campus in
    Wahpeton, ND. It has 3 dormitories, 1 instructional building, and 10
    other buildings. The program was established by Congress in 1904 as an
    agricultural and vocational training school administered by the BIA. It
    changed to a more conventional academic focus by the 1940's. Day
    schools had been established on reservations following the 1928 Merriam
    Report, which spurred national reform in Indian education.
        By the 1970's, the remaining boarding school system was home to a
    troubled student population who did not fit with schools at their home
    agencies.The concept of a therapeutic school began to be discussed
    among Indian health and education leaders. Several papers from 1973 to
    1988 document needs of the off-reservation boarding schools and the
    recommendations of BIA, Indian Health Service, and Indian school
    organizations toward a therapeutic model.
        In 1993 the school converted to tribal grant status. That year, a
    Therapeutic community School Model Meeting had been held in Washington,
    DC whereby Indian Health Service, BIA, mental health experts, and
    boarding school officials conceived a plan to implement the model in 4
    schools, including Wahpeton. This was hailed as ``an historic meeting,
    a collaborative effort between the Bureau of Indian Affairs and Indian
    Health service'' and ``a cooperative endeavor in more than name only.''
    Again the mental health needs of students were emphasized, as were
    staffing and funding improvements.
        Indian Health Service stated that an ``underfunded, understaffed
    model should not be attempted.'' The off-reservation boarding schools
    (ORBS) asserted that the Indian School Equalization Program (ISEP)
    formula could not even marginally meet the high needs of students with
    chronic substance abuse, mental health, behavior and learning problems.
    Concept papers from the ORBS recommended changing the ISEP formula. To
    date this has not happened, and the boarding schools continue to
    struggle with a seemingly impossible proposition: to provide--on a
    shoestring budget--a total program for each child, where various other
    agencies and resources have failed or been exhausted. For years, the
    boarding schools had the image of a ``last resort'' ``dumping ground''
    ``warehouse'' and ``escape hatch'' for troubled and disadvantaged
    Indian youth.
        These children were abandoned by parents, schools, professional
    service providers, and the juvenile justice system without a second
    thought. They came from psychiatric wards, detention centers, abusive
    homes or no home, and other problematic circumstances with no
    documentation or resources for their care while at school. Yet there
    has never been a suicide or a drug or alcohol-related death of any
    student at the Wahpeton Indian boarding school--even though a dozen
    such incidents have occurred in the school-age population of the
    surrounding small community in as many recent years.
        As a result of the numerous studies and adverse publicity regarding
    boarding schools, the Circle of Nations (Wahpeton Indian School) was
    designated a therapeutic model demonstration project under Public Law
    103-382, Improving America's Schools Act of 1994. A one-year funding
    award allowed for a reduced enrollment of 150 students in 1994, as
    compared to nearly 300 the previous fall, in order to lower the
    student-to-staff ratio.
        The school is charged with the responsibility of providing a
    program, based on an annual written plan, that ``links clinicians,
    counselors, and mental health professionals with academic program
    personnel in a culturally sensitive residential program tailored to the
    particular needs of Indian students.''
        The school operates a 24-hour-a-day, 7-days-a-week, 9-month
    therapeutic residential school program. We currently enroll 200
    children in grades 4 through 8 from around 33 tribal groups and 18
    different states. Our largest student enrollment are from the Aberdeen,
    Bemidji, and Billings Indian Health Service regional areas. However,
    the school does not receive Indian Health Service support other than
    technical assistance and the school clinic program which employs a
    nurse and intermittent nurse assistance.
        Last year's budget for the school clinic was $185,016 ($101,316
    from Hospitals & Clinics program and $83,700 for Contract Health
    Service funds). With 200 students, that works out to $925 per student
    for the 252 days per school year that a student is on campus, or $3.00
    per day. If a student requires emergency psychiatric placement, their
    entire yearly allotment will buy 1.5 days or one-half of a standard 72-
    hour emergency inpatient assessment. Longer-term mental health or
    chemical dependency treatment is the usual recommendation for these
    students, although funds can rarely be accessed.
        Circle of Nations revised its admission requirements to include a
    psychological evaluation, chemical dependency assessment, court report,
    and social history for each students' application. This eliminated some
    costs and provided a planning document for each student. The majority
    of students have multiple health risk factors--environmental,
    biological, and behavioral. Typically, students have a history of low
    academic or personal achievement and have learning impairments.
        Most of our students can be diagnosed with more than on co-existing
    mental health, substance abuse, or learning disorder. 75 percent are
    eligible for Special Education services in either Emotionally Disturbed
    (80 percent) or Learning Disabled (20 percent) diagnostic categories.
    At least 90 percent meet diagnostic criteria for Conduct Disordered. 75
    percent report a history of physical, sexual, or psychological abuse.
    25 percent or more have family-reported risk factors for prenatal
    alcohol or other drug exposure known to cause birth defects such as
    Fetal Alcohol Syndrome of Effect. Traumatic brain injury is a
    significant factor as well.
        The goals of the Circle of Nations therapeutic model are: 1.
    Successful transition through levels of learning; 2. Health promotion/
    disease prevention; 3 Mental health promotion; and 4. Promote
    spiritual, cultural, social, and emotional development.
        We can provide a comprehensive residential education program that
    includes housing, nutrition, special education, school health services,
    recreation, cultural, and leisure activities, and a network of
    referral. We use all available resources for the prevention and early
    intervention/remediation of health and learning problems, including
    mental health and substance abuse disorders. Students may be referred
    elsewhere if their problems turn out to be beyond the scope of our
    services, for example, psychiatric emergencies and longer-term
    inpatient recommendations. There are no clinical mental health
    providers on staff, such as a psychologist, psychiatric nurse, etc.
    although we can contract limited assessment services from providers
    (not treatment).
        The therapeutic residential school is conceived of as a cost-
    effective approach which aims to prevent or ameliorate lifetime
    problems, the costs of which are already being obligated to different
    agencies, programs, or resources. The total cost per student is
    currently $50 per day at Circle of Nations School, compared to $125 for
    youth detention, $480 for inpatient substance abuse treatment, or $650
    for inpatient psychiatric care. The overall federal average cost of
    housing an adult prison inmate presently exceeds $21,350 per year. A
    year's stay in the state hospital or regional treatment center is far
    more costly.
        Experts on the treatment of conduct-disordered children agree that
    developing a ``system of care'' that is designed to improve the child's
    ability to function in all areas of his or her life--at home, in school
    and in the community is the best approach, rather than short-term
    treatment or counseling. Circle of Nations is a structured system of
    care for children who do not have an adequate system elsewhere.
        The idea is to help these children change their emotional and
    belief system before it solidifies and is entrenched in their lives (a
    childhood history of conduct disorder is a diagnostic requirement of
    adult antisocial personality disorder). Circle of Nations School
    promotes normal socialization, skills acquisition, and remediation
    modalities in the least restrictive environment possible. The
    therapeutic community approach teaches personal and social
    responsibility and allows the student to practice adaptive coping
    skills.
        Circle of Nations is not a locked facility as are the state
    corrections school and other inpatient or residential programs where
    youth are physically contained, requiring fewer staff to operate. In
    comparison, the students at Circle of Nations School require constant
    staff supervision, a higher staff effort, and a higher staff to student
    ratio.
        When our students are assessed by expert providers and clinicians,
    they have over and over again recommended long term inpatient therapy,
    group or foster home placement, specialized learning and behavior
    programs, and dual track mental health/substance abuse treatment. But
    there is no such placement available to our students--Circle of Nations
    School is the closest thing to this ideal although it is not yet a
    truly therapeutic model.
        During the 1996-97 the Behavioral Center Pilot Project was
    implemented on a small scale at Circle of Nations School. This is a
    structured 24-hour care program for high-risk students such as dual
    disordered, chronic substance abusing, and assaultive kids. It serves
    up to 10 children at a time with an individual Master Treatment Plan.
    The team treatment approach utilizes the participation of clinical
    mental health providers, licensed addiction counselors and social
    workers, counseling and psychological support staff, and residential
    and child protection staff.
        The majority of kids go through the behavior modification and
    counseling program and are then mainstreamed into the general
    population again instead of being suspended or expelled. Some are
    placed in longer-term psychiatric or CD treatment programs directly
    from the Behavioral Center and are able to return school upon
    successful completion of these off-campus programs. This project is
    successful in that only 2 of 24 students were dropped from Circle of
    Nations School after leaving the Behavioral Center. Both were placed
    directly into longer-term psychiatric treatment through CNS referral
    work.
        While this program is effective for the children it serves, it does
    strain our staff resources that are needed by the rest of the student
    population. If a clinical program director and mental health providers
    and workers could be hired to operate the Behavioral Center and
    generate third-party billings, this program could serve many more
    students and become self-sufficient in 3-5 years. What Circle of
    Nations School proposes to do is to further develop and staff the
    Behavioral Center whereby students can be served by a three-phase
    onsite therapy program, eliminating the cost of outside provider
    contracts and emergency facilities and improving student performance
    and retention.
        The on-campus Behavioral Center is our priority task in carrying
    out the therapeutic residential school mission. We are requesting $1.7
    million to implement this project. A complete proposal and budget are
    available for review.
        Lives are being wasted every day in this country. Students drop out
    and leave school without learning the crucial things for their success.
    The boarding schools are a microcosm of reservation and urban society
    today with all its ills. It's time to quit the Band-Aid approach.
    Inadequate funding, understaffing, outdated programs, restrictive
    policies, and lack of coordination between agencies have characterized
    Indian boarding schools for the past 25 years. We must move decisively,
    for these children are our future.
                                     ______

     Prepared Statement of Stanley Herrera, President, Alamo-Navajo School
                                Board, Alamo, NM

        Mr. Chairman: I am Stanley Herrera, President of the Alamo-Navajo
    School Board. With me today is Burton Apache, a Member of the School
    Board. We ofer testimony on the School Operations budget submitted by
    the Bureau of Indian Affairs, and on certain aspects of the fiscal year
    1998 Indian Health Service budget.
        First, let me point out that the Alamo School Board does more than
    operate a school. Since our 10-square mile reservation is in an
    isolated area of south/central New Mexico, far away from the ``big''
    Navajo Reservation, the Alamo-Navajo Community has had to learn and
    practice self-sufficiency on a daily basis. Through the authorization
    of the Navajo Nation Council and the Alamo Chapter (a political
    subdivision of the Navajo Nation), the School Board has become the
    central service organization for all education, health, roads
    maintenance and community programs serving the 1,800 residents of the
    Alamo reservation.
                  bureau of indian affairs--school operations
        Each year Congress provides us with funds under the Indian School
    Equalization Formula (ISEF) to pay the costs of our instructional
    program. But you should know that we are not able to devote these ISEF
    monies solely to our instruction needs. The chronic shortages in the
    other accounts that must support our school operations force us to use
    our precious ISEF dollars to make up those shortages. For example:
        Our student transportation (daily round-trip to/from homes) costs
    $180,000 annually. We are reimbursed for only $136,600, or only 70
    percent of the costs. Thus, we have to make up the $43,400 difference
    from our ISEF instructional funds.
        GSA will increase the bus lease rates next year, but there is no
    additional funding in the budget request to cover these costs. Thus,
    the percentage of our transportation costs for leasing will increase
    from 40 percent of our budget to perhaps 60 percent. But we cannot pay
    lower wages than we already pay our bus drivers. Thus, this additional
    shortfall will take even more of our ISEF dollars.
        The facilities operation & maintenance funding has never been able
    to meet the Congressionally-ordered formula. Currently, we are falling
    34 percent short of the formula, and this shortage will be even greater
    under the proposed fiscal year 1998 budget. The BIA acknowledged that
    over 750,000 square feet of facilities space were added to the system,
    but they do not request the additional $3 million needed to cover this.
    Thus, all schools will suffer an even greater reduction in the funds
    provided for facilities maintenance.
        What does this mean for Alamo? Since we have to pay in full our
    utility costs, must perform preventive maintenance and cover emergency
    repairs, we have little money left for custodial expenses. What does
    this mean for the federal facilities we operate? They will deteriorate
    at a far faster rate.
        Where do we look to make up the shortage? ISEF, again.
        When the Administrative Cost Grant funding is not enough to pay all
    schools at the rate required by law, we institute severe cost reduction
    efforts. But there is a level below which we cannot drop without
    compromising sound management principles. When this happens, we again
    must make up the shortage with ISEF dollars.
        We fear there could be a significant shortage in the A.C. Grant
    request for fiscal year 1998, as some 12 schools currently operated by
    BIA will be converted to tribal operation. This makes these schools
    eligible for AC Grant funds. We know BIA has not asked for enough
    additional funds to cover these conversions. This means all schools
    will suffer sizable reductions in their A.C. Grants.
        A note about severance pay: We ask you to make sure that BIA does
    not use any of the funds you appropriate for School Operations to pay
    federal employee severance costs at the converting schools. Such use is
    not authorized in the law. Severance costs should be funded from the
    BIA's contract support line item, and we ask you to assure that
    sufficient funds are provided there for this purpose.
                              bia--fire protection
        Three years ago, a lot of media attention was focused on the lack
    of fire protection at BIA-funded schools on the Navajo Reservation.
    Immediately afterward, the then Director of the Office of Indian
    Education Programs authorized schools to use facilities operation &
    maintenance funds for fire services. We have received some minor
    equipment (such as fire suits) and some training for volunteer firemen.
    But we received no additional funding for fire services and no really
    significant improvements in fire protection since then.
        As a result Alamo still has only one fire truck--a 25-year-old
    vehicle that carries 500 gallons of water. This is the sole fire
    fighting capability we have on a reservation that is the size of the
    District of Columbia. With this one vehicle, we have to protect $25
    million of federal facilities and the homes of 1,800 reservation
    residents.
                             indian health service
        We could spend hours reciting various funding problems with the IHS
    clinic the School Board operates, but we will focus on only one of them
    here: environmental health systems such as water, sewer and solid waste
    disposal.
        IHS funds new environmental health systems development on a limited
    basis for new federal facilities (such as our recently-expanded clinic)
    and tribal housing programs. But, when completed, IHS turns the utility
    systems over to the local tribal governmental authority and provides
    neither upkeep nor replacement costs.
        In a number of New Mexico tribal settings, the existing
    environmental health infrastructures are old, inadequate and badly
    deteriorated. Some provision must be made for replacement and
    maintenance, as we do not have the funding base at the local level to
    support this needed activity.
        I wish I could close on a hopeful note, but I cannot. The recent
    Welfare Reform Law will put additional pressure on our existing
    inadequate health, education, and community programs and facilities.
    Many Indian people who now live off-reservation will be forced to
    return to their reservations when they are cut off from the social
    support programs previously funded by federal program dollars. When
    this happens, how will we be able to manage this added responsibility?
                                     ______

      Prepared Statement of George Cukro, Executive Director, Black Mesa
                   Community and School of the Navajo Nation

        The Black Mesa Community School is a K-8 Grant School located on
    the Navajo Nation Reservation in northern Arizona. We are a rural
    Native American community within the Black Mesa Mountains, on unpaved
    route 8066. The nearest post office is in Pinon, Arizona, 25 miles
    south of Black Mesa.
        We appreciate the opportunity to submit our statement on the
    proposed fiscal year 1998 Bureau of Indian Affairs budget. Our
    statement focuses on Navajo children, their education, and the
    facilities that are needed for them to obtain the rich resources that
    are available in ways that most take for granted. In summary those
    needs are: adequate teaching facilities and a safe road to the school;
    a dependable, efficient telephone system; capability to access the
    internet and on-line computer services; adequate, safe housing for
    instructional staff.
        The Black Mesa Community School opened in 1976 in used trailers
    converted into small classrooms. Later, the Bureau of Indian Affairs
    constructed a small school building consisting of four instruction
    classrooms, a library/conference room combination, an all-purpose room
    with an attached kitchen, a small office unit, and 2 student restrooms.
    The school was built to house 80 students but we have grown to more
    than 100 children. Since 1991, our student population has been
    consistently averaging 100 students, as follows:

    Number of students

    1991..............................................................   100
    1992..............................................................    92
    1993..............................................................   112
    1994..............................................................    98
    1995..............................................................   105
    1996..............................................................   105

        The needs of Black Mesa's children are not any different than kids
    who live in large metropolitan areas. We are, however, restricted in
    meeting those needs due to our isolation, lack of outside resources,
    limited housing, and no phone lines.
                                  overcrowding
        We have applied for grants to build additional modular classroom
    buildings to help meet the children's needs, but to date we have not
    even received acknowledgment that they were being considered. To serve
    an ever increasing student population, we have had to combine several
    grade levels into single classrooms. This limits our capacity to
    provide a well-rounded curriculum for our children such as shop, home
    economics and arts. Clearly, these are classes that most children take
    for granted throughout America. In order to adequately provide for our
    students, we need:
      --Two additional classrooms to reduce the pupil/teacher ratio in
            classes that are currently combined across grades because of
            our limited facilities.
      --Two classrooms for pre-vocational training for our middle school
            students. One room would be used for a wood working shop, as
            well as for cultural arts. The second room would be used for
            home economics, including cooking, sewing, home management and
            life skills.
      --One computer lab for technological training and internet access.
      --One classroom for advanced instruction for gifted and talented
            students.
                                  unsafe road
        At present, the unpaved road limits access to Black Mesa School. If
    there is an emergency, help is a long time coming. It is often
    dangerous for buses and parents to navigate 12 inch ruts, mud, snow,
    and ice. Consultants who come to our school for staff development would
    rather pay the expense of renting a car than pay the repair bills for
    replacing tires, shocks, windshields, motor mounts and wheel bearings.
    Believe me when I tell you that I am not exaggerating.
        For the health and safety of our people, especially the children,
    we need funds to lay gravel on the unpaved road and maintain a
    consistent repair schedule throughout the year.
                              technological needs
        The utilization of modern technology is the only way possible to
    provide for the health and educational needs that will offer Navajo
    children the opportunities enjoyed by other children in this country.
    We at Black Mesa have committed to the use of technology in linking our
    local educational standards to the national, state, and Bureau of
    Indian Affairs standards.
        We need your help in obtaining for our school a modern
    communication system. Black Mesa School has the only available
    telephone for the people in a 25-mile radius. This phone is operated by
    radio waves and is very unreliable. There are days when the phone goes
    out for hours at a time. If we ever had an emergency during one of
    those blackout times someone might lose their life. A dedicated phone
    line would not only provide a more reliable communication system for
    the health and safety of the Black Mesa community, but we could also be
    linked to the rest of the world technologically. Most Americans now
    have the world at their fingertips, but Navajo children at Black Mesa
    struggle to utilize the 10 computers we were able to purchase.
        With a dedicated phone line, our students, too, will be able to
    access database services including the internet and on-line computer
    services which can provide a rich learning experience for our children.
    We have committed ourselves to use technology to provide our children
    with modern opportunities. We are already moving in that direction, but
    we cannot accomplish this goal without your help.
                                 staff housing
        The housing for the teachers of Black Mesa School is woefully
    inadequate. Staff are currently housed in four trailers which are 10
    years old, and 5 houses which are approximately 30 years old. Due to
    the age of these units, they are in need of refurbishing, replacement
    of appliances and have little or no heat during the freezing winter
    months. We ask you to re-establish a recurring education quarters
    construction budget in order that we can provide decent, safe and
    affordable housing for our staff.
        On behalf of the Navajo people living at Black Mesa, we thank the
    Subcommittee for the opportunity to comment on matters which may seem
    simple and of little consequence, but they are of monumental concern to
    us. We are isolated, but we hope that you will assist us in obtaining
    the essentials of life that are taken for granted by other Americans.
    President Clinton has stated he was committed to excellence and
    technology for all American children. I believe all of you in Congress
    would agree that all of America's children should be well-educated for
    the twenty-first century. Please do not leave the children of Black
    Mesa behind. Thank you for your support.
                                     ______

      Prepared Statement of Faye Blue Eyes, Executive Director, Shiprock
             Alternative Schools, Inc., Navajo Nation, Shiprock, NM

        Shiprock Alternative Schools, Inc. (SASI) administers an
    alternative education program for 159 high school students, and an
    elementary education program for 180 students from Kindergarten through
    Sixth grade. SASI is unique in its concept of a holistic learning
    environment conducive to the highest level of learning for our diverse
    elementary and high school students. For 20 years we have successfully
    managed our alternative and elementary programs under a Public Law 93-
    638 contract. We are now in our seventh year of successful Public Law
    100-297 Grant administration and maintain a Staff Quarters Program of
    ten units, serving Shiprock Alternative Schools, Inc.
        So that SASI may continue its successful ``alternative'' high
    school and elementary programs, we respectfully ask this Subcommittee
    to fund at least two projects per year on the New School Construction
    Priority List. We were very disappointed that the BIA only requested
    funding for one new school construction project in the fiscal year 1998
    budget. Our facilities are in desperate need of replacement and your
    commitment to funding at least two priority list projects per year will
    ensure that Shiprock's replacement school can receive funding within
    the next three years.
                        sasi's ``alternative'' programs
        Our high school and elementary programs are ``alternative'' because
    they offer non-traditional education programs. The fundamental
    philosophy of SASI is based on Dine', and other American Indian
    philosophies of life, and incorporates the positive attributes for the
    well being of our native People. The innovative high school program was
    established by the Navajo Nation in 1976 to serve ``at risk'' Navajo
    high school youth experiencing social and academic problems in the
    conventional education program. We are the school of last resort for
    students who have previously dropped out of school, have become
    pregnant and need child care in order to continue studies, or have had
    disciplinary problems at previous schools. Our ``alternative'' high
    school program provides a second chance--perhaps the only chance--for
    those youth that are most likely to be lost to society.
        The elementary program is based on the principles of early
    intervention and prevention. The program focuses on the academic and
    social needs of the individual students, blending conventional and
    traditional educational methods. Accordingly, the class sizes are
    intentionally kept small to encourage substantial teacher-student
    interaction and individual attention. A few years ago, BIA approved our
    request to advance one grade per year, with the ultimate goal of
    providing grades K through 8. To do this, however, we have to reduce by
    one kindergarten class each year in order to have the space to provide
    the new grade level. The program has been such a success that, since
    its inception, we have not been able to accommodate all students
    wishing to participate. This year, for instance, 37 students are on our
    waiting list.
                            new school construction
        In January, 1993, SASI was added as the 12th school on the New
    School Construction Priority List and we are currently undertaking the
    planning and design phases that precede construction. Facilities
    replacement is the only option for the schools on the priority list
    because their facilities are in such dreadful conditions that
    rehabilitation and upgrading are not feasible. Below is a sampling of
    the conditions faced by SASI that caused it to be placed on the
    priority list, and a glimpse at how these conditions and our current
    space inadequacies have caused us to configure some of our classes.
        SASI's buildings are nearly 50 year-old dormitories whose non
    supportive interior walls have been knocked out in order to create
    classroom space. As a result, numerous fire code violations exist.
    According to a 1988 facility code compliance survey and BIA inspection
    validation by architects and engineers, the ``buildings were originally
    designed as dormitories and are not safe or suitable for use as
    educational occupancies.'' The report identified code/safety items
    requiring immediate attention including inadequate egress from the
    classrooms; flame spread rating of finishes in the corridors; fire-
    rated separation between boiler room; and updating of the fire/smoke
    alarm system in the buildings. For instance, the classrooms do not have
    direct exits to the outside or rescue and ventilation windows. Most of
    our doors do not meet fire code standards. SASI has only an audio fire
    alarm system. Safety codes require an audio-visual and communication
    system. Only one of our three buildings has a working sprinkler system
    and even that is not up to code standards.
        The building interiors are not handicapped accessible. No doorways,
    bathrooms, or water fountains were built for or have been modified to
    accommodate the handicapped students, particularly those in
    wheelchairs.
        The heating system is in complete disarray. For example, our boiler
    creates such uneven heating that our children at one end of a building
    must wear gloves and coats, while staff and students at the other end
    open windows to cool off their classrooms. In addition, because the
    boilers are inadequate to handle heating each of the entire buildings,
    they shutdown frequently from the overload, causing our children to go
    without heat at all. The cast-iron radiators in the building where our
    classrooms are located take up some of the much needed space.
        None of the buildings have rain gutters. Rain often accumulates
    around the breezeway areas, sometimes up to a foot. The students cannot
    avoid tracking water and mud into the school which creates dangerous
    slipping and falling. Roof shingles are loose or missing in patches,
    causing leaks that make the problem worse. Some leaking even occurs in
    the main line electrical area.
        One of the most egregious conditions that we and our students must
    face is the presence of asbestos underneath all our school buildings
    and in some walls. No Facilities Management personnel are available to
    check for asbestos fragmentation or undertake removal. This also
    prevents repair work on electrical and water lines. The water in all
    buildings is rusted, so bottled drinking water must be brought in. The
    hot water is orange in color, rendering it useless.
        Despite all of the foregoing inadequacies, which are not unique
    among Indian educational facilities, our ``alternative'' programs are
    so successful that we have a substantial waiting list for both the high
    school and elementary. We are making a difference in the lives of the
    young people that attend our programs. Nevertheless, for us to continue
    this success, we must have a facility that will not place our students
    in constant danger, but, instead, will nurture their educational
    experiences.
        Shiprock Alternative Schools, Inc. has, for the past 20 years, been
    forced to operate in outdated and unsafe school buildings.
    Unfortunately, similar dilapidated school facilities exist throughout
    Indian Country which must be renovated or replaced. We were thus
    disappointed to see that the BIA request for fiscal year 1998 only
    seeks funding for construction of the Many Farms High School
    Replacement, a school ahead of SASI on the priority list. Education for
    our children is fundamental for self-sufficiency; therefore we strongly
    urge Congress to increase funding for Education Construction within the
    Department of Interior Appropriations. We hope that Congress will
    provide not only the money for construction of the Many Farms High
    School, but also money for at least one other school on the priority
    list, so that our need will eventually be met.
        We ask that Members of the Subcommittee imagine one of your young
    loved ones attending a school in the same condition of our current
    facility. If you could provide this loved one a newer, safer school
    environment, would you not do so? Accordingly, we strongly urge you to
    take the steps necessary to fund at least two New School Construction
    Projects per year.
                                     ______

        Prepared Statement of Hon. Jack Booth, Mayor, Metlakatla Indian
                                   Community

        The Metlakatla Indian Community, Annette Island Reserve, provides
    this statement on the fiscal year 1998 budget requests for the Bureau
    of Indian Affairs and the Indian Health Service. The Council is the
    federally-recognized governing body of Metlakatla Indian Community,
    Annette Island Reserve, the only existing statutory Indian reservation
    in Alaska. The Community population is over 1,500 and has a land base
    of 87,000 acres in southeast Alaska. The economic base of the community
    is based on timber and fishing industries, which provide seasonal
    employment. The Community administers BIA and IHS programs on the
    reservation under contracts pursuant to the Indian Self-Determination
    and Education Assistance Act.
                           summary of recommendations
      --Special allocation for Walden Point Road project
      --Increase funding for Tribal Priorities Allocation account
      --Funding for construction of Metlakatla clinic
                          bia fiscal year 1998 budget
        The Community's concerns and comments specific to the Bureau of
    Indian Affairs budget are as follows.
        Walden Point road project.--Since 1995, the Metlakatla Community
    has been actively pursuing the construction of a 13 mile road and three
    mile shuttle ferry connection which will provide, for the first time, a
    safe, affordable means by which our people can access services and
    business opportunities in Ketchikan. Presently, our transportation
    links off the Annette Islands Reserve are either a commercial air
    transportation service or the Alaska Marine Highway System ferry
    service. The air service is not only expensive but subject to/limited
    by the weather and daylight. The ferry service makes one or two stops
    per week most of the year, with more stops scheduled during the summer
    months.
        We are proud to report that we are in the final stages of
    negotiating a Memorandum of Agreement with the Department of Defense
    (who will do the actual construction under the DOD's Civil-Military
    Innovative Readiness Training Program), Federal Highway Administration
    (the project designer), Alaska Department of Transportation and Public
    Facilities (charged with addressing the environmental and permitting
    requirements) and the Bureau of Indian Affairs (lead agency for the
    environmental process). Other cooperating agencies include the Corps of
    Engineers and the Environmental Protection Agency.
        While much of the costs for this project is being assumed by non-
    Interior agencies, the DOD is prohibited from purchasing the
    construction materials, which is estimated to reach $10 million for the
    entire project. We have sought alternative sources to fund the
    materials component, including the Bureau--who advised us to seek a
    specified appropriation of $2 million per year for the five-year period
    the project is expected to be completed. We have been informed that the
    necessary funding should come from either the State of Alaska or the
    Bureau. Both of these entities, however, have already stated that they
    do not have $2 million available to transfer to this project from the
    funding they receive under the Federal Highway Trust Fund. Pending
    finalization of the MOU, all participants are ready to initiate the
    processes which will lead to the actual construction phase beginning
    May 1998.
        Recommendation: We urge that Congress authorize a line item within
    the fiscal year 1998 Bureau of Indian Affairs budget in the amount of
    $2 million for the Walden Point Road Project construction materials.
        Tribal priority allocation.--The Metlakatla Community is encouraged
    by the Administration's request for a general increase of $46.7 million
    to the Tribal Priorities Allocation (``TPA'') account. Within the TPA
    allocation are Wildlife and Parks funds which the Community utilizes
    for fisheries enforcement activities. The present level of funding has
    limited us to just one enforcement officer. The fisheries industry,
    however, has developed into a major economic development and employment
    source for the Community. With the sea cucumber and sea urchin
    fisheries coming on line, our enforcement activities have increased as
    there are now overlapping seasons, an increased number of vessels in
    the waterways, and an expanded area to be covered. You can see that one
    person cannot adequately patrol and enforce compliance with the codes
    that the Metlakatla have established for the fisheries.
        With each fiscal year, more and more inadequately funded programs
    are being transferred to TPA. Additionally, tribes are expected to
    adjust their TPA funds to cover any shortfalls in these programs,
    including Contract Support. Without a significant increase in the TPA
    allocation, the Community will not be able to adequately protect its
    resources in the waterways surrounding the 87,000 acre island occupied
    by the Metlakatla.
        Recommendation: The Community requests that Congress provide, at a
    minimum, the $46.7 million general increase to the Tribal Priority
    Allocations account.
                          ihs fiscal year 1998 budget
        Metlakatla health center.--The Metlakatla Indian Community has been
    pursuing for several years funds for the replacement of the current
    facilities. At present, our clinic services are housed in four modular
    buildings built in the mid-1970's. These facilities are set on pilings
    and connected by open, elevated, wooden walkways. Over time these
    buildings have settled unevenly, posing an unsafe environment for those
    seeking health services (about 28,000 visits per year) as well as
    staff. In addition, we face overcrowding and utility systems which are
    inadequate to support the modernization or updating of medical
    equipment.
        The Community's program justification document (PJD) for
    construction of a replacement health center was approved by IHS and
    included in the IHS Health Care Facilities Construction priority list
    for design and construction funding in fiscal year 1997. According to
    the fiscal year 1997 projections, we were to receive project design
    funds (estimated at $1.3 million in 1995) in fiscal year 1999 (January,
    1998) and the design phase would be completed in late 1999. We were
    disappointed to see in the fiscal year 1998 budget justification that
    the IHS projections now show we will not receive a design award until
    2001 (fiscal year 2002) even though our priority ranking at number 8
    has not changed.
        Please understand, the Community is in desperate need of this
    facility now! We recently received from IHS the report on a
    comprehensive inspection of our current facilities. The total cost for
    repairs necessary to achieve compliance with current fire, mechanical,
    electrical and life-safety codes, as well as the Uniform Building Code
    and the Americans with Disabilities Act guidelines is almost $1 million
    dollars--almost the same amount needed to complete the project design.
    As this Subcommittee is well aware, the IHS Maintenance and Improvement
    funds has never been adequate to address the level of need. The budget
    justification states that in the first quarter of fiscal year 1996, the
    IHS Backlog of Essential Maintenance and Repair was estimated to be
    $188 million. Yet the Administration's request for this account is the
    same as the fiscal year 1997 appropriation ($39.3 million). This is in
    spite of the fact that the agency expects the need to increase as a
    result of ``the addition of numerous tribal facilities, new seismic and
    security requirements, and environmental projects generated by the on-
    going environmental assessment program, * * * .'' (page IHF-12).
        We realize it will be virtually impossible to obtain adequate
    funding through the Maintenance and Improvement account to address the
    life-safety and other code deficiencies cited at our existing facility
    if funding remains at the totally inadequate level proposed. We also
    fear that without a significant increase to the Health Care Facilities
    Construction account, we will be no closer than we are this year to
    obtaining project design funds.
        Recommendation: We urge that Congress fund the IHS Facilities
    Construction account at a level which would fund the projects on the
    IHS Construction priority list, providing for the Metlakatla project in
    fiscal year 1998 at least the funds estimated by IHS to complete the
    design of the project ($1.3 million). We also recommend that Congress
    provide a general increase for Maintenance and Improvement to address a
    greater percentage of the backlog.
        Indian Self Determination Fund (Contract Support Costs).--We note
    that the $12 million requested for contract support costs on new or
    expanded health programs operated by tribes under the Indian Self-
    Determination Act leaves a $39 million deficit in the Indian Self
    Determination Fund, including $107,588 to cover the overhead costs of
    our ``638'' health program based on it's fiscal year 1997 expansion.
    When IHS funds are not provided for a new and expanded IHS contracts
    and compacts, funds intended for health services are reduced by the
    need to cover overhead costs. We urge Congress to fund the full amount
    of ISDF need identified by the Indian Health Service.
        On behalf of the Metlakatla Indian Community, thank you for the
    opportunity to provide our views on the Indian Health Service and
    Bureau of Indian Affairs budgets for fiscal year 1998.
                                     ______

     Prepared Statement of Nicolas J. Padilla, on Behalf of the Susanville
                                Indian Rancheria

        The Susanville Indian Rancheria (Rancheria) provides this statement
    on the fiscal year 1998 budget request for the Indian Health Service.
    The Rancheria provides health care to more than 2,500 American Indian
    beneficiaries located in Lassen County in Northern California. Since
    1986, when the Rancheria first began contracting with the Indian Health
    Service (IHS) under Title I of the Indian Self-Determination and
    Education Assistance Act, we have continuously improved the quality,
    quantity and scope of health care services delivered to eligible
    American Indians located in our service area. The increasing level of
    health services that we have been able to provide through our Lassen
    Indian Health Center is directly related to the amount of funds which
    Congress makes available for Title I contractors through the IHS.
        The Susanville Indian Rancheria's specific concerns with regard to
    the fiscal year 1998 budget request for the Indian Health Service are
    as follows: Institute policy to ensure full funding for calendar year
    contractors out of existing year appropriations; fully fund Contract
    Support Costs; provide $1.4 million for Regional Youth Treatment
    Facility in northern California; correct inequitable funding and
    increase Contract Health Services to California tribes and tribal
    organizations; increase Equipment funding; provide requested $28.3
    million for Health Professions account, including IHS Scholarship
    funds.
        We also request the Committee's assistance in the following issues
    which are not related to the fiscal year 1998 budget, but which impact
    our ability to provide health care services to our people: Adopt
    clarifying language regarding Federal Tort Claims Act coverage for
    tribes and tribal organizations; impact of Managed Care on tribally
    operated health programs; support transfer of certain Sierra Army Depot
    facilities and lands to the Rancheria.
        Full funding for calendar year contractors.--For a number of years
    Susanville Indian Rancheria (``Rancheria'') has utilized a calendar
    year for contracting under Section 105(d) of the Indian Self-
    Determination and Education Assistance Act (the Act), rather than the
    fiscal year. The advantages of being a calendar year contractor are
    significant: it provides the Rancheria with a stable funding base for
    its health programs and permits the Rancheria to generate additional
    funds in the form of interest. Historically the Rancheria's calendar
    year contract has been funded with funds entirely from the fiscal year
    in which the contract begins, although the calendar year contract
    period extends three months beyond the end of the fiscal year.
        In calendar year 1998 the IHS has implemented policies which
    violate the intent of Congress when it enacted Section 105(d). The
    Agency has taken funds appropriated in fiscal year 1997 for the
    Rancheria's calendar year 1998 contract and used them for other
    purposes, namely to fund activities at the Area Office level. These
    policies violate Congress' intent when it enacted Section 105(d) by
    threatening the Rancheria's stable base budget and by eliminating the
    Rancheria's ability to generate interest revenue to supplement funds
    which the IHS transfers to the Rancheria.
        The IHS' policy of retaining funds appropriated by Congress in
    fiscal year 1997 for the Rancheria's calendar year 1998 contract and
    using those funds for other purposes (while allocating fiscal year 1998
    funds which have not yet been appropriated to make up the deficiency in
    the contract). This violates the Anti-Deficiency Act, as well as two
    other provisions of the Act--Sections 106(b)(1) and (b)(3)--which both
    prohibit reduction in contract funds to make funding available for
    various federal functions.
        We urge Congress to make clear to the Indian Health Service that
    the Agency is required under the Act to fully fund calendar year
    contracts out of funds appropriated by Congress in the previous fiscal
    year. Only this policy can ensure that Congress' full intent behind
    Section 105(d) is fully implemented by the Agency.
        Contract support costs deficiency.--The Rancheria is disappointed
    that the Administration requests only $12 million in Contract Support
    Costs for the Indian Self-Determination Fund. Although this amount is
    an increase over the fiscal year 1997 enacted level of $7.5 million, it
    leaves a $39 million ISD Fund shortfall (demonstrated by a table at
    page IHS-117 of the IHS Budget Justification). This means that tribes
    which contracted new or expanded IHS programs in fiscal year 1995, 1996
    and 1997, will still go without the funding to which they are entitled
    under section 102(a)(2) of the Indian Self-Determination Act and be
    forced to absorb contract overhead costs from funding intended for
    health services. While it appears that the $12 million request is
    sufficient to address our Tribe's $218,009 ISD Fund requirement, one
    hundred percent funding of all identified Contract Support Costs is
    vital if California Tribes are to continue to assume administration of
    federal programs, for the benefit of Indians without being penalized by
    a reduction in the level of services.
        We urge the Committee to work with the Department of Health and
    Human Services to ensure that sufficient funds are provided in the
    fiscal year 1998 budget to meet the contract support requirements set
    forth in section 106(a)(2) of the Indian Self-Determination Act. We
    would also urge that reporting requirements be changed so that the IHS
    is required to provide the Congress with information on every contract
    or compact which is in the negotiation process and which will require
    funding from the contract support fund, in advance, not after the
    contract is signed. Presently, the IHS is only required to report a
    shortage of Contract Support funding for the current and previous year.
        Regional Youth Treatment Center.--Due to the size of the Native
    American population (over 200,000) and the geographic size of the
    state, the California Area has been authorized to operate two Regional
    Youth Treatment Centers (YRTC)--residential alcohol and substance abuse
    treatment facilities. Because these facilities are not yet available,
    services for the youth in our area have been contracted through
    existing public and private rehabilitation programs. The fiscal year
    1998 budget request for all regional treatment centers (youth and
    adult) includes $1.4 million for the California Area.
        After much time and effort by the California tribes, the research
    and deliberation has resulted in two appropriate sites for these
    facilities. We anticipate the Southern California location will come on
    line in early 1998. The Northern California site, which would serve the
    Susanville as well as other tribes, will be available late this year.
    The Susanville Indian Rancheria requests that an additional $1.4
    million be allocated from the fiscal year 1998 appropriations to fund
    the operation of the second YRTC. Funding the second YRTC will ensure
    the availability of treatment across the State and will enable the
    tribes and tribal organizations of California to provide a coordinated
    approach for the full range of preventive, YRTC and aftercare essential
    for successful prevention and treatment of alcohol abuse among our
    youth.
        Inequity of funding for California tribes and tribal
    organizations.--Since 1970, when Federal funding of IHS services was
    partially restored for Indians in California, IHS budget allocations
    have not provided an equitable base of recurring funds or an equitable
    level of health services. The GAO issued a report in 1991, entitled
    Indian Health Service--Funding Based on Historical Patterns, Not Need,
    GAO/HRD 91-5, February 1991, which confirms these facts. The report
    concluded that ``IHS does not attempt to provide the same level of
    health services in all IHS areas; in fact services vary widely.'' See
    (p. 3)
        Part of the reason IHS has never provided the Area Office a full
    and equitable share of the Contract Health Services appropriation is
    due to the level of service previously provided by the State through
    the Medi-Cal program (the state Medicaid program). In response to the
    budget crisis within California, however, the state instituted a
    massive reorganization of Medi-Cal, which drastically reduced both the
    scope and number of services available to Indians in California.
    California tribes are also no longer eligible for certain state-funded
    supplements and various categorical grants as these funds have been
    subsumed into block grants to clients. These actions combined have led
    to a reduction of health services to Indians in California.
        Any reductions to the IHS budget which does not protect the amount
    of contract health funds which the IHS is to provide California Tribes
    will cause additional reductions of health services to Indian in
    California and could disrupt the existing system of Indian owned and
    operated health centers. We urge that Congress (1) earmark the level of
    funds to be made available for the Indian owned and operated health
    delivery systems of California; and (2) from within the appropriation,
    earmark and increase the amount of funds for contract health services
    to be allocated to California tribes.
        Equipment funds.--The Tribe is disappointed that the Administration
    has requested only $13 million for Equipment, a decrease of $1.5
    million from fiscal year 1997. Of this amount, only $3 million (the
    same as in fiscal year 1997) will be used to purchase equipment for new
    and replacement clinics built by tribes using non-IHS resources. As we
    have testified before, in order to be certified to participate in the
    Medi-Cal Managed Care program, California tribal health clinics must
    purchase and install certain essential medical equipment. Be assured
    that unless there is a significant increase in Equipment funds, our
    Lassen Indian Health Center will be no closer to obtaining the over
    $300,000 necessary to complete the equipping which has been pending
    since we finished construction of the facility in 1994.
        We urge the Committee to not only increase the Equipment allocation
    but also direct IHS to develop a distribution methodology that factors
    for differences experienced by the small tribally-owned facilities.
        IHS scholarship fund.--The Rancheria urges Congress to fund, at a
    minimum, the Administration's requested level of $28.3 million for the
    Health Professions account. We urge the Committee to fund the IHS
    Scholarships allocation within this account to not less than the fiscal
    year 1997 level.
        Impact of managed care on tribally operated health programs.--The
    tidal wave of ``managed care'' efforts among state governments is
    having a negative impact on tribally-operated health care programs. The
    goal of managed care is not improving the health status of or providing
    the best quality of care to U.S. citizens. It is instead focused on how
    to provide those services at the lowest cost. This philosophy is in
    direct conflict with the circumstances of most tribally operated health
    programs. Tribal programs are often small, and located in rural and
    isolated areas, which drives up not only the costs of supplies but
    contract medical services. Consequently, our programs must be heavily
    weighted toward prevention, early detection, community outreach and
    primary care. Under this model of health care, we have a proven record
    of success in elevating the health status of our communities. But, this
    model does not fare well in the state managed care programs, where
    prevention and community outreach have little emphasis.
        In moving toward the market based managed care, consideration must
    be given to the impact on the tribally operated programs. As it stands,
    tribal consultation and input during state planning processes is not
    consistently sought. In some cases only the knowledge that the affected
    tribes can place a hold on a state's plan through HCFA has ensured our
    being at the table. We recommend that a waiver from being included in
    the state's managed care plan be available to tribally operated
    programs if the state will not recognize the health care model used by
    the tribe as a viable part of their plan. Furthermore, reimbursements
    should be commensurate with the services provided, not limited to the
    very lowest rates as is often the case now.
        Federal Tort Claims Act coverage.--The State of California is
    rapidly moving into a managed care environment. The Susanville Indian
    Rancheria has recently experienced difficulties in its efforts to
    participate with a major Health Maintenance Organization to provide
    services in the new managed care environment as a preferred provider.
    Based on our experience, few state officials fully understand the
    Federal Tort Claims Act (FTCA) and are reluctant to accept it's
    coverage in lieu of malpractice insurance for Public Law 93-638
    contractors who manage ambulatory health centers or inpatient
    facilities. State reluctance to accept U.S. Tort Claims protection
    places the tribal contractor at risk of not being accepted as a state
    provider under its Medicaid or managed care programs.
        Most recently, representatives from the HMO requested that the
    Rancheria provide a letter from an attorney representing the federal
    government which would be the equivalent to a ``certificate of
    insurance'' in the private insurance industry. They requested that such
    a letter make clear that the government, through the FTCA, provide
    coverage to the Rancheria for any and all tort lawsuits that may be
    filed.
        We would appreciate any assistance the Committee may provide,
    perhaps through clarifying report language, to make clear to HMOs in
    California that the FTCA provides tribes and tribal organizations with
    a level of liability coverage that is equivalent to the ``certificate
    of insurance.''
        Sierra Army Depot lands and facilities transfer.--Under the Base
    Realignment and Closure Act, the Rancheria has been negotiating with
    the Army on two proposals to transfer certain lands and facilities
    located on the Sierra Army Depot to the Rancheria. These proposals,
    which are pending final approval and which have been widely supported
    by the various appropriate agencies, would transfer: (a) 120 housing
    units and a large administrative building to be used for tribal
    housing, administration functions, and economic development and (b) a
    facility known as the ``the Mods,'' comprised of single apartments, a
    large fully equipped dining area and the adjacent land to be used as
    the Regional Youth Treatment Center referenced above.
        Although we have received support and assistance from the IHS, BIA
    as well as the Army, and obtaining the necessary approvals does not
    appear will be problematic, we request that this Committee adopt
    language similar to that which effected the transfer of modular housing
    units from the Grand Forks Air Force base to the North and South Dakota
    tribes.
        On behalf of the Susanville Indian Rancheria, thank you for the
    opportunity to provide our views to the Committee on the Indian Health
    Service budget for Fiscal year 1998.
                                     ______

               Prepared Statement of Rock Point Community School

        The representatives of Rock Point Community School located on the
    Navajo Nation Reservation, respectfully express our deep gratitude to
    this Subcommittee and the Congress for the past consideration of
    providing a replacement building for an unsafe secondary school.
    Construction was completed and our students have already been in the
    new facility of over 60,000 square feet now for the second year. We are
    also grateful for the provision for the Facilities Improvement and
    Repair (FI&R) funding, soon to begin as the next step to this
    construction.
        With the same hope as in the past, we wish to submit the following
    critical budget issues on behalf of Rock Point Community, the students
    and the staff of this school for favorable consideration.
        Rock Point Community which is located in the interiors of Navajo
    Nation reservation has a defined goal of providing quality bilingual
    education, with due emphasis for family values, and respect for our
    culture and language. On the other hand we also aspire to see that our
    children are true citizens of the United States. As such, we also
    concentrate on our children's achievement of core curricular knowledge
    of subjects like English, Math, Science, History and the governments of
    our state and the USA at par with or better than the national average.
        We have realized partial success in spite of funding shortages when
    we find our students graduating, some of them from colleges. In a
    community like ours, properly trained youth is the most important asset
    for our economic and social growth. Hence, we believe investment in the
    proper education of our students is an investment in the most
    appropriate direction. We also believe that our students presently in
    our school should not lag behind to meet the challenges of the
    technologically fast advancing world ahead of them.
                     funding for the classroom instruction
        The Indian School Equalization Program (ISEP) which provides for
    the basic instruction of Navajo and other Native American students has
    chronically been short of the minimum needs. The ISEP Task Force which
    had studied the minimum need of Weighted Student Unit (WSU) value about
    five years ago had recommended $3,499. This would have provided a
    standard education to Indian students comparable to average national
    standard. This amount was estimated to be comparable also with the
    national average in expenditures per student at that time. But
    regretfully, neither the Congress nor the Administration has been
    sympathetic to this need.
        The appropriation for this purpose in fiscal year 1996 yielded at
    $2,904 for school year 1996-97, $74 less than in the previous year.
    Appropriation for school year 1997-98 is estimated to produce $3,075 in
    school year 1997-98 if the student enrollment does not increase more
    than the 3.2 percent the BIA estimates. We can argue that, with an
    average WSU of 800, Rock Point School will get about $339,000 less for
    school year 1997-98 than the average per pupil expenditure for public
    schools in school year 1992-93. The result is that we have great
    difficulty competing to hire trained and qualified teachers who can
    stay and enjoy teaching at this school.
        The cost of classroom instruction has gone up by 6.13 percent per
    year. But the Congressional appropriation has been unpredictable to
    match with the increase, sometimes even less than the preceding year,
    as is the case in the current school year.
        This results in (a) a large turnover of qualified and experienced
    teachers, leading to disrupted curricular efforts in meeting the
    national standard; and (b) many BIA-funded schools, including this
    school, having to cut down instruction hours, or lay off experienced
    teachers or impose a salary freeze.
        Whereas the national concern is putting more funds toward
    educational efforts to produce the best high school graduates with
    separate funding for advanced technology in the schools, ISEP funding
    is far short in providing an education to match with the national
    standards. This is not to talk of the need for preparing our students
    technologically for tomorrow's world.
        If the 1868 Treaty obligation of providing quality and results
    oriented education to Navajo children has to be honored, the WSU value
    for fiscal year 1998 must at least be as much as recommended by the
    ISEP Task Force for School Year 1993-94, i.e., $3,499. Thus the ISEP
    appropriation should not be less than $333.8 million.
                             student transportation
        Transportation of the students from home to school is as important
    as classroom instruction. For Rock Point Community, which is scattered
    over a radius of 15 miles, most of the students' homes or a meeting
    point is accessible only by dirt roads. These roads become very muddy
    or icy during the winter, necessitating extra expenditures for
    maintenance and repair.
        Not only that, the mileage count does not include most of the
    extracurricular activities nor mileage incurred for repair or
    maintenance and, in the case of some schools, for fueling the buses.
    For Rock Point, the nearest place for maintenance and servicing is
    around 250 miles round trip. Our buses are 6 to 8 years old, guzzling
    more gasoline and requiring more frequent repairs. It is unfortunate
    that whereas GSA rental rates have again been increased, the mileage
    rate that BIA provides is almost constant.
        The cost of transportation is short at least by 30 percent on
    average at the rate the mileage has been provided in the last several
    years. The statistics below will illustrate the fact. This is mainly
    because our transportation funding has so far fluctuated at $1.51 to
    $1.55 a mile. The actual cost of transportation for Rock Point is $2.43
    per mile. It is worth noting that the national average of
    transportation funding two years ago was $2.34 a mile.

                                                 COST OF TRANSPORTATION
    ----------------------------------------------------------------------------------------------------------------
                                                                                                ISEP
                             School year                            Minimum        BIA        dollars     Percent of
                                                                      need       provided       used       shortage
    ----------------------------------------------------------------------------------------------------------------
    1995-96.....................................................     $479,316     $323,800     $155,516         32.5
    1996-97.....................................................      523,732      359,100      164,632         31.4
    1997-98 (estimate)..........................................      523,455      401,300      122,155         23.3
    ----------------------------------------------------------------------------------------------------------------

        We have tried to minimize our transportation costs by cutting down
    on extracurricular trips for the students. As the mileage remains
    almost constant, the dipping into classroom instruction funds does not
    increase. But we cannot ignore the fact that extracurricular activities
    are an important part of education.
        We cannot keep our transportation cost limited to the funding
    provided, because, if the students are not brought to school from home,
    we will neither be fulfilling our obligation to the community nor will
    there be much of a class.
        We, therefore, urge that transportation be funded at a level that
    each BIA-funded school gets at least a rate of $2.43 per mile. This
    will require Congress to appropriate at least $47.7 million. Then and
    only then, will we be able to stop using ISEP funds for transportation.
                     operation & maintenance of facilities
        This fund for which the minimum need for a school is determined by
    the use of a FACCOM formula is another area chronically short of funds.
    On the average not more than 67 percent of the needs assessed by the
    formula has been provided in the last several years. This results in
    continual deterioration of the facilities, creating an unhealthy and
    counter productive educational environment. The deterioration of the
    facilities causes further need of Facilities Improvement & Repair fund
    which is lagging so far behind. Though there has been a slight increase
    of $5.3 million in this fund for the fiscal year 1997 budget, we doubt
    that it will be able to fund even 90 percent of the need. If a similar
    amount is added in the fiscal year 1998 budget, we estimate it will
    again meet about 90 percent of the need based on the fact that some new
    schools have been constructed and the area to maintain has increased or
    will increase by nearly 800,000 square feet, as a consequence.
                    quarters repair and improvement funding
        Rock Point Community School has 57 units of housing for an average
    of 130 employees each year. Out of the total, five units have been
    vacated for life safety reasons. Most of the units were built in the
    1960's and all of them need renovation to meet minimum safety
    requirements.
        Also, as in the past, we again request to build 15 to 20 new
    housing units to meet the shortage and to replace 22 portable houses,
    all of which have asbestos contamination.
        We urge this subcommittee to approve this request again and provide
    an adequate sum for the purpose.
                            administrative cost fund
        Distribution of the Administrative Cost fund has been somewhat
    encouraging in the last couple of years as it was distributed 100
    percent in the last year and it is expected at 94.4 percent in the
    current year. However, the increase of $5.6 million for fiscal year
    1997 should not be counted to increase the percentage of the payment as
    slated for the number of BIA-operated Navajo schools converting to
    Grant or Contract Schools. Since more and more BIA-funded schools are
    intending to turn grant or contract every year, we find that an
    addition of a similar amount each year to the previous year's
    allocation will merely keep up with the increase in the number of those
    additional schools for whom Administrative Costs will be needed.
        We, therefore, respectfully urge this Committee to increase the
    fiscal year 1997 appropriation for the Administrative Cost Fund by at
    least the same amount, or $5.6 million.
                                   conclusion
        The Rock Point Community, its school students and staff understand
    and appreciate the necessity of balancing the national budget. However,
    we have observed in the course of several years that Indian Education
    and its concerns, more specifically its funding needs, have been
    treated as a low priority for the Administration as well as the
    Congress. This has resulted in pushing our students farther and farther
    behind the national norm. We believe that an increase of $40-$50
    million for Indian Education would have a negligible impact on efforts
    to reduce the national deficit, but it really would help Native
    American students to meet the national standards.
        We also believe that our students are the main resource of the
    economic and social advancement of our community and that proper
    education at par with the national average is an investment of which
    they should not be deprived.
        We hope that the Navajo Community of Rock Point and other Native
    Americans will not be disappointed by inadequate funding for the
    education of our children in fiscal year 1998 and that the Congress and
    the President will honor the Treaty obligation with the tribes for the
    quality education of their children.
        We are thankful again to this subcommittee for its past support to
    Indian Education in general and to the Rock Point Community School
    particularly. We hope that our request today will receive the
    Committee's due consideration. Thank you.
                                     ______

          Prepared Statement of the Pinon Community School Board, Inc.

        The Pinon Community School Board submits this statement on behalf
    of the Navajo people in the Pinon Chapter and surrounding communities
    of the Navajo Nation.
                         ihs clinic for pinon community
        Our community (Pinon and seven other Chapters of the Navajo Nation)
    has not had a health facility capable of addressing even a fraction of
    our health needs for several decades. Infrastructure development in our
    area was totally halted for 18 years while the Navajo-Hopi boundaries
    were worked out. And after that boundary was established in 1979, our
    efforts to obtain a decent health facility have been prevented by a
    lack of funding. How much longer must we wait?
        The clinic IHS has planned is not a luxurious one. It would provide
    full-time basic and emergency medical services, optometry, some
    physical therapy, community health services, a mental health and
    substance abuse unit, community health representatives and related
    community-oriented health services.
        What we have now is called a ``health station'' which operates only
    three days per week. The only services provided are minimal nursing
    support, a pharmacy, some lab work, and dental services. The nearest
    location with a doctor is in Chinle--50 miles from Pinon, and even
    further away for the Chapters to the west of Pinon. The 11,000 people
    in the Pinon clinic service area deserve to have more accessible health
    care than this.
        The first formal approval of the Pinon Clinic came in 1992 when PHS
    approved the project justification document. Basic planning, site
    selection and most of the design has been done, but the design money
    will be exhausted this summer and all work will halt unless Congress
    provides funding for fiscal year 1998 to at least complete the design.
        IHS estimates that we need $31.7 million to finish the design and
    perform the construction phase. That estimate will increase every
    year--especially if we have to stop the design work this year. We
    urgently request that Congress make a commitment this year to this
    urgently needed clinic. Please provide at least the $873,000 to
    complete the design and put this project on line to receive first phase
    construction funding in fiscal year 1999. Even at that rate, we will
    have waited a full generation for basic medical services to be made
    available in our Community.
                          bia school operations budget
        Indian student equalization program.--The total request of $296.3
    million is not sufficient for the ever-increasing operating cost of the
    operation of schools and dormitories in Indian Country. In recent
    years, growth in enrollment in Bureau-funded schools has averaged
    between 2-5 percent per year. And between this school year (1996-97)
    and school year 1998-99, BIA expects enrollment to jump 6.5 percent.
    Yet the budget request would supply only $19 per weighted student over
    the base amount for next year. As you can see, this would not even
    cover inflation-related cost increases, let alone cover the costs
    associated with additional students or provide any meaningful dollars
    for program improvement.
        We hope Congress will not be satisfied with the fiscal year 1998
    budget request. At least provide enough money to keep up with
    enrollment.
        The Pinon Community School Board further suggests that there is a
    need to re-examine the ISEP Formula by which funds are distributed to
    the schools and dormitories in the BIA system. When Congress
    established this formula methodology in 1978, it expected that the
    formula would be re-examined by BIA on a periodic basis and that up-
    dating alterations would be made. This has not occurred. Rather, the
    only changes in the formula have been made by Congress itself, through
    statutory directives such as additional weights to recognize the
    additional costs of operating seventh and eighth grade programs, and
    for gifted and talented student programs.
        We ask you to supply direction and funding for BIA to perform the
    needed re-examination of the ISEP Formula to more appropriately measure
    the true total funding needs of the schools and dormitories in the 21st
    Century. That formula should be based on the highest standards of
    program quality and educational opportunity for the Indian students
    enrolled in these federally-funded schools.
        Student transportation.--The President's Budget requests $34.302
    million for student transportation--a slight increase of $2.5 million
    over the fiscal year 1997 level. For many years, this program has been
    underfunded, requiring us to use ISEF monies to supplement our
    transportation costs.
        The budget request would provide only $1.60/mile, while our
    School's transportation costs are about $2.35/mile. These costs will
    definitely increase due to two circumstances beyond our control:
      --This year GSA has been relieved of the moratorium on increases in
            its bus rental rates. Yet there is no additional funding in the
            budget request to help up meet these additional expenses.
      --One hundred percent (100 percent) of our bus routes are on BIA road
            systems and these roads need improvement. Since these roads are
            not properly maintained, they cause great wear and tear on our
            buses. And there is no additional funding in the student
            transportation budget request to help us meet these added
            expenses, either.
      --Please bring some common sense to the student transportation
            budget. In view of the average cost per mile to public
            schools--$2.92, according to the BIA--a doubling of the funds
            for the BIA system would not be out of line.
        Administration cost grants.--Pinon Community School Board is
    equally concerned about the President's Budget request of $44.7
    million, an increase of only $2.55 million from the fiscal year 1997
    amount. The biggest concern is insufficient funds to accommodate the
    anticipated Bureau schools converting to Contract and Grant Schools,
    thereby making them eligible for Administrative Cost Grants.
        Please ask the BIA to supply full, detailed information about the
    estimated Administrative Cost Grant need for each of the schools that
    will convert in School Year 1998-99. As you know, unless there is
    sufficient funding in this budget item, BIA will reduce every schools
    Administrative Cost Grant amount and thus none of us will get the
    funding level directed by law.
        Facilities operation & maintenance.--The facilities O&M funding
    will continue to shrink as new square footage is added to the BIA
    school facilities inventory. This year alone (fiscal year 1997), a
    total of 800,351 in new square feet will be added which will require an
    additional $3.1 million in additional facilities O&M funding. But this
    added amount is not requested in the BIA budget request. As a result,
    the percentage of need that is funded will fall even lower than the 66
    percent of need we currently get.
        It makes no sense to us for the Federal Government to build new
    schools and dormitories--such as the $16 million construction project
    we just finished at the Pinon Dorm--and then fail to provide enough
    funding to maintain these buildings so that can be utilized for their
    full expected life. Next year, after the warranty on our new buildings
    expires, we will have to provide the full array of maintenance
    services, but we will not have the funds we need to properly protect
    the big investment the Federal Government has made in them.
        We appreciate the opportunity to offer our views on the President's
    fiscal year 1998 IHS and BIA budgets.
                                     ______

        Statement of Wallace Tsosie, Vice President, Greasewood Springs
               Community School, Inc., Navajo Nation, Ganado, AZ

        The Greasewood Springs Community School, Inc. is located on the
    Navajo reservation in the community of Lower Greasewood, which is
    approximately 70 miles west of Gallup, New Mexico, and 110 miles
    northeast of Flagstaff, Arizona. Our school serves the educational
    needs of over 390 students, in grades Kindergarten through eighth.
    Since July 1, 1996, the School has been operated by a local Board of
    Directors through a Grant from the Bureau of Indian Affairs pursuant to
    the Tribally Controlled Schools Act, Public Law 100-297. The Greasewood
    School currently faces two serious problems: the need for a safe
    gymnasium facility, and the lack of an adequate health care facility.
                   a gymnasium is badly needed by the school
        The Bureau of Indian Affairs has requested $3.14 million in fiscal
    year 1998 for construction of a gymnasium facility for the Greasewood
    School, as an education Facility Improvement and Repair Project. We
    respectfully ask this Subcommittee to approve funding for this project,
    but would ask you to make two additions to it:
      --$206,000 for unexpected demolition costs. When the original budget
            estimate was calculated several years ago, the BIA estimated
            that the cost to remove an existing structure on the site would
            be $150,000. Now that the demolition is complete, the BIA has
            informed us that the actual cost was $356,000, due to the
            discovery of significant asbestos in the previous structure,
            and that we must reimburse BIA for this amount once
            construction funds are appropriated. Since the $3.14 million
            request does not include this additional cost, we respectfully
            ask that this Subcommittee approve an additional $206,000 for
            our gymnasium.
      --$125,600 for basic design elements not provided for in the current
            construction budget, including: a pitched roof for the
            gymnasium (lasts longer in our climate); hardwood gymnasium
            floor (standard in all gymnasiums); asphalt paving (to reduce
            dust and mud); and landscaping. These items will greatly
            improve the quality of the gymnasium, for a modest additional
            cost.
        In sum we request a total of $3.47 million to allow for the
    construction of quality gymnasium that will last for many years. We
    also ask this Subcommittee to approve the other projects contained
    within the President's request of $32,139,000 for Facility Improvement
    and Repair Projects.
        This gymnasium facility is desperately needed by our School, and
    was promised to the School over ten years ago. In 1985, declining
    enrollments lead the Bureau of Indian Affairs to seek consolidation of
    Toyei and Greasewood Schools, both located in communities southwest of
    Ganado on the reservation of the Navajo Nation. To induce Greasewood to
    consent to this consolidation, the Central Office of the Office of
    Indian Education Programs agreed in 1985 that a new gymnasium would be
    constructed at the Greasewood School once the consolidation was
    completed, since the existing facility had no gym and the space used
    for physical education was inadequate. The communities consented, and
    the consolidation occurred with the consolidated facility called
    Greasewood Springs Community School. Over ten years have passed since
    Toyei and Greasewood were consolidated, yet a new gymnasium has still
    not been constructed.
        The space currently used for physical education was not built as a
    gymnasium; it had to be modified to provide some space for physical
    education training to be held. According to a recent evaluation by the
    BIA's Navajo Area Engineering Office, this physical education space is
    undersized by 5988 square feet, representing a 110 percent deficiency
    for a student body the size of Greasewood. The space used for physical
    education is situated in the center of the school building and is
    surrounded by classrooms. This configuration hinders instruction, as
    the noise and flow of student traffic associated with gym classes often
    interrupts classroom instruction.
        Further, there is not adequate outdoor space adjacent to the
    current facility for student athletic activities or parking. In fact,
    the outdoor space around the current facility is hazardous to the
    safety of the students because of its close proximity to several major
    access roads. Thus, the need for safe outdoor athletic space and
    adequate parking for sporting events is particularly acute.
        At present, the gymnasium project is being handled by the Navajo
    Nation Design and Engineering Service (NDES) through a Public Law 93-
    638 contract with the BIA's Facilities Management and Construction
    Center (FMCC). NDES has completed the planning phase of the project;
    the design phase is nearing completion and should be concluded within a
    few months. The local Board of Directors is in the process of assuming
    control over this project from NDES. Once this transfer has been
    accomplished, the Board of Directors will complete any remaining design
    work, and then oversee actual construction of the gymnasium. If the
    necessary construction phase funding is provided by Congress, actual
    construction of the gymnasium should take less than a year.
        The Board of Directors hopes that a new gymnasium for the
    Greasewood School will finally be constructed in fiscal year 1998. The
    planned gymnasium will be approximately 13,500 square feet, which is
    consistent with BIA space guidelines for a school of this size.
        We respectfully ask this Subcommittee to provide $3.47 million for
    completion of the Greasewood gymnasium. This facility is desperately
    needed by the School. Providing this funding would keep a promise made
    to the Greasewood School over ten years ago, and ensure that the
    students of Greasewood have a safe facility suitable for their physical
    education needs. Please do not make us wait any longer.
                a health clinic is needed for greasewood school
        We also would like to alert the Members of this Subcommittee to the
    inadequate level of health care available to the Greasewood community.
    Despite an estimated service population of over 3,000 people, the only
    health facility in our community is a small clinic located on the
    campus of the Greasewood School, which is only staffed by a doctor one
    day a week. This level of service is totally inadequate for the medical
    needs of the Greasewood community.
        The Greasewood Clinic is currently operated by Sage Memorial
    Hospital, a contract care provider, but the Hospital has proposed to
    eliminate this clinic program. The next closest health facility, Sage
    Memorial Hospital, is over 40 miles away, and the nearest IHS facility
    is over 80 miles away.
        The Board of Directors is in the process of developing a plan to
    improve the existing clinic, possible through a Self-Determination Act
    contract with the IHS, or a joint services arrangement with Sage
    Memorial Hospital. Once an adequate plan is developed, the Board of
    Directors will return to this Subcommittee with a request for earmarked
    funds in the IHS budget for a properly staffed health clinic for our
    community. Thank you.
                                   conclusion
        We appreciate this opportunity to present the needs of our School
    to the Members of the Subcommittee. We strongly urge you to take the
    steps necessary to provide adequate construction funding for a
    gymnasium for our school, and to be alert to the health care needs of
    our community. Thank you.
                                     ______

      Prepared Statement of Paul A. Rooks, Chief of Police, Oglala Sioux
                        Tribal Public Safety Commission

        The Oglala Sioux Tribal Public Safety Commission (``Commission''),
    the law enforcement agency on the Pine Ridge Indian Reservation,
    submits this statement in support of the Administration's request for
    an increase of $46.665 million to the Tribal Priorities Allocation
    (``TPA'') account, which increase includes $8.7 million for law
    enforcement. We request that Congress place law enforcement allocations
    in a special account outside of the TPA account to insulate tribal law
    enforcement programs from any future cuts to the TPA account. We
    request that Congress continue efforts in funding programs under the
    Violent Crime Control and Law Enforcement Act of 1994 (the ``Crime
    Bill'').
        The commission.--Under the Act of February 28, 1877 (19 Stat. 25),
    in consideration for the confiscation of Sioux lands and hunting rights
    worth billions of dollars today, the United States undertook to provide
    the Oglala Sioux with ``all aid necessary for civilization'' and ``an
    orderly government,'' and to ``protect [each Oglala] in his rights of
    property, person, and life.'' Originally, law enforcement was performed
    on the Pine Ridge Indian Reservation by the BIA. Since 1977, the
    Commission has provided public safety and enforcement of tribal,
    federal, and state laws pursuant to a contract with the BIA under the
    Indian Self-Determination Act, Public Law 93-638, as amended. The
    Commission currently employs approximately 36 officer positions under
    its Self-Determination Act contract with the BIA, and 62 officers using
    Crime Bill grants from the Department of Justice (``DOJ'').
        Pine Ridge Indian Reservation.--At 4,800 square-miles, the Pine
    Ridge Reservation is the second largest Indian reservation in the
    United States. It includes Shannon County, the poorest county in the
    United States according to the 1980 and 1990 censuses. The unemployment
    rate on the Reservation is about 85 percent, and is expected to
    increase due to federal budget cuts. The alcoholism rate is also very
    high. Poverty is expected to increase as a result of the Welfare Reform
    Act.
        Need for increase for BIA & tribal law enforcement.--The BIA Budget
    Justification (p. BIA-62) for fiscal year 1998 notes that national
    standards recommend three law enforcement officers per 1,000 citizens,
    but that the BIA has adequate funds for only one officer for every 43
    square miles of reservation and for every 465 members of service
    population. The proposed $8.7 million increase for law enforcement
    would be sufficient to hire 400 additional officers in Indian country--
    not enough to meet the unmet need, but a step in the right direction.
        The Commission's unmet needs.--The Commission is in urgent need of
    its share of the requested increase within the TPA account to meet some
    of its more severe unmet needs. If Congress approves the requested
    general increase of $8.7 million, the Commission could realize an
    increase of approximately $450,000. These added funds could assist the
    Commission in the following manner:
        Need to hire more officers on a permanent basis.--The Commission
    has historically not received adequate funding from the BIA under its
    Self-Determination Act contract. With a service population of about
    50,000, the Commission would need 150 officers to meet the national
    standards mentioned above. In fact, the Commission would need about 110
    officers just to meet the BIA average level of law enforcement
    services, based on its service area and population. But the Commission
    has never been able to hire anywhere near this many officers.
        In fact, as the result of the fiscal year 1995 BIA budget cut,
    which decreased the Commission's BIA contract funding by nearly
    $284,000, the Commission had to reduce the number of officers funded
    under its BIA contract from 56 to 36. This would have nearly crippled
    law enforcement on the Pine Ridge Indian Reservation if the Commission
    had not applied for and received DOJ grants.
        The DOJ recognized the severe underfunding and understaffing of the
    Commission, and provided the Commission with grants under the Crime
    Bill, which enabled the Commission to hire an additional 62 officers
    starting in July 1995. A recent BIA study of the Commission (the
    ``Review Team Report'') stated: ``These grants represent an impressive
    and determined effort on the part of Public Safety to secure additional
    resources.'' The DOJ grants have helped immensely to alleviate the
    shortage of officers, but only on a temporary basis. The grants last
    only 2\1/4\ years, and the oldest of the three grants expires in
    February 1998. Thus, additional funding must be obtained in the interim
    in order to retain these officers; otherwise, the Commission will be
    left eventually with only 36 officers--fewer than it has ever had and
    far fewer than the numbers needed, as noted above.
        Officers are being trained to do ``Community Policing'' throughout
    the Reservation under these grants. The Commission is also utilizing a
    cultural approach coinciding with community policing that emphasizes a
    traditional ``Akicita'' (warrior) society which complements community
    policing. It is the intention of the Commission to implement this
    concept through all facets of law enforcement in the next three years
    in conjunction with community policing. Other grants under DOJ have
    allowed the Commission to mobilize towards automation, additional
    training, and specialized services.
        Adequate salaries for officers.--After the Federal Law Enforcement
    Pay Reform Act of 1990, Public Law 101-509, raised the minimum wages
    for federal law enforcement officers, Congress increased the BIA
    appropriation by $5.8 million (fiscal year 1992 and fiscal year 1994
    total) to bring the salaries of BIA and tribal police officers up to
    Pay Reform Act levels. The BIA distributed this money proportionately
    to all BIA-funded law enforcement programs, however, rather than
    according to each program's need. The Commission's share of these
    increases ($188,400) was about $400,000 short of the amount needed to
    bring Commission salaries to the mandated levels. The Commission was
    able to bring salaries up to or close to the mandated levels in fiscal
    year 1994 by reprogramming other funds, but our officers' wages have
    lagged behind the Pay Reform Act levels since July 1995, when the
    reprogrammed funds ran out.
        It is ironic that the recent BIA Review Team Report found ``a high
    rate of turnover at the police officer position,'' which ``is very
    costly'' to the Commission, but also stated that the Commission need
    not pay its officers the salaries set by the Pay Reform Act. The Report
    should have acknowledged the obvious--that the high rate of turnover
    has been due in large part to the Commission's inability to pay
    adequate salaries.
        Overall need for equipment.--The BIA Review Team Report supports
    what the Commission has been saying for years--we need more equipment.
    The report shows that officers and criminal investigators do not have
    all of the equipment they need to perform their jobs. We agree, and we
    have been working to correct the situation, but we cannot remedy the
    problem without increased funding. Perhaps the best example of this is
    the report's recommendation that the communications system be upgraded
    and enhanced. For several years we have requested (either through a
    one-time appropriation or out of the BIA's law enforcement budget)
    $235,000 to remedy this situation, but the funds have not been
    provided.
        Special need for equipment for new hires.--The Commission has no
    funds to purchase basic equipment for the 40 new officers hired in
    September 1996 with DOJ funds. A total of $350,800 is needed for
    uniforms, service revolvers, radios, leased vehicles, and other items.
    The DOJ funds cannot be used for these expenses. Due to lack of funding
    for these items, new hires have had to borrow equipment from other
    officers, buy the equipment using their own money, or make do without
    the least essential items.
        Conclusion.--In furtherance of its recognition and support for law
    enforcement generally, and for the safety and welfare of the Indian
    people, Congress should support the Administration's request for an
    increase of $8.7 million in the TPA account for law enforcement.
    Congress should also continue funding under the Crime Bill.
                                     ______

                  Prepared Statement of the Narragansett Tribe

        The Narragansett Tribe appreciates the opportunity to address the
    subject of Indian Health Service (IHS) and Bureau of Indian Affairs
    (BIA) funding needs for fiscal year 1998. Since Federal acknowledgment
    in 1983, we have exercised our right of self-government to contract
    programs serving Indians under the Indian Self-Determination Act. We
    contract and operate 13 BIA-funded programs as well as a comprehensive
    health program from the IHS, employing many of our tribal members to
    provide essential services to our more than 2,000 members. Our comments
    on the fiscal year 1998 budgets for IHS and BIA are as follows:
      --IHS (Hospitals and Clinics). Fully fund staffing and equipment
            needs for our new health clinics through an earmarked
            appropriation of $947,949 to bridge the shortfall we face in
            bringing our new clinic fully on-line.
      --Fund mandatory pay increases for salaries, inflation and population
            growth.
      --Fully fund Contract Support Costs.
      --BIA (Tribal Priority Account). Support, as a minimum, the
            President's fiscal year 1998 budget request for TPA.
      --Fully fund Contract Support Costs.
        IHS budget (staff and equip Narragansett health clinic).--In 1991,
    the first year we testified before this subcommittee, we identified as
    our goal the establishment, on our reservation, of a tribally operated,
    out-patient health clinic to provide essential health services to our
    tribal members. We are proud to report to you that in November 1996 our
    goal was achieved with the construction and dedication of a 5,000
    square foot health clinic. We obtained private financing to build our
    health clinic from Washington Trust Bank. This would not have been
    possible, however, without a 90 percent BIA loan guarantee from the
    Eastern Area Office. The facility contains a Primary Health Clinic,
    Community Health program, Behavioral Health/Family Services, and
    Administrative Services. This is a proud achievement for our Tribe, but
    we will only recognize a portion of the clinic's potential due to a
    shortage of funds. We need your assistance if we are to realize the
    full potential of our direct service clinic.
        The IHS has informed us that they are without funds to staff and
    equip our facility. In a February 24, 1997, letter from the IHS to the
    Tribe (enclosed), we have been informed that ``there are no health
    service funds available from the IHS at this time to support your new
    facility'' and any additional funding for our Tribe's program needs
    ``would have to come from the Congress.'' With the exception of
    ``some'' Maintenance & Improvement and equipment replacement funds in
    the fiscal year 1998 budget, the agency is without funds to meet our
    needs. On top of this, the IHS expects to absorb approximately $100
    million in inflationary costs this year.
        In a meeting with Dr. Trujillo, his staff, and a representative of
    the Nashville Area Office February 3, we were informed that IHS policy
    does not recognize our clinic as an ``expanded'' program, thereby
    making us ineligible for existing IHS dollars. We are neither a ``new
    tribe'' nor are we an ``expanded'' program in the eyes of the IHS. We
    alerted the IHS Nashville Area Office in 1995 that we would soon have
    our clinic. They informed us then that we could not submit a new scope
    of work and budget for the clinic until it was actually built.
    Nonetheless, we thought that they were anticipating our clinic coming
    on-line and would include the required funding for staffing,
    maintenance and improvement funding and other start up expenses in the
    upcoming IHS budget request to Congress. We certainly believed that
    under existing law, as we expanded our scope of service, building a
    clinic which did not previously exist and transferring from a referral
    health care service to a direct care, out-patient facility, we would be
    eligible for ``new and expanded'' health program funds. This turns out
    not to be the case.
        Dr. Trujillo did not know where additional funds could be made
    available to the Tribe. We are greatly distressed by the position of
    IHS which regards tribes such as us, which prior to contracting health
    services under Public Law 93-638, received no health services from the
    Department, as ineligible for ``new and expanded'' program funds.
        Today, we are presently in transition from a referral based health
    program, whereby we referred our members to the surrounding medical
    community for their health care needs, to a more cost-effective direct
    service, health care system where we will hire local health care
    professionals to work full and part-time at our health clinic. Direct
    service health care provided under one roof will ensure that each
    dollar goes farther and that better health care will be administered to
    our members. Contract Health Service (CHS) referral costs totaled
    $700,000 in 1996 alone. We have cut our CHS budget by more than 50
    percent, using these funds for staffing needs, but this only permits us
    to fill 17 of 27 health care positions, leaving us with a 37 percent
    staffing shortage. By moving CHS funds to staffing needs, we are
    increasing our need for Contract Support Costs which are already
    inadequate. Staffing funds require Contract Support funds. We will,
    however, save money in the long term.
        Our current operating budget of $1.2 million will allow us to only
    bring on-line a portion of our clinic. Without additional
    appropriations we cannot afford to hire: a nurse technician; a
    pharmacist; a licensed practical nurse; a social services medical
    social worker; a social services patient services coordinator; a
    Behavioral Health Service psychologist or psychiatrist; a Health and
    Human Services Director to manage the clinic; an Administration
    Planner; a Business Office Manager and Patient Services Coordinator;
    and maintenance personnel.
        Until our full-time physician begins work in July, we have
    contracted with two local physicians to work part-time (2 days/wk) at
    the clinic. A licensed psychologist is working 1 day a week at the
    clinic. Our Community Health Service staff is conducting one-on-one
    sessions and intake for on-going contract referral health care needs
    until the clinic is officially open for business. Additional staffing
    needs alone will account for 48 percent of the additional $948,000 we
    are requesting. If we could afford a pharmacy, that would reduce our
    pharmaceutical costs by some 40-50 percent, saving us some $75,000 to
    put toward staffing needs. Pharmaceutical expenses totaled $170,000 in
    1995 alone. We enclose a budget of our health care needs.
        Third party billing of Medicare and Medicaid will allow us to make
    up some of the funding shortfalls and we hope that future health care
    reform will not deprive us of this necessary revenue source. The
    University of Rhode Island has offered us resources from their
    Audiology, Speech Pathology, Pharmacy and Nursing departments, and
    Rhode Island College has made a graduate level student in Social
    Services available to us as well as other resources. We are grateful
    for their assistance, but we still face severe funding shortfalls.
        Our greatest medical challenge is monitoring and addressing the
    needs of our diabetic patients. Screening, preventive care and
    treatment of our 75 existing patients is very costly. Our Tribe has an
    unemployment rate near 40 percent. Of the last 10 cases of diabetes
    discovered, 8 were uninsured. To meet minimal standards requires a
    commitment of roughly $2500 per patient, or $187,500 annually. Through
    clinic screening and early detection, we estimate that the number of
    diabetic patients we serve may double in 1997, as we must now serve all
    Indians who enter our clinic. CHS referral funds, however, are only
    available to members residing in Washington County.
        In addition, new welfare reform legislation has decreased funding
    for welfare mothers receiving Ritecare funds administered by the State.
    Children remain eligible for this funding through age 7, after which
    the Tribe becomes responsible. These children must now be covered under
    our Contract Health Services funding which we reduced 54 percent to
    cover staffing needs. We have some 37 pregnancies, 90 percent of which
    are low-income, most of which are high-risk.
        In conclusion, we do not know how we are going to cover these
    shortfalls as well as absorb the costs associated with population
    growth, medical inflation and pay increases. By moving from a contract
    referral health care program to a direct service program, we anticipate
    cost savings which will help but not fully cover our start up needs. We
    are doing our part to stretch existing funding to provide essential
    health services to our members. Without additional funding from
    Congress, we have no choice but to limit the health services we can
    provide to our members. We ask that Congress continue to assist all
    tribes in meeting the health needs of the Nation's First Americans by
    adequately funding the IHS budget to increase the level of need we
    provide.
        BIA budget.--We request that Congress, at a minimum, fund TPA at
    the President's fiscal year 1998 budget amount. As with the IHS budget,
    we continue to experience chronic shortfalls in carrying out contracted
    programs from the Bureau of Indian Affairs. Human Services programs
    such as Indian Child Welfare Act are so underfunded (and actually will
    decrease in fiscal year 1998 from the fiscal year 1997 level) that we
    simply cannot afford legal representation to monitor foster care
    placement of our tribal children. Education funding under Johnson
    O'Malley is slated for about a million dollar decrease under the
    President's fiscal year 1998 budget. Our Adult Vocational Training and
    Scholarship programs cannot keep pace with our need. Law Enforcement
    funding remains at the ``feasibility study'' phase of $10,000. For the
    past several years, we have emphasized the need for law enforcement
    funding. We have no alternate revenues (we possess no natural resources
    and have been denied the ability to raise revenue through gaming on our
    settlement lands by the 104th Congress) and cannot take funds from
    other TPA programs, which are strapped for funding, to establish an
    adequate law enforcement program.
        Since the 1994 First Circuit decision, there is no longer a
    question that we exercise civil, criminal and civil regulatory
    jurisdiction over our settlement lands concurrent with the State. The
    local police do not patrol our lands and the State police are more than
    20 minutes away. We have a new health clinic and community center which
    must be patrolled. We have applied for and been denied grants from the
    Department of Justice (COPS FAST and COPS MORE) because we didn't have
    even one full-time law enforcement officer.
        Finally, Congress must fully fund contract support costs which
    enable tribes to meet their administrative expenses associated with
    carrying out our programs. Congress has long recognized the need to
    fund this essential component. Each year tribes like us must make up
    for contract support cost shortfalls by using direct program funds,
    limiting the effectiveness of our already financially strapped
    programs. The Indian Self-Determination Act is clear--the Secretary
    must fully fund contract support cost needs. We request that Congress
    fully fund this essential program cost as required by law.
        Thank you for providing the opportunity for the Narragansett Tribe
    to provide comments regarding the fiscal year 1998 BIA and IHS budgets.
                                     ______

        Prepared Statement of Eric R. Davenport, Chairman, Intertribal
                             Monitoring Association

        The Intertribal Monitoring Association on Indian Trust Funds (ITMA)
    submits this statement in support of the Administration's fiscal year
    1998 budget request for the Office of Special Trustee for American
    Indians within the Department of the Interior. While we support the
    budget request, we also want to make it clear that an appropriation of
    the $39.3 million which has been requested will not be sufficient to
    enable the Special Trustee to implement the trust fund management
    systems which are necessary to correct the century of mismanagement of
    Indian trust funds and assets.
        The Intertribal Monitoring Association on Indian Trust Funds is an
    organization composed of 34 Indian Tribes which represent over 80
    percent of the trust funds managed by the Office of Special Trustee.
    ITMA was created in 1990 to monitor federal efforts to improve
    management of Indian trust funds and to keep the Congress and the trust
    fund account holders more fully informed. Among the tasks charged to
    ITMA by our member tribal governments are preparing tribes for account
    settlement by providing analysis of the reconciliation reports and
    technical assistance in analyzing tribal specific reports; assisting in
    the development of objective, fair and accurate methodologies for the
    reconciliation of the IIM accounts; and obtaining tribal input on
    continued implementation of the Trust Fund Management Reform Act.
        ITMA supports the proposed fiscal year 1998 level totalling $39.3
    million, an increase of $5.2 million over the fiscal year 1997 level.
    The $5.2 million requested increase would provide additional resources
    for trust systems improvements, but is far short of the funding needed
    to implement a plan to correct the existing flawed systems. ITMA also
    supports the proposal to increase staff of the Office of Special
    Trustee by 22 Full-Time Equivalent employees over last year, for a
    total staff of 310.
        We appreciate the fact that the Administration's request contains
    $250,000 in fiscal year 1998 for ITMA, however we must note that this
    amount is not sufficient for ITMA to be able to fully meet its
    responsibilities to Tribes, the Congress and the Department. Our
    experience since the formation of ITMA in 1990 tells us that annual
    funding of $400,000 is needed to enable us to promptly and accurately
    monitor developments in the management of trust funds and provide
    timely information to the account holders and the Congress. We
    respectfully request that the Subcommittee consider funding for ITMA at
    the level of $400,000 for fiscal year 1998. ITMA does not support the
    use of any of the funding requested for fiscal year 1998 for purposes
    of litigation. The Department of Justice has the responsibility for
    representing the Department of the Interior in any litigation. We see
    no justification for taking the scarce resources that are so
    desperately needed to implement improvements in the management of the
    trust funds and diverting them to defray any of the costs or expenses
    incurred by the Department of Justice in its defense of the past
    mismanagement of the trust funds.
        The objectives ahead in fiscal year 1998, as the Office of Special
    Trustee and Office of Trust Funds Management continue trust management
    reform efforts, are demanding: putting in place an accounts receivable
    system to track, collect and account for funds derived from Indian
    trust assets, and an automated accounting system for IIM accounts. ITMA
    has strongly advocated that adequate resources must be made available
    to the Special Trustee for the necessary systems and personnel--
    including building the infrastructure required for the daily
    collection, investment, accounting, and disbursement of trust funds--to
    accomplish the required management reforms. Until these and other
    reforms are completed, the government's ``breach of trust'' to tribal
    and individual Indian account holders continues and the federal
    government's liability increases. In fact, until these reforms are
    achieved, the Department remains in violation of the provisions of the
    American Indian Trust Fund Management Reform Act.
        In addition, the Special Trustee is holding consultation meetings
    with tribes throughout the country on his draft Strategic Plan.
    Elements one through eight of Phase I of the draft plan are supported
    by ITMA. We have concerns with element nine of the plan, which calls
    for the transfer of all trust functions and the related funding to the
    American Indian Trust Development Authority (AITDA). We believe that
    the AIDTA element of the Strategic Plan needs more thorough thought and
    note that it has been strongly opposed by most Tribal governments. We
    have not had sufficient time to consider elements ten through sixteen
    of the draft plan.
        Phase II of the draft Strategic Plan calls for the creation of a
    Development Bank. This portion of the plan is virtually identical to
    the proposal for a comprehensive settlement which has been proposed by
    the Special Trustee's Advisory Committee. ITMA does not support the
    establishment of a Development Bank as part of a settlement at this
    time for a variety of reasons, not the least of which is a concern
    about how such an institution would be capitalized and owned.
        ITMA has reviewed the settlement options which were proposed by the
    Department on December 11, 1996. ITMA has officially taken a position
    opposing those options. We understand that the Department is refining a
    proposal for a comprehensive settlement of trust fund mismanagement
    claims based on consultation with Tribes during January of this year.
    We will, of course thoroughly review any such proposal when it becomes
    available. However, if it contains the options identified in the
    December 11, 1996, proposal ITMA will oppose it because of its inherent
    unfairness on a host of issues ranging from the payment of interest to
    the netting of amounts deemed to be due to or due from Tribes as a
    result of the reconciliation project. As we have stated previously, the
    task before all of us right now is to repair the system for management
    of the trust funds. Very few, if any, of the account holders have
    sufficient and reliable information at this time on which to base a
    reasoned judgment about settlement.
        ITMA believes that the emphasis for the use of federal resources
    should to be on fixing existing management systems, so that account
    holders will have reliable information and the possibility of new
    claims against the federal government will be minimized. We are
    committed to doing everything we possibly can to assist the Congress,
    the account holders and the Special Trustee to complete this important
    work and bring the management systems into compliance with the Trust
    Funds Reform Act.
        The Intertribal Monitoring Association on Indian Trust Funds looks
    forward to continuing to work with the Office of Special Trustee, the
    account holders, and the Congress to support efforts to improve
    management of Indian trust funds. We believe that we all share a common
    vision--that tribal and individual Indian account holders should
    achieve the simple justice any other citizen would expect from the
    institutions, be they commercial or governmental, entrusted with the
    management of their money: a fair accounting and a fair return.
                                     ______

                    Prepared Statement of the Navajo Nation

                                  introduction
        Mr. Chairman and Members of the Subcommittee the Navajo Nation,
    America's largest Indian nation. On behalf of the Navajo people,
    greatly appreciates this opportunity to present our views and
    recommendations regarding the fiscal year 1998 appropriations for the
    Department of the Interior and Related Agencies (DOI). This testimony
    highlights our request for fiscal year 1998 appropriations.
                               the navajo nation
        The Navajo Nation is the largest Indian Nation in America with a
    population of 250,000 members. Spanning Arizona, New Mexico and Utah,
    the Navajo Nation encompasses 17.5 million acres--one-third of all
    Indian lands in the lower 48 states--and is larger than the States of
    Connecticut, Delaware, Maryland, Massachusetts and Rhode Island. Unlike
    those states, however, the Navajo Nation is home to the poorest of
    America's rural poor. While the average unemployment in America today
    is 5.8 percent, the unemployment rate on the Navajo Nation averages 38
    percent to 50 percent, depending on the season. Over 56 percent of the
    Navajo people live in poverty. Per capita income averages $4,106, less
    than one-third of that in the surrounding states. Only a few Navajos
    enjoy basic ``necessities'' of life that are taken for granted
    elsewhere in the United States--77 percent of Navajo homes lack
    plumbing, 72 percent lack adequate kitchen facilities, and 76 percent
    lack telephone service. Though the Navajo Nation is slightly larger
    than the state of West Virginia, only 2,000 miles of our roads are
    paved. This is barely 11 percent of West Virginia's 18,000 miles of
    paved roads. Until recently, we had just three banking facilities
    within our entire 27,500 square mile land area.
        Ironically, Mr. Chairman, the Navajo Nation is perceived as one of
    the more prosperous of Indian nations. Tragically, these types of
    living conditions exist on hundreds of other Indian nations throughout
    the United States. Nationwide, unemployment rates on Indian nations
    average 56 percent.
        Mr. Chairman, I focus my testimony on several of the Navajo
    Nation's specific requests for fiscal year 1998 funding for critically-
    needed projects. But in a larger sense, I urge the Committee to
    ``reinvent'' its own approach to Indian country funding. Rather than,
    chipping away year-after-year, generation-after-generation, in a
    piecemeal approach at existing conditions in Indian country, why not
    marshal all available federal resources in a coordinated, comprehensive
    and government-wide effort similar to the plans used to rebuild Germany
    and Japan after World War II. Such efforts can rectify the massive
    infrastructure deficiencies that prevent us from competing on a level
    playing field against even the most economically-distressed non-Indian
    communities.
        Such approach would redirect, government-wide federal resources and
    programs from those program which have already realized their purposes
    to Indian programs. Scarce federal resources can be targeted and
    invested in areas, like the Navajo Nation, where they are really
    needed. The goal must be to develop self-sustaining reservation
    economies consistent with Indian self-determination and self-
    governance.
        Enactment of welfare reform marks a significant reversal of federal
    entitlement policy that will greatly affect Indian nations. With
    respect to Indian reservations, the rationale that ending welfare
    assistance will force people to work simply ignores the lack of
    economic development, and subsequent employment opportunities. America
    must acknowledge the grim reality on Indian reservations--there are no
    jobs. The chronically high unemployment rate on Indian reservations is
    indicative of a seriously flawed economic development climate. The
    Navajo Nation has consistently pointed out major barriers to economic
    development, most significant are double taxation and the lack of
    infrastructure and economic development incentives that Congress must
    address before economic development opportunities can occur.
        Navajo culture encourages individual self-sufficiency and
    resourcefulness. However, there is a limit to the ability of Indian
    nations to unilaterally improve their unemployment situation. If our
    needs are not addressed, the unemployment situation will only worsen.
    Terminating welfare assistance, without creating the necessary job
    opportunities for welfare recipients, will severely reduce on-
    reservation spending, thereby negatively affecting reservation
    economies. The limited reservation businesses will not only be forced
    to lay off employees, but some may even be forced to close their doors.
    This will in turn increase our 38 percent unemployment rate and 56
    percent poverty rate.
        While current efforts to eliminate the accumulated federal deficit
    are commendable, the Navajo Nation cannot stress enough that the
    federal budget should not be balanced at the expense of the Navajo
    Nation and other Indian nations for several reasons. First, such
    efforts will result in termination of treaty obligations that the
    federal government has with the Navajo Nation. Secondly, Indian nations
    did not benefit from the enormous build up of the deficit beginning in
    the 1980's. Lastly, Indian nations, due to consistent inadequate
    funding, have and will remain severely impoverished and underdeveloped
    compared to the rest of the United States.
        Congress's own analysis, prepared by the Congressional Research
    Service, unequivocally shows that since 1985, per capita federal
    expenditures on Indians equaled approximately $2,400. This is $1,000
    per person less than the rest of the U.S. population. During the years
    of federal deficit spending many programs, principally benefiting non-
    Indians, received enormous funding increases while Indian program
    funding remained constant or actually decreased. Now that the bill has
    come due on the federal debt, Indian programs are slated to receive the
    burden of cuts. The unfairness and the inequity of this result surely
    was not the federal government's intent.
        The U.S. Government entered into a solemn treaty with the Navajo
    Nation in 1868. This treaty has the force of law and imposes explicit
    contractual obligations upon the United States government. These
    obligations for such matters as education, agricultural, natural
    resources preservation, and others require adequate federal funding to
    execute and fulfill. Budget cuts for Indian programs would, therefore,
    violate these treaty obligations, and amount to termination of such
    obligations by appropriations.
        In great part, due to the neglect of the United States to live up
    to its trust and treaty obligations and very little or no assistance
    from states in which Navajo People are also citizens, living conditions
    on the Navajo Nation are comparable to third world conditions. The
    Navajo Nation has an enormous deficit in all aspects of development
    when compared to other rural areas of America. These conditions are
    perpetuated by inadequate funding or lack of funding and the federal
    agencies lack of awareness or unwillingness to fulfill trust and treaty
    responsibilities to the Navajo Nation.
        The Navajo Nation has identified, through a preliminary needs
    assessments, a minimum of $2.97 billion needed in the six primary areas
    of rural development to achieve a level playing field with the rest of
    America. These needs prevent the Navajo People from achieving
    prosperous rural livelihoods and from realizing full potential for
    social and economic productivity and well-being. The ``pursuit of life,
    liberty and happiness,'' the cornerstones of American democracy, are
    therefore denied to the original inhabitants of this great land.
        We recognize that budget cuts are inevitable. But, we also
    recognize the compassion and fairness of this Committee, the Congress,
    the American leadership, and the American People. That compassion and
    fairness are demonstrated by the consistent large funding for foreign
    countries. The compassion and fairness of the American people can also
    be demonstrated by living up to promises made to the Navajo people in
    the Treaty of 1868.
              requests for doi fiscal year 1998 budget inclusions
        Today, the Navajo Nation merely highlight parts of our overall
    request for fiscal year 1998.
    Education
        The Navajo Nation strongly requests $14 million for Many Farms High
    School Construction. The Navajo Nation also requests $13.9 million for
    Navajo undergraduate scholarships. In 1996, the Navajo Nation Higher
    Education Grant Program received over 17,000 applications and only
    3,152 students were awarded scholarships. The Navajo Nation requests
    that a funding formula be based on native population that fairly
    distributes scholarship funds accordingly to Indian nations. For the
    Johnson O'Malley Program, the Navajo Nation requests that the
    Subcommittee request $18 million (the fiscal year 1997 enacted level)
    for services to support over 51,209 eligible Indian students between
    grades K-12 and employ over 224 professional/para-professional staff in
    major Navajo school districts. The Navajo Nation requests that the
    Subcommittee provide funding for the Indian Adult Education program at
    the fiscal year 1997 level of $2.5 million
        The Navajo Nation requests $467 million for funding of Bureau
    operated schools and dormitories on the Navajo Nation, school
    operations, particularly the $296.2 million for Indian Schools
    Equalization Program (ISEP). The Nation has 66 Bureau funded schools
    and expects an increase in enrollment for the school year 1996-97. Ten
    (10) Bureau-operated schools will be converting to Public Law 100-297
    Grant Schools by July 1, 1998 and will require an additional $1.589
    million above the President's $2.5 million increase for Administrative
    Cost Grants; the Navajo Nation also requests that full funding be
    provided for severance pay to federal employees upon conversion of
    Bureau-operated schools to Grant schools, estimated at $5.7 million.
    The Navajo Nation requests $500,000 for tribal departments of education
    to enhance their capacity to manage BIA education programs.
    Additionally, the Navajo Nation requests that the Subcommittee restore
    funding for the Institutionalized Handicapped which will allow Navajo
    schools to provide important specialized services.
        For the Navajo Community College (NCC), the Navajo Nation requests
    $7.5 million for the operating budget. Furthermore, $2 million is
    requested for desperately needed funds for renovation and construction.
    This funding will address health and safety requirements and compliance
    with the American with Disabilities Act at the NCC campuses. For its
    Shiprock campus, the Navajo Nation requests $1.2 million for the
    mandatory asbestos abatement and roof replacement.
    Natural resources development
        The Navajo Nation very strongly recommends $38.5 million for the
    Navajo Indian Irrigation Project (NIIP). Much of this will be used
    toward the construction, operation, and maintenance of NIIP. NIIP was
    authorized by Public Law 87-483 and further amended by Public Law 91-
    406, but is currently 30 years behind schedule. An additional $6.33
    million is requested to fund operation, maintenance, and replacement
    costs of NIIP's existing canal system.
        The Navajo Nation requests $5.375 million for water resource
    development and maintenance programs, including: $3.98 million for the
    development and rehabilitation of livestock water facilities; $500,000
    for operation and maintenance of irrigation projects; $570,000 for the
    Navajo Nation water monitoring and inventory program; $100,000 for
    technical studies for Navajo Nation San Juan Irrigation projects; and
    $225,000 for technical studies for Navajo Nation Clear Creek/Chevelon
    Water Supply Protection. Further, the Navajo Nation requests $1.535
    million for Navajo water rights protection and to conduct technical
    studies in the Little Colorado and San Juan River Basins. This funding
    would allow the Navajo Nation to adequately prepare for litigation over
    water rights.
        The Navajo Nation requests $1.9 million for non-renewable resources
    programs, including: $1 million per year for establishment of a Navajo
    Nation Surface Mining Program; $220,000 for Inspection of Navajo Oil
    and Gas Leases and Operating Agreements; and $700,000 for Minerals
    Audit Program. Additionally, the Navajo Nation requests $4.3 million
    for the abandoned mine lands reclamation program ($3.96 million) and
    UMTRA program ($344,178).
        The Navajo Nation requests $2.07 million for forest management and
    wildlife projects, including: $1.5 million for the management of
    600,000 acres of timberland and 4 million acres of woodlands.
    Management will consist of using the ``best management practices'' with
    modern techniques and equipment, while addressing the Navajo publics'
    concerns. The Navajo Nation also requests $298,710 for the Navajo
    Natural Heritage Program and $275,000 for wildlife management and
    enforcement.
        The Navajo Nation requests $21.95 million for Navajo cultural and
    historic preservation projects, including: $10 million for direct
    grants to Indian nations to support tribal preservation projects and
    programs; $10 million for grants to Indian tribes to repatriate human
    remains and sacred and ceremonial items; $1.487 million for the
    development of a comprehensive historic preservation and cultural
    resource management plan; and $463,000 for public protection,
    management, research, and interpretation of the Chacoan Outliers sites.
    To meet the responsibilities of the Navajo Nation Safety of Dams
    Program, the Navajo Nation requests $13.7 million, of which, $13
    million will be used for the rehabilitation of the Many Farms Dam;
    $200,000 for the development of an early warning system for dams
    located on the Navajo Nation; and $500,000 for maintenance and
    administration funds.
    Economic development
        The Navajo Nation requests $10,503,000 to develop Antelope Point
    Infrastructure near Page, Arizona. The appropriation would provide
    basic utilities and power distribution, telephone service, internal
    roads, public launch ramp, parking trails and walkways, signage, fire
    and police facilities, and landscaping for public areas to the Antelope
    Point Recreation Area.
        The Navajo Nation requests $3,925,000 to plan, develop and
    construct a regional water and sewer system to support future business
    and community development efforts near Monument Valley (Arizona and
    Utah). This includes basic utilities for the development of a gift
    shop, visitors center complex, hotel/motel designation, resort and rest
    area, and public signage.
    Indian Health Service facilities requests
        The Navajo Nation supports the President's fiscal year 1998 Budget
    Request for $25 million for Phase I construction of the Fort Defiance
    Comprehensive Health Care Facility. The proposed facility will have 58
    beds and will provide medical/surgery, pediatric, adolescent
    psychiatric, intensive/CCU, nursing and ambulatory services. The
    adolescent psychiatric unit will be the only one of its kind within the
    IHS health care system. This facility is one of two special initiatives
    on the IHS priority list.
        The Pinon Health Center is fourth on the national IHS priority
    listing for out-patient facilities construction. The Navajo Nation
    request $966,000 for the architectural and design phase of the proposed
    health center in Pinon, Arizona.
        In the Indian Health Service (IHS) budget, the Navajo Nation
    requests $1.249 million in supplemental appropriations for Red Mesa
    Health Center's architectural design. The design phase of the health
    center will commence upon approval of the planning documents by the IHS
    Headquarters. Approval is projected by the end of April 1997.
    Environment
        The Indian Lands Open Dump Cleanup Act of 1994 (Public Law 103-399)
    mandated the Indian Health Service (IHS) to address the closure of open
    dumps on Indian lands. Navajo Area-IHS has failed to meet the
    requirements of the Act due to lack of funding. The Navajo Nation is
    greatly concerned that both the IHS and the BIA have grossly
    underestimated the severity of the Navajo Nation's open dump problem.
    For example, BIA has claimed responsibility for only 25 active dump
    sites on the reservation and has committed to proceeding with closure
    activities only on these sites. Likewise, Navajo Area-IHS submitted a
    list of 65 dump sites to IHS Headquarters for inclusion into a final
    report for Congress, as required under Public Law 103-399. Yet, in June
    1996, the Navajo Nation completed its own open dump site inventory--
    sites that are used by four or more families--and have estimated that
    there at least 465 sites that need to be closed by October 1997. The
    Navajo Nation estimates that $5 million will be needed in order to
    complete Phase I closure (which consists of consolidating small dump
    areas where there is no mechanical manipulation of the site into larger
    community dump sites and closing and covering the larger community
    dumpsites). The Navajo Nation requests that the Subcommittee provide
    this amount and direct both IHS and BIA to reevaluate their inventory
    processes to include the sites identified by the Navajo Nation and
    request funding accordingly.
    Social services
        The Navajo Nation requests $2.5 million to continue providing
    prevention, intervention and treatment services to Navajo children, who
    are victims of child sexual abuse and child abuse and their families.
    In recent years, child sexual abuse and molestation crimes has become
    one of the most reported criminal activity on the Navajo Nation. Also,
    the incidents of child abuse and neglect is on the rise, as well. This
    becomes an issue, especially when there is no one to advocate on their
    behalf and our Navajo children cannot protect themselves. On the Navajo
    Nation, our Navajo children are our most important vital resource,
    therefore, their health, safety and welfare must be made a priority, at
    all cost. At this time, the Navajo Nation Child Sexual Abuse Prevention
    Project is assigned the responsibility of providing services for
    children who have been sexually abused and their families. The
    therapeutic and treatment services is provided using the Western
    Medicine approach or if the family wishes, by use of the traditional
    medicine and ceremonies. There are currently five direct service
    offices located on the Navajo Nation, one at each of the agency office,
    and one office at the Central Office, that oversees the administration
    of the program and the funds.
        The Navajo Nation has to address its domestic violence issues and
    problems to curb the incidents of family violence. This is done by
    subcontracting with five non-profit domestic violence organizations or
    battered families shelter homes located on the Navajo Nation, who
    provide the therapeutic and treatment services needed by the victims of
    domestic violence and their families. Currently, the facilities are
    under funded and have limited resources to address their overburdened
    caseloads and for the daily operation of shelters and safehomes.
    Therefore, the Navajo Nation requests full appropriation, as originally
    authorized by Congress, in Public Law 101-630, Indian Child Protection
    and Family Violence Prevention Act, an Indian-Specific Legislation
    designed to combat child sexual abuse, child abuse and neglect and
    domestic violence in Indian country.
        The Navajo Nation requests restoration of a 17 percent funding cut
    to the fiscal year 1995 level for welfare assistance programs which
    include child welfare services and adult care. Without restoration of
    the 17 percent cut some programs will receive a 38 percent funding
    reduction and over 2,300 eligible Indian beneficiaries per month will
    be denied services.
    Navajo-Hopi
        The Navajo Nation seeks $31 million for special rehabilitation
    projects in the Former Joint Use Area and Western Navajo Agency. Due to
    the federal relocation program, litigation over ownership, and the
    related construction freezes, little or no development has taken place
    in the last 27 years. During the freeze period, Navajo residents were
    denied assistance from federal, state and Navajo Nation programs that
    target low income citizens. Hundreds of millions of dollars are needed
    to elevate the living conditions of the people in these areas.
        Of the amount requested, $15 million would be for planning,
    housing, community services and infrastructure development in the Hopi
    Partitioned Land. Over 250 Navajo families remain on the Hopi
    Partitioned Land. Due to the construction freeze, these families now
    live in deplorable conditions.
        This funding request also includes $15 million for housing,
    community services, and range restoration in the Navajo Partitioned
    Land. Influxes of relocatees and refugees created by the federal
    relocation program have led to overuse of already limited land and
    infrastructure, high rate of unemployment, and overcrowding and
    dilapidated housing. Finally, $1 million dollars is requested for
    planning purposes in anticipation of the lifting of a 27-year federal
    construction freeze in the Bennett Freeze Area.
        The Navajo Nation also requests the reauthorization of
    appropriations for the Navajo Rehabilitation Trust Fund for fiscal year
    1998 through fiscal year 2001 in an amount not to exceed $10,000,000 in
    each fiscal year. This fund has provided critically needed resources to
    address the tremendous development and services deficiencies
    experienced in the ``land dispute'' area.
    Public safety
        In fiscal year 1998 the Navajo Nation requests $29 million for law
    enforcement activities including, funding for corrections facilities
    and criminal investigators. A 1992 Consent Decree limits available
    detention space for criminals and requires the Navajo Nation to upgrade
    and replace jail facilities. All five Navajo adult detention facilities
    are listed on the BIA's Planning of New Institutions (PONI) priority
    list. No funding has been provided. The Navajo Nation requests $2
    million to renovate detention facilities and $200,000 for needs
    assessments of adult detention facilities.
        The Navajo Nation also requests $1.4 million for the completion of
    the design and planning phase of three juvenile detention facilities:
    Crownpoint--$400,000; Kayenta--$300,00; and Shiprock--$700,000. The
    Navajo Nation is experiencing an increase in crime rates, especially
    violent juvenile crime. The Navajo Nation does not have sufficient
    juvenile detention facilities and lacks rehabilitative services.
                                   conclusion
        The Navajo Nation thanks Chairman Gorton and the Members of the
    Subcommittee for their leadership and support of these programs.
                                     ______

    Prepared Statement of Pearl Capoeman-Baller, President, Quinault Indian
                                     Nation

      summary--quinault nation appropriations requests: tribal priorities
    1. Quinault Cultural Preservation Center (QCPC) +$300,000
        Start-up funds for construction and development of a Cultural
    Preservation Center and Museum is needed to preserve the cultural
    heritage of the Quinault people--a nation which consists of 7 tribes.
    Through Self-Governance funding, a small cultural program was
    developed, however, a facility is needed in order to properly restore,
    preserve and display artifacts, family heirlooms and other
    archeological findings. Request start-up construction funds of
    $300,000.
    2. Seniors/Elders Assisted Living Program--I.H.S.--Community Health
            Program +$250,000
        As our elderly population increases, there has been a associated
    increase in the need for assisted living care. Our Public Health/
    Community Health Program is unable to provide continuous care due to
    lack of staffing. We are in great need of 24-hour care for many of our
    seniors in both villages on the Quinault Reservation. Request earmark
    of $250,000 initial funding and $150,000 on a recurring basis to
    establish an elders assisted living program in the villages of Queets
    and Taholah.
      quinault indian nation requests and recommendations: national level
        Office of Special Trustee--American Trust Fund Management Reform
    Act of 1994.--Request language directing the Office of Special Trustee
    to complete analysis, true consultation and report back to Congress
    before implementing the Draft Strategic Plan of the Special Trustee for
    American Indians.
        BIA/IHS contract support funds.--Provide sufficient contract
    support funding for increased tribal acquisition of programs, services
    and activities in all DOI/BIA and I.H.S. programs. Instruct the BIA to
    establish a contract support funding process similar to the process
    established by the Indian Health Service.
        Tribal priority allocations.--Restore the BIA budget--Tribal
    Priority Allocations to the fiscal year 1995 levels, to ensure tribal
    programs are not diminished. The underlying principle for the
    establishment of the Tribal Budget System was to provide for each
    Tribe's base budget to receive annual adjustments for inflation. This
    has not happened since 1995. Request increase of $73 million to TPA (to
    $830 million) to bring funding levels to same level as fiscal year 1995
    for Tribal Priority Allocations.
        Welfare reform implementation programs.--Require establishment of
    necessary infrastructure on Indian Reservations of job training, adult
    and basic education and early childhood development programs.
        Elevation of Indian Health Service.--The Indian Health Service is
    the largest direct health care provider within the Department of Health
    and Human Services and should answer directly to the Secretary to
    insure that issues which impact the agency are addressed. There are
    many legal and cultural issues which are unique to Indian Health
    programs and tribes rely on the Director of the I.H.S. to address these
    concerns. During the last Congress, the Honorable Sen. John McCain
    introduced legislation (S. 311) which would elevate the Director of the
    I.H.S. to the Assistant Secretary level within the DHHS. Since the
    elimination of the Assistant Secretary of Health, the need for this
    legislation has increased.
        IHS mandatories.--During fiscal year 1998, it is imperative that
    funding be provided for all mandatory costs increases incurred by the
    Indian Health Service, including medical inflation, mandatory payroll
    increases and population growth (including new tribes). In the
    Northwest where Indian Health programs must purchase all inpatient and
    specialty care from private providers, it is particularly important
    that inflationary cost increases for the Contract Health Services
    program be funded. In past years, deferred medical and dental services
    in the Northwest have been as much as $4 million annually. This is a
    great disservice to Indian people and should not be allowed. Request
    full funding of mandatories for fiscal year 1998.
        Joint BIA/I.H.S. issues.--Contract support funds are required for
    tribes to successfully manage their own programs. The IHS has an
    estimated shortfall of $30 million and the BIA has an estimated
    contract support shortfall of $5 million in fiscal year 1998 and $16
    million in fiscal year 1997. Even with the proposed $10 million
    increase in fiscal year 1998, these shortfalls deprive Tribes of needed
    administrative services. These shortfalls prevent the realization of
    the Congressional goal of Self-determination for tribes awaiting these
    funds. Recommend full funding of contract support costs.
        Northwest Portland area Indian Health Board.--Indian Health
    programs and services are provided to over 80,000 Indian people in the
    Northwest (Oregon, Washington and Idaho). The partnership forged by
    Congress with tribal governments and the Indian Health Service over the
    last 30 to 40 years has resulted in significant improvement in health
    care delivery to Indian people. Even though health status measurements
    of American Indians are still lagging, progress has been made. Death
    rates of Indian people from infectious diseases, gastrointestinal
    diseases and tuberculosis have dropped considerably; maternal death
    rates have declined by 65 percent since 1973 and immunization rates for
    Indian children exceed 90 percent, compared with the national average
    of 67 percent. As Congress is required to control spending, it should
    not cut out model programs that have demonstrated success. To dismantle
    this successful public health care system could create disastrous
    consequences for the health of all American people and could relegate
    health care services to Indian people to that of third world countries.
                      quinault indian nation funding needs
    BIA Self-governance: Tribal Priority Allocations public safety and
            justice--tribal courts +$100,000
        Funding to enhance the judicial court system to provide adequate
    pretrial and post-trial services to clients of the Quinault Nation
    Court. The historically underfunded Quinault Tribal Court currently
    suffers from lack of funding in several areas including: research and
    law clerk functions, court appointments, guardian ad litems,
    preparation of written decisions, process services, and clerical
    services. Despite these many deficiencies, the Court has managed to
    operate relatively well due primarily to multi-talented, cross-cultural
    and hard-working staff who are dedicated to the field and to justice.
    With proper funding, the possibilities for an exemplary court system
    are limitless.
    Tribal priority allocations: Resource management--water resources
            +$50,000
        Funding required to continue Coordinated Tribal Water Quality
    Program (CTWQP) to collect new water quality and stream flow data and
    to correlate all available scientific information. This program
    currently is funded by EPA, which will end in fiscal year 1998. Request
    increase to QIN TPA allocation to continue this critical data
    collection, interpretation and development of water quality standards.
    Construction: Natural resources facility +$500,000
        Construction funds are needed to complete the construction of Phase
    II Administration Complex. This building will supply the facility and
    infrastructure necessary for the Nation to move into the 21st Century
    with its Natural Resource Management responsibilities. The Natural
    Resources Department consists of 47 employees located in four buildings
    scattered across the reservation. Request a Congressional earmark of
    $500,000 towards construction of facility.
    Tribal priority allocations: Wildlife and parks--``Shale Creek Pond''
            +$75,000
        This facility was built in 1988 by Washington State Department of
    Fisheries as part of a cooperative wild coho supplementation program,
    and has become an integral part of the Quinault Indian Nation's efforts
    to improve productivity of the Queets River wild stock of coho salmon.
    The level of salmon harvest opportunity in Washington ocean fisheries
    is often linked to the status of this stock, a key indicator of wild
    coho stocks coast-wide. Increasing production of this wild stock
    provides for increased harvest opportunity to Indian and non-Indian
    ocean fisheries alike. Request $75,000 to fund operating costs of this
    facility which will benefit commercial and recreational fisheries in
    the Pacific Ocean and Queets River.
    Construction: Fisheries building +$75,000
        The fisheries building located in Queets is used to house
    biologists, technicians and equipment to conduct wild salmon studies.
    The building is in an extreme state of disrepair. Thirty years ago it
    was a fire station and currently the walls, roof and foundation are all
    crumbling. A garage with storage space and interior offices are
    required. Estimated cost is $75,000.
    National Park Service: Historic preservation fund Quinault Cultural
            Preservation Center (QCPC) +$300,000
        Start-up funds for construction and development of a Cultural
    Preservation Center and Museum are needed to preserve the cultural
    heritage of the Quinault people--a nation which consists of 7 tribes.
    Through Self-Governance funding, a small cultural program was
    developed. However, a facility is needed in order to properly restore,
    preserve and display artifacts, family heirlooms and other
    archeological findings. Request earmark in Historic Preservation Fund.
    Indian Health Service: Elders assisted living program +$250,000
        The Quinault Nation Seniors program is in dire need of an ongoing
    assisted living program. More and more elders are in need of around-
    the-clock care. Families can provide some of the care, and the Nation's
    Community Health Program is able to provide only minimal assistance,
    however, more and more of our elders are requiring assisted care. We
    are unable to provide this care without hiring additional nurses and
    aides to provide this much-needed care. Request earmark of $250,000
    initial funding and $150,000 on a recurring basis to establish an
    elders assisted living program in both villages on the reservation.
                                     ______

     Prepared Statement of Benito Valencia, Chairman, Pascua Yaqui Indian
                                Tribe of Arizona

                                  introduction
        The Pascua Yaqui Tribe of Arizona is pleased to offer written
    testimony regarding the President's Budget Request for fiscal year 1998
    Indian Programs and Services. We would like to acknowledge that the
    Tribe concurs with the comments submitted to the Senate Committee on
    Indian Affairs, by President Ron Allen of the National Congress of
    American Indians on February 26, 1997, concerning the proposed fiscal
    year 1998 budget. The fiscal year 1998 funding requests to this
    Subcommittee of the Pascua Yaqui Tribe include: Sufficient funding
    through the Indian Health Service to provide health services to all our
    eligible tribal members under our HMO arrangement estimated by IHS to
    be $8 million over the budget request in fiscal year 1998 (the $10.7
    million originally stated in our House testimony has been revised by
    the IHS to more accurately reflect the costs); and $200,000 through the
    Bureau of Indian Affairs to conduct seven critical studies that were
    authorized by the Congress in Public Law 103-357 in 1994.
                             background information
        As you may be aware, the Pascua Yaqui Tribe, through Congressional
    enactment of Public Law 103-357, was authorized to open tribal
    enrollment until October of 1997. The Tribe's population is expected to
    grow to approximately 14,000 to 16,000 tribally enrolled members. This
    fact will makes us one of the largest tribes in the country. Having
    said this, however, we remain one of the most severely underfunded
    tribes. Let us illustrate this point with the following information
    concerning the Pascua Yaqui Tribe's Health Care funding crisis.
    A. Tribal health funding
        We are asking for your support and assistance in resolving a crisis
    situation regarding our future health care. As of today, we do not know
    what type of health care services we will be receiving or who will be
    providing the health services after October 1 of this year.
        Since the time we received federal recognition, the Pascua Yaqui
    Tribe has received health care services through a pre-paid contract
    with a private HMO provider. When Indian Health Service approached the
    Tribe about participating in the HMO program in the early 1980's, our
    tribal leaders expressed concern about the uncertainty of funding for
    future tribal members and the potential of changing providers every
    three years. They reluctantly agreed to the arrangement. In retrospect,
    the concerns our tribal leaders expressed then have become a reality.
    On December 13, 1996, the Indian Health Service advised us that they
    were no longer going to be able to continue funding the HMO program
    after the current contract expires on May 31 of this year. They
    identified a shortfall of $844,588 needed to continue the HMO program
    through September 31, 1997. Since the notification, the IHS has
    provided emergency one-time funding of $585,000 to continue the program
    until September 31. However, based on their financial projections, the
    Indian Health Service estimates they need an additional $3.1 million
    dollars in fiscal year 1998 to fund the program just for the 4,500
    tribal members currently enrolled in the HMO and capping enrollment in
    the HMO at 4,500. But, we currently have over 3,500 applications that
    are likely to be approved before the October open enrollment deadline.
    These new members will need health care services. Therefore, an
    additional $4.9 million will be needed to fund the HMO program for the
    new tribal members. The Indian Health Service has provided us with
    financial information that outlines how much funding it will take to
    provide direct services to our current population and the new tribal
    members. Using their resource requirement formula, they estimate the
    cost for providing direct health care services at $16 million dollars,
    compared to the $4.1 million currently allocated for the HMO or the
    total of $12.1 million needed to fund the HMO for all our tribal
    members. As you can see, the HMO arrangement is more cost effective
    than a direct IHS program and we want the HMO program to continue.
        Health care is a priority for us. Utilizing our own tribal funds,
    we are nearing completion on a $2.7 million health complex with 25,000
    square feet. The complex will include a small satellite clinic, a ten-
    chair dialysis center and a public health wellness center. Also, an
    additional $1.7 million in tribal dollars are approved annually to our
    tribal community health programs to supplement the $1.3 million dollar
    funding we receive from the Indian Health Service.
        The Indian Health Service has not been supportive or proactive in
    working with us to identify a long-term solution that will provide
    health services through the HMO program to all our eligible tribal
    members. We request the Committee direct the IHS to work with the
    Pascua Yaqui Tribe in developing a plan to submit to Congress no later
    than January 1, 1998. In addition, direct the IHS to continue to fund
    the HMO in fiscal year 1998 without an enrollment cap or reduction in
    the benefits package in the HMO program.
    B. Department of Interior
                Bureau of Indian Affairs
        A second important issue to the Tribe is the appropriation of funds
    for the purpose of conducting 7 critical studies that were authorized
    by the Congress in Public Law 103-357 in 1994. Because of the Tribe's
    open enrollment, the studies were needed to adequately prepare for the
    expanded population. Let us specifically cite what those studies were.
    Among the authorized studies that we are requesting appropriations for
    are:

        ``(a) In General.--The Secretary of the Interior shall conduct one
    or more studies to determine--
        (1) whether the lands held in trust on the date of enactment of
    this section by the United States for the Pascua Yaqui Tribe are
    adequate for the needs of the tribe for the foreseeable future;
        (2) if such lands are not adequate--
        (A) whether suitable additional lands are available for acquisition
    by exchange or purchase; and
        (B) the cost and location of the suitable additional lands;
        (3) whether the Pascua Yaqui Tribe has sufficient water rights and
    allocations to meet the needs of the tribe for the foreseeable future;
        (4) if such water rights and allocations are not adequate
        (A) whether additional water can be acquired; and
        (B) the potential sources and associated costs of such additional
    water;
        (5) whether the Bureau of Indian Affairs and the Indian Health
    Service have limited funding to the Pascua Yaqui Tribe based on the
    determination of the tribal enrollment in 1978, rather than the current
    enrollment;
        (6) if funding has been based on 1978 enrollment, how the funding
    levels can be adjusted to ensure that the Pascua Yaqui Tribe receives a
    fair and equitable portion of Bureau of Indian Affairs and Indian
    Health Service funding;
        (7) the genealogy of the Pascua Yaqui Tribe; and
        (8) the economic development opportunities available to the tribe
    as a result of the North American Free Trade Agreement.''

    25 U.S.C. S 1300f-3.
        To date, only the genealogy study was funded by the Bureau of
    Indian Affairs in fiscal year 1996 for $35,000. We are requesting
    $200,000 for fiscal year 1998 to commence studies on expansion of
    tribal land base, water allotment planning, additional water
    acquisition, and NAFTA economic development opportunities. The Tribe is
    prepared to provide matching funds of $50,000. Thank you.
                                     ______

          Prepared Statement of the Bering Sea Fishermen's Association

                                    abstract
        The Bering Sea Fishermen's Association (BSFA) requests the Senate
    Appropriations subcommittee on Interior and Related Agencies to
    authorize an appropriation of $1,000,000 to BSFA to conduct salmon
    research and restoration projects in western Alaska and Interior river
    systems. Funds would continue to be authorized under the BIA Wildlife &
    Parks, Tribal Management and Development program. As it has done with
    the fiscal year 1994--fiscal year 1997 appropriations, BSFA would
    design and implement cooperative projects with Alaska Native villages
    in Kotzebue Sound, Norton Sound and the Yukon and Kuskokwim rivers.
    This proposal aims to maintain the Western Alaska Salmon Investigations
    Program on the original course set by Congress in fiscal year 1994: the
    monitoring and restoration of depressed salmon stocks under the
    management of one organization that serves and represents all the
    affected fishermen.
    BSFA: 17 years of service to western Alaska Native villages
        Formed in 1980, the Bering Sea Fishermen's Association (BSFA) is
    non-profit extension service organization serving the needs of western
    Alaska commercial and subsistence salmon and herring fishermen. BSFA is
    governed by a 12-member Board of Alaska Native fishermen. BSFA provides
    services to Alaska Native villagers in four broad regions: Bristol Bay
    drainage, Yukon-Kuskokwim Rivers, Norton Sound and Kotzebue Sound.
    Services provided include: Assistance in dealing with state and federal
    regulations for seafood harvesting, processing and marketing; design
    and implementation of fisheries processing facilities; and scientific
    research to aid in management and development of local fisheries.
        BSFA, through a combination of state, federal and private grants,
    has played the major role in ensuring Alaska Native participation in
    the development and management of dynamic fisheries. Some of these
    accomplishments include ensuring local control and sustainability in
    emerging fisheries, developing user participation in research and
    cooperative management regimes, and design and implementation of the
    Community Development Quota (CDQ) program for sablefish, halibut and
    pollock.
    BSFA's western Alaska (Arctic-Yukon-Kuskokwim) salmon restoration &
            research program
        In response to drastic declines in chum salmon, in fiscal year 1994
    the Congress authorized a direct appropriation of $800 000 to BSFA to
    conduct salmon monitoring research restoration and enhancement projects
    in western Alaska. From early 1994 to late 1995, BSFA conducted the
    following projects:
        Kotzebue Sound.--Sikasuilaq hatchery: annual operation costs/Kobuk
    River test fishery/regional subsistence harvest surveys/formation of
    regional aquaculture association.
        Norton Sound.--Sockeye salmon: Habitat analysis, Chum salmon:
    habitat analysis, incubation units/Niukluk and Snake Rivers spawning
    escapement towers/regional subsistence harvest surveys.
        Yukon River.--Chum salmon: Productivity analysis, egg incubation &
    rearing/public forums: Inseason management/Pilot Station main river
    sonar operations/Kaltag Creek spawning escapement tower & chum salmon
    incubation/Nulato River spawning escapement tower/Tanana Village salmon
    abundance test fishwheels/Anvik River terminal harvest fishery.
        Kuskokwim River.--Public forums: Inseason management/Eek Island
    salmon abundance gillnet test fishery/Aniak River coho salmon
    escapement sonar/Nunivak Island salmon abundance study Bristol Bay Wood
    River coho salmon escapement tower
        In fiscal year 1995 BSFA was awarded $336,809 in a BIA competitive
    grant process and used the funds for the following projects:
        Kuskokwim River.--Chum salmon migration timing and distribution
    study.
        Yukon River.--Mountain Village fall chum test fishery/Andreafski
    River coho salmon escapement weir/Galena village fall chum test
    fishwheel/Tanana village fall chum test fishwheels/Tanana River fall
    chum population study.
        For fiscal year 1996 BSFA was appropriated $804,500 and used the
    funds for the following projects:
        Kotzebue Sound.--Regional salmon spawning surveys/daily catch
    sampling public forums: Inseason management and project plarning.
        Norton Sound.--Eldorado River, Snake River and North River spawning
    escapement towers/Pilgrim River spawning reconnaissance/regional
    subsistence harvest surveys.
        Yukon River.--Public forums: Inseason management and project
    planning/Andreafsky River weir/Pilot Station sonar/Kaltag Cr., Nulato
    River, Clear River spawning escapement towers/Mountain Village, Tanana
    Village and Ft. Yukon test fisheries/Toklat & Nenana Rivers spawning
    surveys/Tanana chum population studies.
        Kuskowkim River.--Public forums: Inseason management and project
    planning/Kanektok, Takotna and Kwethluk escapement towers/George River
    weir/Aniak River sonar.
        For fiscal year 1997 BSFA was appropriated $805 000 by Congress and
    has just begun work on implementing many of the same projects above as
    well as designing new projects.
        For all of these projects these last 3 years, BSFA has worked
    directly with and contracted with Alaska Native individuals, villages
    and regional Native non-profit associations. Through using the BIA
    appropriation as matching funds, BSFA has leveraged several thousands
    dollars of project support from the Alaska Department of Fish and Game
    and the U.S. Fish & Wildlife Service. Finally these BSFA-administered
    projects were implemented with a low indirect cost rate of only 18
    percent.
    Fiscal year 1998 proposed projects
        The BSFA Board and staff, in consultation with Alaska Native
    organizations and tribes, would continue to exercise the leadership
    role in coordinating salmon research and restoration projects. BSFA is
    the only group that represents and works with all fishermen (commercial
    and subsistence) and villagers throughout the entire Arctic-Yukon-
    Kuskokwim region. BSFA Board and staff are intimately familiar with
    salmon research needs in the A-Y-K region.
        BSFA will continue to contract with local and regional Alaska
    Native organizations and other appropriate entities as well as with
    individual fishermen. BSFA staff will work with these organizations and
    individuals as well as with state and federal agency staff to design,
    coordinate and implement projects. BSFA staff would include a Fisheries
    Biologist and Program Director as well as part-time administrative
    personnel to work directly with subcontractors and cooperating
    agencies. Having BSFA as the single responsible program management
    entity will assure both the development of tribal expertise and the
    fulfillment of Congressional intent to rebuild salmon returns in an
    efficient manner.
        We request a continued direct appropriation of $1,000,000 to Bering
    Sea Fishermen's Association for fiscal year 1998 to continue to conduct
    salmon research & restoration projects in the affected Arctic-Yukon-
    Kuskokwim region of western Alaska. Funding for BSFA would continue to
    come from the BIA's Wildife & Parks/Tribal Management & Development
    program.
        Projects meeting the following criteria would be implemented:
    Priority funds to continue scientifically-useful projects developed in
    fiscal year 1994 thru fiscal year 1997; must fill a gap in the database
    on western Alaska salmon; if applicable, work in cooperation with state
    and federal land agencies; and majority of contractors hired must work
    in the field and be local hire.
        We appreciate the trust Congress has shown in BSFA by having us
    direct this program. The last few years of research has dramatically
    improved the ability of fisheries managers to meet the commercial and
    subsistence needs of western Alaska Native communities. Thank you for
    this opportunity to submit written testimony.
                                     ______

     Prepared Statement of Robert W. Sutton, Executive Director, American
                             Indian Graduate Center

        Mr. Chairman and Members of the Subcommittee: The American Indian
    Graduate Center (AIGC) is grateful for the opportunity to present
    testimony in support of the BIA's Special Higher Education Program
    (SHOP). AIGC has administered the SHEP since 1972, the only national
    scholarship program in the country focusing on American Indian and
    Alaskan Native graduate students. We respectfully request $3 million
    for this Bureau of Indian Affairs Program in the 1998 fiscal year
    Budget.
                                   background
        AIGC is a national, Indian, non-profit organization established in
    1969 to assist American Indian and Alaskan Native students needing
    financial aid for graduate school. From 1972 to the present, AIGC has
    administered the BLA Graduate program in all professional degree areas.
    Until this year the Graduate Center was assisting approximately 90
    percent of all Indian graduate students nationwide. Nearly 90 percent
    of all SHEP funds goes directly to students in fellowship grants, and
    10 percent or less is for administrative costs.
        The Graduate Center also raises funds from private sources. However
    90 percent of our fellowship awards come from the SHEP contract funds.
    There have been over 4,000 students served by this program in 25 years.
    Last year, the 1995-96 Academic Year, we awarded over 500 students over
    $2 million. The fiscal year 1996 appropriation reduced our funding by
    50 percent, from $2.6 million to $13 million. The fiscal year 1997
    funding remained at $0.3 million. Due to the devastating cut in
    funding, we were only able to help our 250 continuing students. There
    were over 800 requests from new students that we could not help. Many
    of these students were unable to continue their education and will
    probably never be able to continue. The continually increasing number
    of students, over 1,300 requests for next year, will substantially
    reduce the amount each student receives to a point where the SHEP award
    will be insignificant. This coupled with the continually increasing
    cost of education will have a significant impact on the student's
    ability to remain in school. As the Indian undergraduate student
    population increases this program will not be able to assist them in
    advancing their skills without increased funding. Former recipients of
    this program, such as Lorraine Edmo, Executive Director of NIEA and
    Assistant Secretary Ada Deer of the BIA, are successful leaders in the
    Indian community.
        The report in ``Indian Nations at Risk: An Educational Strategy for
    Action,'' issued by the Department of Education in October of 1991
    stated: ``An increase in funding to train Native educators for
    elementary, secondary, and university teaching and other professions in
    science, mathematics, law, engineering, and medicine, business, the
    social sciences and related fields as a national priority,'' was needed
    for the tribal communities throughout the country. These will be
    trained, Indian professionals who are not only critical to the well-
    being of American Indian communities, but to the country as a whole. We
    all know that Education is the key ingredient to self-sufficiency.
                     current funding and student statistics
        For the current 1997 fiscal year the contract amount is $1,333,000.
    The following is a final breakdown of the number of students and their
    fields of study from the 1995-96 academic year and preliminary figures
    for the 1996-97 academic year.

                      NUMBER OF STUDENTS AND FIELD OF STUDY
    ------------------------------------------------------------------------
                                                      Academic year--
                 Field of study              -------------------------------
                                                  1995-96         1996-97
    ------------------------------------------------------------------------
    Business................................              49              20
    Education...............................              59              23
    Engineering.............................               8               2
    Health..................................             160              89
    Law.....................................             164              99
    Natural resources.......................               3               1
    Other...................................              95              48
    Number of males.........................             196             110
    Number of females.......................             342             172
    Total tribes represented................             123              86
    Total colleges represented..............             197             130
    Masters candidates......................             230              87
    Doctorate candidates....................             295             192
    Dual degree programs....................              13               3
                                             -------------------------------
          Total.............................             538             282
    ------------------------------------------------------------------------

        Applicants to AIGC must apply for campus-based aid through the
    federal financial aid process. Our program limits assistance to only a
    portion of their unmet need. The unmet need last academic year was $7.3
    million compared to this year of $4 million. The average award this
    year is only $3,300, which represents a small percentage of their
    costs. Over the last three years there has been a reduction in our
    maximum award from $8,000 to $4,000 because of the increasing number of
    eligible applicants and escalating college costs.
        We have been able to operate the SHEP at a cost efficient level for
    the past ten years. The low overhead costs are due to a well-trained
    staff and the use of modern computer technology. This has enhanced our
    ability to service our students. We have perfected our methods of
    delivering services, office procedures and internal systems. We are
    confident we can continue to successfully administer the Special Higher
    Education Program, at a cost savings to the Government.
                                summary request
        The American Indian Graduate Center requests Congress continue
    funding the Special Higher Education Program at the proposed level of
    support. Additionally, allowing for increases in student applicants and
    costs of education, we desperately need the program increased to at
    least $3 million in the 1998 fiscal year BLA budget. We greatly
    appreciate your continued support of Indian graduate education. Your
    efforts will ensure a pool of skilled professionals to improve the
    economic conditions on Indian reservations and support the greater
    social environment as productive members of society.

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                                  ----------
                                                                       Page

    Alexander, Jane, Chairman, National Endowment for the Arts.......   321
        Biographical sketch..........................................   337
        Prepared statement...........................................   334
    Allen, Wm. Ron, commissioner, U.S. Section of the Pacific Salmon
      Commission; and president, National Congress of American
      Indians, prepared statements...................................
      923, 929, 931..................................................
    American Association of Retired Persons, prepared statement......   717
    American Gas Association, prepared statement.....................   727
    American Public Power Association, prepared statement............   703
    Apesanahkwat, chairman, Menominee Indian Tribe of Wisconsin,
      prepared statement.............................................   921
    Arita, Steven J., environmental coordinator, Western States
      Petroleum Association, prepared statement......................   830
    Assiniboine and Sioux Tribes of the Fort Peck Indian Reservation,
      prepared statement.............................................   881
    Atwine, Ruby, chair, Tribal Business Committee of the Ute Indian
      Tribe of the Uintah and Ouray Reservation, prepared statement..   891
    Aunan, Lauri G., executive director, Friends of the Columbia
      Gorge, prepared statement......................................   797

    Babbitt, Hon. Bruce, Secretary of the Interior, Office of the
      Secretary, Department of the Interior..........................   409
        Prepared statement...........................................   417
    Bahr, Dr. Thomas G., on behalf of the National Institutes for
      Water Resources, prepared statement............................   840
    Barnett, Jack A., executive director, Colorado River Basin
      Salinity Control Forum, prepared statement.....................   847
    Beard, Daniel, P., senior vice president for policy, the National
      Audubon Society, prepared statement............................   805
    Beetham, Mary Beth, legislative associate, Defenders of Wildlife,
      prepared statement.............................................   832
    Begay, Jones, president, Association of Navajo Community
      Controlled School Boards and Navajo Nation Council Delegate,
      prepared statement.............................................   919
    Bennett, Hon. Robert F., U.S. Senator from Utah..................
      139, 297.......................................................
    Bering Sea Fishermen's Association, prepared statement...........   964
    Billie, James E., chairman, Seminole Tribe of Florida, prepared
      statement......................................................   906
    Bingaman, Hon. Jeff, U.S. Senator from New Mexico, on behalf of
      the Interstate Oil & Gas Compact Commission, prepared statement   693
    Blackhawk, John, chairman, Winnebago Tribe of Nebraska, prepared
      statement......................................................   858
    Blue Eyes, Faye, executive director, Shiprock Alternative
      Schools, Inc., Navajo Nation, Shiprock, NM, prepared statement.   938
    Bond, Hon. Christopher, U.S. Senator from Missouri...............   412
    Booth, Hon. Jack, mayor, Metlakatla Indian Community, prepared
      state- ment....................................................   939
    Boxer, Hon. Barbara, U.S. Senator from California................   323
    Bristol Bay Area Health Corp., prepared statement................   868
    Brown, Robert D., president, National Association of University
      Fisheries and Wildlife Programs, letter from...................   820
    Bumpers, Hon. Dale, U.S. Senator from Arkansas...................   329
    Burns, Hon. Conrad, U.S. Senator from Montana....................   180
        Prepared statement...........................................   325
        Questions submitted by.......................................
          290, 635...................................................
    Burr, Joyce, superintendent, Circle of Nations School, prepared
      statement......................................................   952
    Business Council for Sustainable Energy, prepared statement......
                                                             705, 714
    Byrd, Hon. Robert, U.S. Senator from West Virginia...............   411
        Questions submitted by.......................................
          92, 302, 355, 396, 597.....................................

    Cabral, Robert J., supervisor, San Joaquin County, chairman of
      the board, San Joaquin Valley Unified Air Pollution Control
      District, prepared statement...................................   752
    Camara, Elias H., president and CEO, M-C Power Corp., prepared
      state- ment....................................................   678
    Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado........
                                                               1, 326
        Prepared statement...........................................   328
        Questions submitted by.......................................
          173, 289...................................................
    Capoeman-Baller, Pearl, president, Quinault Indian Nation,
      prepared statement.............................................   960
    Charles, Frances G., chairwoman, Lower Elwha Klallam Tribe,
      prepared statement.............................................   878
    Chino, Wendell, president, Mescalero Apache Tribe, letter from...   128
    Circle of Nations Wahpeton Indian School Board, Wahpeton, ND,
      prepared statement.............................................   901
    Clark, Les, vice president, Independent Oil Producers'
      Association; and on behalf of the Kern County Valley Floor
      Habitat Conservation Plan Industry and Government Coalition,
      prepared statements............................................
      752, 830.......................................................
    Clean Coal Technology Coalition, prepared statement..............   709
    Clinton, Hon. Bill, President of the United States, letter from..   475
    Coachella Valley Mountains Conservancy, prepared statement.......   858
    Coal Utilization Research Council [CURC], prepared statement.....   686
    Cochran, Hon. Thad, U.S. Senator from Mississippi................   330
        Prepared statement...........................................   380
        Questions submitted by.......................................
          107, 157, 174, 300, 621....................................
    Colnes, Andrea L., director, the Northern Forest Alliance,
      prepared statement.............................................   792
    Colorado River Indian Tribes, prepared statement.................   908
    Comanor, Joan, Deputy Chief, State and Private Forestry, Forest
      Service, Department of Agriculture.............................   177
    Conrad, Gregory E., executive director, Interstate Mining Compact
      Commission, prepared statement.................................   774
    Cox, Patrice, president, Sacramento Open Space, letter from......   830
    Crawford, Tommy, chair, Southern Manufactured Housing Alliance,
      New York, NY, letter from......................................   682
    Cukro, George, executive director, Black Mesa Community and
      School of the Navajo Nation, prepared statement................   936
    Cunha, Manuel, Jr., president, Nisei Farmers League, prepared
      statements.....................................................
      752, 830.......................................................

    Darguzas, Joseph N., Sargent & Lundy, L.L.C., prepared statement.   691
    Davenport, Eric R., chairman, Intertribal Monitoring Association,
      prepared statement.............................................   954
    Deer, Hon. Ada E., Assistant Secretary for Indian Affairs; and
      Chair, National Indian Gaming Commission, Bureau of Indian
      Affairs, Department of the Interior............................
      111, 160.......................................................
        Biographical sketch..........................................   167
        Prepared statement...........................................
          115, 164...................................................
    Derbyshire, Dr. Frank, director, University of Kentucky, Center
      for Applied Energy Research, prepared statement................   680
    Dessecker, Daniel R., forest wildlife biologist, prepared
      statement......................................................   795
    Dombeck, Mike, Chief, Forest Service, Department of Agriculture..   186
        Letter from..................................................   226
        Prepared statement...........................................   188
    Domenici, Hon. Pete, U.S. Senator from New Mexico................    21
        Questions submitted by.......................................
          294, 632...................................................
    Doolittle, Warren T., president, International Society of
      Tropical Foresters, Inc., letter from..........................   790
    Dorgan, Hon. Byron, U.S. Senator from North Dakota...............    32
        Prepared statement...........................................    32
        Questions submitted by.......................................
          109, 158, 308, 667.........................................
    Dutz, Joseph, Chief Financial Officer, Bureau of Indian Affairs,
      Department of the Interior.....................................   160

    Ebel, John E., director, the Weston Observatory of Boston
      College, prepared statement....................................   836
    Electric Transportation Coalition, prepared statement............   700

    Fedman, Alan, Director of Enforcement, Bureau of Indian Affairs,
      Department of the Interior.....................................   160
    Fond du Lac Band of Lake Superior Chippewa, prepared statement...   885
    Franklin, Thomas M., wildlife policy director, the Wildlife
      Society, prepared statement....................................   763
    Fregien, Gary O., president, California Parks and Conservation
      Association, letter from.......................................   829

    Gainesville, FL, city of, regarding the Sweetwater Branch/Paynes
      Prairie stormwater project, prepared statement.................   755
    Gallery, Audrey, honorary chairman, U-505 Restoration Committee..   669
    General Electric Power Systems, prepared statement...............   744
    George, Father William L., S.J., assistant for Federal relations,
      Georgetown University, prepared statement......................   708
    Geringer, Hon. Jim, Governor, State of Wyoming, prepared
      statement......................................................   781
    Gipp, David M., president, United Tribes Technical College,
      prepared statement.............................................   861
    Gorton, Hon. Slade, U.S. Senator from Washington.................
                                                    23, 111, 177, 321
    Grey, Andrew, chairman, Sisseton-Wahpeton Sioux Tribe, Lake
      Traverse Reservation, prepared statement.......................   894
    Gunn, Susan H., director of budget and appropriations, the
      Wilderness Society, prepared statement.........................   825

    Hackney, Sheldon, chairman, National Endowment for the Humanities   371
        Prepared statement...........................................   375
    Herrera, Stanley, president, Alamo-Navajo School Board, Alamo,
      NM, prepared statement.........................................   935
    Hertfelder, Eric, executive director, on behalf of the National
      Conference of State Historic Preservation Officers, prepared
      statement......................................................   851
    Hocker, Jean, president, Land Trust Alliance, letter from........   803
    Holmer, Steve, campaign coordinator, Western Ancient Forest
      Campaign, prepared statement...................................   795
    Hutchison, Hon. Kay Bailey, U.S. Senator from Texas, questions
      submitted by...................................................   664

    Indigenous People's Council for Marine Mammals, prepared
      statement......................................................   857
    Integrated Petroleum Environmental Consortium, prepared statement   732
    Interstate Council on Water Policy, prepared statement...........   838

    James, Gordon, chairman, Skokomish Indian Tribe, prepared
      statement......................................................   867
    James, Hon. Sharpe, mayor, on behalf of the city of Newark, NJ,
      prepared statement.............................................   754
    James, Ted, planning director, Kern County Planning Department,
      prepared statement.............................................   830
    Janger, Stephen A., president, Close Up Foundation, prepared
      statement......................................................   874
    John, Hon. Ismael, senator, Nitijela of the Marshall Islands on
      behalf of the Enewetak/Ujelang Local Government Council,
      prepared statement.............................................   898
    Jollivette, Cyrus M., vice president for government relations, on
      behalf of the University of Miami, prepared statement..........   849
    Judd, Joe, commissioner on behalf of the Kane County, Utah
      Commission, prepared statement.................................   845

    Kellstrom, Todd, mayor, city of Klamath Falls, OR, letter from...   844
    Kennamer, James Earl, Ph.D., vice president for conservation
      programs, National Wild Turkey Federation, prepared statement..   799
    Kenny, Michael P., executive officer, California Air Resources
      Board, prepared statement......................................   752
    Kilham, Alice, cochair, Upper Klamath Basin Working Group,
      prepared statement.............................................   782
    Knight, Robert H., on behalf of the Family Research Council,
      prepared statement.............................................   672
    Kripowicz, Robert S., Principal Deputy Assistant Secretary,
      Office of Fossil Energy, Department of Energy..................     1
        Biographical sketch..........................................    12

    Lackey, J. Kevin, conservation programs director, Rocky Mountain
      Elk Foundation, letter from....................................   788
    Lawson, Richard L., president, National Mining Association [NMA],
      prepared statement.............................................   741
    Leahy, Hon. Patrick, U.S. Senator from Vermont...................   227
        Questions submitted by.......................................
          108, 310...................................................
    Lee, Dr. Bernard S., president, Institute of Gas Technology,
      prepared statement.............................................   697
    Linehan, Dr. Thomas E., president, Ringling School of Art and
      Design, on behalf of the Association of Independent Colleges of
      Art and Design, prepared statement.............................   674
    Loretto, Leonard, governor, the Pueblo of Jemez, prepared
      statement......................................................   889
    Lundy, Jeff, on behalf of the State of Mississippi Oil & Gas
      Board and Ground Water Protection Council, prepared statement..   750
    Lyons, Hon. Jim, Under Secretary, Natural Resource and
      Environment, Forest Service, Department of Agriculture.........   177
        Prepared statement...........................................   184

    Maddox, Deborah J., Director, Office of Tribal Services, Bureau
      of Indian Affairs, Department of the Interior..................   111
    Manuel, Hilda A., Deputy Commissioner of Indian Affairs, Bureau
      of Indian Affairs, Department of the Interior..................   111
    Mason, ``Bud'' Russell, board chairman, United Tribes Technical
      College, prepared statement....................................   861
    Maulson, Tom, tribal chairman, on behalf of the Lac du Fambeau
      Band of Lake Superior Chippewa Indians, prepared statement.....   883
    McDivitt, James H., Acting Director, Office of Management and
      Administration, Bureau of Indian Affairs, Department of the
      Interior.......................................................   111
    McDougle, Janice, Acting Deputy Chief, National Forest System,
      Forest Service, Department of Agriculture......................   177
    Meeker, B. Sharon, chairperson, Lamprey River Advisory Committee,
      letter from....................................................   849
    Mejia, Margie, chairperson, Lytton Ranceria/Lytton Band of Pomo
      Indians of California, prepared statement......................   870
    Melissaratos, Aris, vice president of science, technology and
      quality, Westinghouse Electric Co., prepared statement.........   730
    Mitchell, Jeff, C., tribal chairman, the Klamath Tribes,
      Chiloquin, OR, letter from.....................................   586
    Mondre, Judith L., executive director, city of Philadelphia
      Energy Office; and chair, Urban Consortium Energy Task Force,
      prepared statement.............................................   721
    Mooney, Ross, Dam Safety Officer, BIA, Bureau of Indian Affairs,
      Department of the Interior.....................................   111
    Morris, Joann Sebastian, Director, Office of Indian Education
      Programs, Bureau of Indian Affairs, Department of the Interior.   111
    Moses, Joe, chairman, tribal council, the Confederated Tribes of
      the Warm Springs Reservation of Oregon, prepared statement.....   896
    Munoz, Vince, Governor, the Tigua Indian Reservation, El Paso,
      TX, letter from................................................   587
    Murphy, Virgil J., chairman, Stockbridge-Munsee Community Band of
      Mohican Indians, prepared statement............................   876

    Narragansett Tribe, prepared statement...........................   951
    National Association for State Community Services Programs
      [NASCSP], prepared statement...................................   692
    National Association of Energy Service Companies, prepared
      statement......................................................   688
    National Indian Child Welfare Association, prepared statement....   864
    Natural Gas Industry Research, Development and Demonstration
      Initiative, prepared statement.................................   724
    Navajo Nation, prepared statement................................   955
    Nimmons, John T., managing director, Alliance to Commercialize
      Carbonate Technology, prepared statement.......................   736

    Pacelle, Wayne, vice president, government affairs, the Humane
      Society of the United States [HSUS], prepared statement........   821
    Padilla, Nicolas J., on behalf of the Susanville Indian
      Rancheria, prepared statement..................................   941
    Palmer, James I., Jr., director, Mississippi Department of
      Environmental Quality, Jackson, MS, letters from...............   624
    Pena, Federico F., Secretary of Energy, Office of the Secretary,
      Department of Energy...........................................     1
        Biographical sketch..........................................    11
        Prepared statement...........................................     4
    Penney, Samuel N., chairman, Nez Perce Tribal Executive
      Committee, prepared statement..................................   853
    Peter, Hon. Neptali, mayor, Enewetak Atoll, on behalf of the
      Enewetak/Ujelang Local Government Council, prepared statement..   917
    Peterson, R. Max, executive vice president, International
      Association of Fish & Wildlife Agencies, prepared statement....   809
    Petroleum Technology Transfer Council, prepared statement........   683
    Pinkham, Jaime, president, Intertribal Timber Council, prepared
      statement......................................................   871
    Pinon Community School Board, Inc., prepared statement...........   947
    Polles, Sam, executive director, Mississippi Department of
      Wildlife, Jackson, MS, letters from............................
      623, 624.......................................................
    Poynter, Ken, executive director, Native American Fish & Wildlife
      Society, prepared statement....................................   818

    Rawlings, Hunter R., III, president, Cornell University, on
      behalf of the Association of American Universities, American
      Council on Education, National Association of State
      Universities and Land-Grant Colleges, prepared statement.......   670
    Reheis, Catherine H., managing coordinator, Western States
      Petroleum Association on behalf of the California Industry and
      Government Coalition, on PM-10/PM-2.5, prepared statement......   752
    Richardson, Linda, Director of Audit and Evaluation, Bureau of
      Indian Affairs, Department of the Interior.....................   111
    Robert, Hollis E., president, Inter-Tribal Council, the Five
      Civilized Tribes, letter from..................................   588
    Rock Point Community School, prepared statement..................   944
    Romm, Joseph J., Principal Deputy Assistant Secretary, Office of
      Energy Efficiency and Renewable Energy, Department of Energy...     1
        Biographical sketch..........................................    13
    Rooks, Paul A., chief of police, Oglala Sioux Tribal Public
      Safety Commission, prepared statement..........................   950
    Runnels, Bruce, chief conservation officer, the Nature
      Conservancy, prepared statement................................   778
    Ryan, John, Water Trucks, letter from............................   226

    Satterfield, Steven, Director, Program Development and Budget
      Staff, Forest Service, Department of Agriculture...............   177
    Saulque, Joseph C., chairman, Owens Valley Indian Water
      Commission, prepared statement.................................   916
    Sault Ste. Marie Tribe of Chippewa Indians, prepared statement...   879
    Savitz, Dr. Maxine, general manager, AlliedSignal Ceramic
      Components, prepared statement.................................   747
    Sawyer, Andy, chapter chair, Sierra Club, Mother Lode Chapter,
      letter from....................................................   828
    Schweigert, Jerry, facilities transition program staff, Bureau of
      Indian Affairs, Department of the Interior.....................   111
    Scudero, James, E., acting mayor, Council Annette Islands
      Reserve, Metlakatla Indian Community, Metlakatla, AK, letter
      from...........................................................   585
    Sletteland, Trygve, Pacific Rivers Council, prepared statement...   785
    Sloan, Mary Margaret, conservation director, American Hiking
      Society, prepared statement....................................   772
    Slocum, Dr. Edward, superintendent, New Town Public School
      District No. 1, prepared statement.............................   913
    Smedley, Elizabeth E., Acting Chief Financial Officer, Department
      of Energy......................................................     1
        Biographical sketch..........................................    13
    Speight, James, D.G., chief executive officer, Western Research
      Institute, letter from.........................................   718
    Startzell, David N., executive director, Appalachian Trail
      Conference, prepared statement.................................   768
    Steinbach, Thomas, director of conservation, Appalachian Mountain
      Club, prepared statement.......................................   761
    Stevens, Christine, secretary, Society for Animal Protective
      Legislation, prepared statement................................   824
    Stevens, Hon. Ted, U.S. Senator from Alaska, questions submitted
      by.............................................................
      148, 618.......................................................
    Stewart, Ron, Acting Deputy Chief, Programs and Legislation,
      Forest Service, Department of Agriculture......................   177
    Stone, Wanda, chairperson, CEO, the Kaw Nation, Kaw City, OK,
      letter from....................................................   588
    Stout, Elaine M., president, the Back Country Land Trust, letter
      from...........................................................   760
    Strong, Ted, executive director, Columbia River Inter-Tribal Fish
      Commission, prepared statement.................................   926
    Styles, Gary A., manager, planning and analysis power systems
      development facility, Southern Company Services, Inc., prepared
      statement......................................................   712
    Sutton, Robert W., executive director, American Indian Graduate
      Center, prepared statement.....................................   965

    Thompson, Clyde, Acting Deputy Chief, Administration, Forest
      Service, Department of Agriculture.............................   177
    Tice, R. Dean, executive director, the National Recreation & Park
      Association, letter from.......................................   757
    Tijm, Peter J.A., manager, Syngas Conversion Systems, Air
      Products & Chemicals, Inc., prepared statement.................   739
    Tsosie, Wallace, vice president, Greasewood Springs Community
      School, Inc., Navajo Nation, Ganado, AZ, prepared statement....   948

    Unger, David G., Associate Chief, Forest Service, Department of
      Agriculture....................................................   177

    Valencia, Benito, chairman, Pascua Yaqui Indian Tribe of Arizona,
      prepared statement.............................................   962
    Virden, Terry, Director, Office of Trust Responsibilities, Bureau
      of Indian Affairs, Department of the Interior..................   111

    Walsh, Donald, L., Bulldozer Service, letter from................   226
    Webb, David O., senior vice president, Policy and Regulatory
      Affairs, on behalf of the Gas Research Institute [GRI],
      prepared statement.............................................   675
    Weber, Barbara, Acting Deputy Chief, Research, Department of
      Agriculture....................................................   177
    Werbelow, Karen, executive director, Foundation for North
      American Wild Sheep, prepared statement........................   756
    Whitefeather, Bobby, chairman, Red Lake Band of Chippewa Indians,
      letter from....................................................   854
    Wilde, Harry, cochair, Lower Yukon and Gilbert Huntington,
      cochair, Upper Yukon of the Yukon River Drainage Fisheries
      Association, prepared statement................................   866
    Wilder, Ilene, Sargent & Lundy, L.L.C., prepared statement.......   691
    Williamson, Lonnie L., vice president, Wildlife Management
      Institute, prepared statement..................................   800
    Willis, Lorene, president, National Indian Education Association,
      prepared statement.............................................   903
    Wilmer, John, Sr., chairman, the Bad River Band of Lake Superior
      Chippewa Indians, prepared statement...........................   887
    Wright, Mervin, Jr., chairman, Pyramid Lake Paiute Tribe,
      prepared statement.............................................   913
    Wynne, Bruce, chairman, Spokane Tribe of Indians, prepared
      statement......................................................   910

                                 SUBJECT INDEX

                                  ----------

                           DEPARTMENT OF AGRICULTURE
                                 Forest Service

                                                                       Page

    Additional committee questions...................................   240
    Associates, introduction of......................................   187
    Awards...........................................................   201
    Beaver management................................................   204
    Bison contingency plan...........................................   217
    Brucellosis......................................................   217
    Budget request...................................................   177
    Columbia basin ecosystem.........................................   231
    Fire:
        And forest health............................................   195
        Equipment....................................................   225
    Flood funding....................................................   236
    Forest management................................................
      194, 224.......................................................
    Forest Service organization......................................   196
    FTE hits.........................................................   215
    Grasslands.......................................................   216
    Grazers..........................................................   217
    Infested timber..................................................   210
    Insect and disease...............................................   208
    Law enforcement..................................................   233
    National monument................................................   238
    Native Americans.................................................   179
    Organization changes.............................................
      191, 192.......................................................
    Performance awards...............................................   200
    Purchaser credits................................................   202
    Recreation.......................................................   193
        Demand.......................................................   207
    Roads............................................................   213
    Salvage sale programs............................................   229
    Sawtooth range management........................................   220
    State and private forestry programs..............................   228
    Stewardship......................................................   214
    Tahoe basin/forest health........................................   205
    Takoo River......................................................   209
    Thinning program.................................................   195
    Timber sale:
        Level........................................................   203
        Targets......................................................   233
    Tongass timber...................................................
      198, 199.......................................................
    Trails...........................................................   222
    Washington State, issues.........................................   237
    Water:
        Quality......................................................   206
        Rights.......................................................   222
    Western Director Office..........................................   235

                              DEPARTMENT OF ENERGY
                            Office of the Secretary

    Additional committee questions...................................    41
    Allocation to subcommittee.......................................    26
    Arctic National Wildlife Refuge..................................    40
    Arthur D. Little study...........................................    37
    Clean coal technology rescission.................................    35
    Codes and standards..............................................    31
    Electricity deregulation.........................................    27
    Elk Hills, sale of...............................................    23
    Energy efficiency and renewable energy...........................    18
    EPA standard on particulates.....................................    36
    Federal Energy Technology Center consolidation...................    19
    Federal energy:
        Management program...........................................    36
        Technology program direction.................................    19
    Fossil energy....................................................    15
        Research and development accomplishments.....................    28
    Fuel cell technology, new........................................    30
    Home energy rating system pilot program..........................    39
    Morgantown, environmental management program at..................    20
    National Renewable Energy Lab....................................    15
    Naval petroleum and oil shale reserves...........................    14
    Oil, decrease in domestic production of..........................    17
    President's budget, increases in fiscal year 1998................
      22, 25.........................................................
    Renewable energy--use and future projections.....................    17
    Repayment provisions.............................................    31
    Rocky Flats......................................................    14
    Strategic petroleum reserve......................................    24
    Vehicles, partnership for a new generation of....................    38

                           DEPARTMENT OF THE INTERIOR
                            Bureau of Indian Affairs
                            Indian Gaming Commission

    Additional committee questions...................................
      146, 173.......................................................
    Associates, introductions of.....................................   113
    Budget request...................................................
      111, 160.......................................................
    Bureau of Indian Affairs, long-term goal for.....................   140
    Dams, safety of..................................................   134
    Education........................................................
      130, 131.......................................................
        Facilities...................................................   125
        Program performance..........................................   137
    Enforcement activities...........................................   164
    Funding possibilities............................................   172
    Funding proposal.................................................   167
    Gaming in:
        California...................................................   168
        Washington...................................................   170
    Indian country in Alaska.........................................   145
    Indian reservations, construction of.............................   137
    Laguna industries................................................   131
    Law enforcement facilities.......................................   134
    Mescalero Apache proposal........................................   128
    NIGC mission.....................................................   161
    Political contribution...........................................   144
    Programs subcommittee is responsible for.........................   141
    Regulations, compliance with.....................................   168
    Seminole decision................................................   169
    Status of activities.............................................   163
    Tribal government, source of money for...........................   119
    Tribal:
        Fund distribution............................................   120
        Shares.......................................................   123

                            Office of the Secretary

    Additional committee questions...................................   488
    Alaska roads.....................................................   479
    Bison:
        Herd:
            Integrity................................................   475
            Management...............................................   475
        Management plan..............................................   475
        On Federal land..............................................   476
        Yellowstone..................................................   474
    Budget:
        Priorities...................................................   482
        Request......................................................   409
        Resolution...................................................   441
            User fees................................................   443
    Bureau of Land Management........................................   416
    C&O Canal........................................................   486
    Canaan Valley:
        Funding......................................................   432
        National Wildlife Refuge.....................................   430
    Central Utah project.............................................   486
    Connecticut River partnership....................................   446
    Eastern Shawnee Tribe trust petition.............................   433
    Endangered Species Act...........................................   415
    Everglades.......................................................   482
    Federal rights...................................................   424
    Fee demonstration project........................................   414
    Fort Smith National Historic Site................................   442
    Funding:
        Committee....................................................   410
        Eco-regional plans...........................................   481
        Problem......................................................   438
    George Washington, parkway.......................................   432
    Indian:
        Gaming.......................................................   439
        Programs.....................................................   416
        Relationship with Federal Government.........................   443
        Schools......................................................   444
    Interior:
        Columbia River basin study...................................   480
        History......................................................   422
        Program direction............................................   413
    Invasive species.................................................   448
    Land:
        Acquisition funding..........................................   483
        And water conservation fund..................................   447
        Land.........................................................   435
        Management agencies..........................................   414
    Lower Mississippi Delta Region Heritage Center...................   442
    Mining royalties.................................................   441
    Missisquoi National Wildlife Refuge..............................   447
    National Conservation Training Center............................   429
    National Park:
        Harper's Ferry...............................................   432
        Hot Springs..................................................   442
        Service maintenance backlog..................................   449
        Yellowstone--roads...........................................   474
    National parks, roads in.........................................   425
    National wildlife refuges........................................   416
    Nevada Bureau of Land Management.................................   435
    New World Mine...................................................   478
    Park:
        Housing......................................................   473
        Infrastructure priority list.................................   474
        Service funding..............................................   484
    Parks, transportation in.........................................   415
    Petroglyphs National Monument....................................   445
    Presidio.........................................................   485
    Revised Statute 2477.............................................   422
        History......................................................   422
    Rights of Congress...............................................   428
    Rights-of-way....................................................   423
        Legislation..................................................   426
        Policy.......................................................   427
    Rim Rock Run.....................................................   439
    Secretarial accolades............................................   446
    Southwest:
        Fisheries Center.............................................   446
        Willow flycatcher............................................   445
    Supplemental appropriations......................................   447
        Veto proposal................................................   426
    Three-State area.................................................   473
    Training.........................................................   430
    Tribal self-determination........................................   439
    U.S. Geological Survey...........................................   445
    Wild horses......................................................   438
        Program funding versus park funding..........................   436
    Yosemite flood damage............................................   415

                        NATIONAL ENDOWMENT FOR THE ARTS

    Additional committee questions...................................   348
    American Canvas..................................................   344
    Application and grant statistics.................................   340
    Arts:
        Federal role in the..........................................   331
        Need for government investment to the........................   333
        Private sector funding of the................................   332
        Society's need for the.......................................   329
        States support of the........................................   346
    Budget request...................................................   321
    Chairman's action grants.........................................   346
    Cultural treasures, preservation of..............................   326
    Distribution of funds appropriated through subcommittee..........   323
    Economic consequences of agency elimination......................   342
    Endowments:
        Possible consolidation of....................................   339
        Support for continuation of..................................   323
    Importance of NEA to California..................................   324
    Income recovery policy...........................................   347
    NEA:
        Makes the arts accessible....................................   332
        Money, geographic distribution of............................   343
        Partnership with States......................................   340
        Preservation of native American culture......................   327
        Programs for at-risk youth...................................   343
        Reorganization of............................................   340
        Support of American artists abroad...........................   347
    NEH, President's request for.....................................   324
    Penal systems, importance of the arts in.........................   341
    Romanov exhibit..................................................   338
    Status of NEA:
        Appropriation in the House...................................   339
        Reauthorization..............................................   339
    Value of the arts to society.....................................   333

                     NATIONAL ENDOWMENT FOR THE HUMANITIES

    Additional committee questions...................................   388
    Budget:
        Request......................................................   371
        Transition to a lower........................................   374
    NEH and NEA, merging of..........................................   385
    National Trust for the Humanities................................   387
    NEH:
        And American heritage rivers initiative......................   386
        Chairman, advice for next....................................   384
        Maintaining a nonpartisan....................................   384
    Public service and the temper of the times.......................   380
    State humanities councils compared to State arts agencies........   385
    Summer seminars for schoolteachers...............................   382
    The conversation and American values.............................   374
    The National Conversation and Civil Society......................   373